FCA board report highlights 20 areas for improvement
The Financial Conduct Authority (FCA) has been advised to improve on 20 areas to address the effectiveness of its board but hasn’t publicly revealed what they are.
The City regulator commissioned Advanced Boardroom Excellence to conduct a review of the effectiveness of its board earlier this year.
The findings, published today (22 November), considered areas such as inclusion, debate, leadership and integrity.
It concluded that none of the criteria were deficient and highlighted 12 positive areas such as its openness and skills and experience.
But the report said a “further 20 emerging areas of effectiveness were identified as ongoing ‘work in progress.’”
These weren’t identified in the report.
The document did include recommendations such as increasing the number of non-executive directors to help with the board’s workload.
It also suggested that the “information flow” to the board needs to be addressed.
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The analysis comes after the FCA has faced criticism for the handling of crises such as the collapse of London Capital and Finance (LCF).
A report by Dame Elizabeth Gloster last year, commissioned by the FCA, questioned the oversight of the regulator’s board amid the LCF mini-bond scandal.
Simon Morris, a financial services partner with law firm CMS, questioned why the areas for improvement weren’t included in the report.
“At first glance it is an act of candour for a regulator to publish a review of its board effectiveness,” he said.
“But confidence is somewhat undermined when you note it lists the 12 positive findings, only to omit twenty further areas for improvement. While short on detail, the review paints a broadly positive picture.
“The new FCA board seems to be a far cry from the Gloster Report’s finding of a board that knew of, but failed to act on, a deficient supervision system that allowed LCF to get away with its fraud for so long.”
The FCA has been asked for comment.
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