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New financial services code unveiled

Monday, December 23 12:53:57

The Central Bank of Ireland today published a revised Corporate Governance Code for Credit Institutions and Insurance Undertakings that will force financial services firms to put in place much more stringent internal structures.

The Code sets out minimum statutory requirements on how credit institutions and insurance undertakings should organise the governance of their institutions.

The key objective of the Code is to facilitate good corporate governance in those institutions which fall within its remit. The revised Code comes into effect on 1 January 2015.

Institutions will be required to appoint a Chief Risk Officer (CRO) and a new section has been introduced which outlines the role and responsibilities of the CRO. The risk committee will be made up of a majority of non-executive or independent non-executive directors, one of whom must be the Chairman of the committee.

The risk and audit committees will be required to have a minimum of three members.

Institutions will be required to ensure that there is at least one shared member between the risk and audit committees. In addition, High Impact institutions will be required to have at least one shared member between the risk and remuneration committees.

They will be required to introduce a diversity policy for board membership.

The minimum number of board meetings required for High Impact institutions has been reduced from eleven to six per annum.

The Chairman can now hold the role of Chairman in other credit institutions and / or (re)insurance undertakings within the group, subject to prior approval by the Central Bank.

Finally, the Chief Executive Officer (CEO) of a Medium-Low or Low Impact institution can now hold up to two additional CEO positions provided they are in Medium-Low or Low Impact institutions, subject to prior approval by the Central Bank.