Non-executive Directors Receive New Guidance
The Financial Services Authority (FSA) has issued a consultation on guidance for non-executive directors (NEDs), with the aim to assist NEDs understand their role in ensuring customers are treated fairly within their firms.
The FSA expects NEDs to play a pivotal part within the firm’s governance by ensuring that the firm is meeting its responsibilities to retail customers.
The guidance proposes that amongst the issues that NEDs should consider are taking a strategic view to treatment of their customers; being confident that the firm is identifying, monitoring and mitigating risk to its customers; having the right mix of skills on the Board and the right information to be able to constructively challenge the executive; and supporting a culture within the firm that takes into account fair treatment of customers.
Clive Adamson, FSA director of supervision, conduct business unit said: “Non-executive directors have a duty to challenge the management of their firms where they believe the firm could do more to ensure that customers get fair treatment.
“Our consultation sets out the clear expectations that we have for NEDs and we expect them to play their part by considering this carefully.”
Together with the guidance for NEDs, the FSA has also set out for firms an outline of how it will assess how firms are managing these risks.
This guidance follows a conference held yesterday for NEDs to discuss these issues.