The Financial Services Authority (FSA) has announced the hiring of five new senior advisers to strengthen its vetting process of banking and insurance boards and improve corporate governance supervision of City firms. The regulator’s appointments coincide with the final recommendations of the Walker Review, which asks for tougher corporate governance standards for UK financials. The new advisers – Sir Dominic Cadbury, Baroness Hogg, Lord Marshall, Sir Brian Pitman and Sir David Scholey – will contribute to the new ‘panel interview process’, by which the FSA will supervise the competence of senior board appointments at the largest UK financial institutions. “These new advisers have extensive experience acting on the boards of major companies and in senior policy positions, and will bring valuable insight to the work the FSA is pursuing on governance,” said FSA chief executive Hector Sants. The supervisor warned firms in October they would be facing heightened scrutiny under the regulator’s ‘intensive regulatory approach’ – marking a departure from previous supervision, often described as a ‘light touch’ and earlier this year branded a failure by the Treasury Select Committee in response to the collapse and nationalisation of Northern Rock. The FSA’s October ‘Dear CEO letter’ also outlined the regulator’s new approach to vetting appointments to significant influence functions (SIFs). This included details about the process to be conducted by a senior panel drawn from the FSA executive and advisory group, including the new members announced today. The interviews will be used by the FSA “to judge the competence and capability of those applying for influential positions within regulated firms”. “In adding this board expertise to our SIF interview panel, we can continue to ensure those taking up top jobs are the right calibre to lead and challenge the management of the UK’s top firms,” said Sants. The regulator says SIF vetting will be mostly restricted to the banking and insurance sectors, and is envisaged to cover the chairman, chief executive, senior independent director roles, as well as the appointed chairs of the audit, remuneration and risk committees. The FSA appointments will take effect from January 2010. The five new advisers will work with Graeme Ashley-Fenn, the FSA’s director of permissions, decisions and reporting, who heads the SIF approval regime....
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