The Financial Conduct Authority has been told there is a need for its board to be increased by at least one director to deal with the challenges it faces.
An external board evaluation of the FCA's board, conducted by Advanced Boardroom Excellence Limited, said there was a “clear rationale” for more non-executive directors on the board, given the “huge agenda and challenges” faced by the organisation.
It also noted additional committees may be required in order to support the operation of the board and do some more of the ‘heavy lifting’.
The review, which commenced in May 2021 and concluded on September 8, saw the regulator reviewed against the principles set out in the board effectiveness framework shaped by the Financial Reporting Council.
The result of the review was positive and showed a developing board which is “responding to the challenges of a very wide scope of change and activity”.
It said: “This is a strong board of individuals who have a clear sense of drive and commitment to deliver on the goals of the FCA.”
But it also called for more manpower on the board, saying: “In an environment where the responsibilities of the regulator are increasing and its remit widening, the board particularly notes the evaluation’s recommendation to HM Treasury that the size of the board be increased by at least one director.”
The FCA board welcomed the review and has established a programme of workshops to run for the remainder of the year to discuss how best to implement its recommendations in the context of the government’s Future Regulatory Framework review and a change in chairman in Spring 2022.
The review praised the FCA chairman, stating he has led, with the Treasury, “a successful shaping of the board” and supported the new chief executive to drive organisational change and oversee a significant change across the executive leadership team.
“Consequently, this is a strong, experienced and independent board, with diverse experience and skills,” it said.
“However, while there has been a great deal of remote interactions, between many NEDS as well as executives outside board meetings, at teach ins and workshops; the board acknowledges that they will benefit greatly and their cohesion will accelerate further once they are able to meet in person.”
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