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FEE welcomes EBA's consultation as it believes that assessing the suitability of candidates for the management body and key function holders should be treated with care and is an important topic that has been recognised as one of the key issues within corporate governance systems in the recent financial crisis.
FEE's responses, which in some instances address the circumstances of financial institutions in general, can be summarised as follows:
(a) Individual competences and general understanding of the complexity of the business model and its societal impact are essential, especially in credit institutions. Additional guidance on this matter, taking note of the lessons that can be learned from the financial crisis, is therefore appropriate and timely. Competences assigned should be well-balanced between the members of the management body given the subject matter that it deals with. This will support the aim of having an adequate level of collective competences in the management body as a whole.
(b) Collective competence of the management body vs individual competences of its members should be elaborated upon in the guidelines.
(c) The guidelines should be more specific regarding the selection process of management body members as this is the main governing body of any credit institution that is responsible for the relationship with the competent authorities. In particular, FEE would advise EBA to expand the guidelines in respect of Article 15 Governance Criteria.
(d) EBA is encouraged to cooperate closely with EIOPA to develop coherent assessment principles which can be applied in a practical and proportionate manner throughout the financial sector.