Boards and committees of financial services firms are under increasing pressure to play a more active role in overseeing governance. To reduce misconduct and protect consumers, UK regulators introduced the Senior Managers and Certification Regime (SM&CR). It is designed to help improve governance among financial services organisations by enhancing individual accountability and awareness of improper conduct.

Organisations that operate under SM&CR are expected to prove that staff clearly understand where designated responsibilities and accountabilities lie. If organisations or individuals are found not to be compliant, the FCA has the power to hand down penalties through fines and by removing individuals. In recent years, the FCA has fined individuals who don’t display the right level of compliance, rather than to organisations.

It is imperative that financial services firms have appropriate and effective governance in place, including committee structures and a clear allocation of accountability and responsibility across three lines of defence (3LoD). Governance arrangements should be fit for purpose and reflect the size and complexity of the firm.

How can we help

Our specialist financial services risk and regulation team can work with you to develop and implement or enhance your governance model. With our help, you will have the confidence to effectively grow your business and successfully manage your firm’s regulatory and strategic risks.

We have helped many firms implement clear organisational and committee structures that ensure senior management responsibilities are clear and appropriate. We can help you too by:

• Designing and implementing a governance operating model, including committee structure across the three lines of defence.
• Drafting committee terms of reference, agendas, management information and action plans.
• Building organisation structures that clearly outline key accountabilities and responsibilities.
• Conducting board effectiveness reviews.
• Reviewing your firm’s implementation of SM&CR and assessing whether you are meeting the requirements both from an organisational and individual perspective.
• Developing a strategic SM&CR approach aligned with your objectives.
• Designing and delivering tailored SM&CR training packages.
• Delivering assurance and gap analysis reviews across the three lines of defence.
• Supporting teams across the three lines to implement and develop effective frameworks, such as designing bespoke quality assurance frameworks.
• Building compliance monitoring plans and performing independent compliance monitoring reviews.

If you would like to find out more about how we can help you with governance and SM&CR, please contact Paul Jennings or Catherine Brittain.