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12 Governance Arrangements That Regulators Seek

The Board is responsible for the governance of risk and to ensure the company maintains a sound system of risk management and internal controls, to safeguard the interests of the company and its shareholders.

In our experience regulators will typically be looking to see:

  1. The overall functioning of the Board and how corporate governance works in practice within the firm, e.g. timeliness of meeting, attendance records, robust meeting disciplines being applied.

  2. The suitability of Board members and Senior Management committees, with clearly apportioned responsibilities through job descriptions, role profiles and terms of reference.

  3. Effective leadership by the Chair of the Board, with segregated roles for the Chief Executive Officer and Chair.

  4. How the Board sets the strategy, culture and values, and risk appetite, as well as how these are routinely evaluated.

  5. How well members of the Board understand the business and its risks.

  6. The control and oversight to ensure that remuneration is in line with the desired risk appetite and risk profile of the firm, and consistent with good risk management.

  7. The nature and extent of challenge by Non-Executive Directors, including their independence, experience, and expertise.

  8. How the Board obtains assurance about the effectiveness of the control functions.

  9. Ensuring that the operations are conducted prudently and within the framework of laws, regulations, and guidelines, as well as established policies and procedures.

  10. How the firm meets the requirements of relevant law, regulations and guidance, and the effectiveness of Know-Your-Customer (KYC) standards as well as ongoing monitoring.

  11. Quality and effectiveness of management information on which it relies.

  12. The corrective action when deficiencies are identified in the firm’s systems and control.

A well governed company will minimise their exposure to governance risks and should be open to objectively assessing their governance arrangements against industry wide benchmarks and applicable guidelines, especially now with the increasing prominence of ESG (Environment, Social, and Governance).

Danos Consulting is a specialist consultancy firm for leading organisations across Financial Services, Commerce and Industry, and the Public Sector. With our established Consultancy Services, we are experienced in undertaking ESG reviews, and assessing governance against good industry practises and regulatory expectations. We also have access to an unparalleled talent network and can provide experienced first-class practitioners to support staff augmentation and interim resourcing requirements.

If you would like to discuss a project or require some extra resources to support your risk or compliance function, please contact Gurjit Purewal who will be very happy to advise on the right solutions to ensure you are meeting your regulatory responsibilities.

Gurjit Purewal | Danos Consulting
E: | T: +44 (0) 20 7610 6442