This review will raise very fundamental questions about the operation and effectiveness of the boards of our major banks. Some of the areas which I hope Sir David will consider exploring include:
Whether professional investors should have a legal responsibility to seek to enhance the quality of investment and governance to promote value creation – based on the United States’ ERISA model
Placing an additional legal obligation on bank directors and senior executives to have regard to the need to promote and maintain systemic financial stability through actions
Whether the Director of Risk should have a separate and independent reporting line to the Board
Whether non-executive directors should be required to have professional qualifications relating to banking.
Whether there is a case for NEDs having dedicated support to help them assert their responsibilities when appropriate and commission reports independent of management
The case for appointing an independent adviser to its audit committee whose role could include engaging with external auditors, developing agendas, providing technical briefing and recommending when a second opinion should be obtained
How much time non-executive directors should be expected to spend performing their role and what rewards are necessary to ensure good performance. Is there an inconsistency here between the high expectations in terms of time and expertise we have of NEDs, yet at the same time drawing them from the executive community
And whether the statutory reporting of remuneration should be extended to cover non-board positions, providing greater insight into group wide remuneration – the culture and behaviours the group seeks to promote. The recognition of internal comparators would counter the insidious effect of external comparators.
Friday, 13 March 2009
Myners speech to NAPF
Is here and worth a read. Short excerpt below that provides an idea of what the Walker review might cover: