What should senior managers know about the FSA's rules and approach to risk?
The FSA's reliance on the quality of a firm's senior management is the most important aspect of its approach to risk. Simply put, the higher the quality of a firm's management team, the more reliance the FSA will place on it resulting in a lighter regulatory touch. There is a real regulatory dividend attached to a positive approach by senior management to ensure that the firm has the right systems, controls and culture.
Given the market turbulence of the past year, the collapse of a number of household names in the world of financial services and the knowledge that a number of key controls within banks were seen to be insufficient, it is even more crucial for senior managers to be aware of their regulatory responsibilities. This applies to both executives and non-executives. The FSA has recently signalled its intention to make non-executive directors potentially more accountable if a firm fails to live up to expectations and the non-executives failed to act within their authority to prevent control weaknesses from occurring.
Hector Sants, Chief Executive of the FSA, said:
Over the coming year, you can expect our supervisors to challenge your senior management and Boards more intensively including:
- How they are ensuring continued compliance with our principles, especially as market conditions change
- The judgements they are making
- Whether they review the consequences of their decisions
- When developing and selecting among business options, whether they give robust consideration to the risks and the impact those risks could have if they were to crystallise
- Whether they consider the potential for new risks going forward.
Supervisors will also put more emphasis on assessing the competence of firms' senior management. You can expect to be challenged and held accountable for outcomes.
This half-day workshop is a refresher course, designed to update those who have already attended our Senior Management Responsibility Workshop and to inform those who have not. It will include an update on the FSA's latest thinking towards senior management, non-executives directors and the regulatory approach.
Senior managers will leave this workshop with:
- An understanding of the role of senior management and what the FSA expects of them
- An appreciation of the shift in responsibility of a senior manager and the implications involved
- A toolkit of things to do and issues to address in order to persuade the FSA that you are your firm appropriately.
Who should attend?
This workshop is particularly relevant to: senior managers in FSA governing or required functions, boards of regulated banks and other financial institutions, internal auditors and non-executive directors. |
