It can be argued that governance, culture and controls are three pillars upon which successful businesses are built. In recent years, regulators have placed increasing scrutiny on the governance-arrangements within the firms they regulate. The implementation of the Senior Managers & Certification Regime seeks to place more explicit individual accountability on the most senior individuals within financial services firms.
Of course there are many articulations of what good governance looks like, ranging from the UK Corporate Governance Code, CRD IV, MiFID II, Solvency II and innumerable white papers and other reports on the topic. The reality is that what is appropriate in the context of one organisation may not be a good fit somewhere else – in other words, there is no ‘one size fits all’…
It is clear however, that one of the key elements that regulators consider when investigating a firm or an issue, is the effectiveness of the governance–arrangements that were in place. And where deficiencies are found, it is increasingly likely that the regulators will also look to hold to account the individual(s) who were ultimately responsible for the oversight of that area of the business.
And so, whilst few would argue against the merits of having appropriate governance arrangements in place, assessing whether governance arrangements are adequate and would stand up to regulatory scrutiny can be challenging.
Bovill has a wide range of expertise in this area. Our consultants have extensive experience of both assessing the effectiveness of governance arrangements and also helping firms put a robust, yet proportionate, governance framework in place.
How we can help
We can help you with a wide range of governance-related work, such as:
|Skilled person reviews: we have been appointed on to the PRA and FCA’s Skilled Person Panel and can carry out expert reviews into firms’ business activities, including in relation to governance.|
|Governance framework: we can also undertake a wider governance review to consider where there might be weaknesses or room for improvement across your governance and control framework, for instance in relation to your board and committee structure, conflicts of interest, outsourcing or product governance.|
|Senior Managers & Certification Regime|
|Senior Managers & Certification Regime (SMCR): the SMCR is coming to all firms in 2018. We can help firms evaluate their existing governance framework in light of the SMCR and advise on how to prepare for and implement the new requirements.|
|Post-implementation health-check: We are starting to see the regulators challenge dual-regulated firms on how they have implemented the SMCR and question firms’ allocation of responsibilities. We can review governance arrangements against the SMCR rules and advise of any areas that may require improvement.|
|Handovers: increased individual accountability means that an incoming Senior Manager will need to be comfortable with the governance and control framework they have inherited from their predecessor. We can undertake a health-check of the relevant governance and control framework to provide the incoming senior manager with comfort that the framework is fit for purpose and also provide them with training on their regulatory responsibilities.|
|Implementation of governance framework|
|Remuneration structure: We can help firms review their remuneration structure to meet the relevant regulatory requirements in SYSC.|
|Conflicts of interest: We can help firms identify and consider what conflicts of interest might arise across their business. We can also help firms put in place a robust governance framework to ensure that conflicts of interest are properly identified and managed on an ongoing basis.|
|Product governance: It is a key requirement to have robust product governance in place to ensure that products are suitable for their intended client. We can help firms put in place a policy that meets the relevant requirements.|
|Training and interview preparation|
|Training: we can provide a wide range of governance-related training, ranging from Senior Manager Function obligations, Conduct Rule application, wider governance best practice, conflicts of interest, regulatory awareness, etc.|
|Regulatory / SIF interview preparation: The regulators routinely interview senior management within the firms they regulate. We can help prepare candidates for these regulatory interactions, including providing regulatory training and undertaking ‘mock interviews’.|