The Financial Skills Partnership, an employer-led body, is consulting on a range of new voluntary standards which it hopes will raise the quality of corporate governance in financial services and the quality of boardroom leadership.
It is part of a wider FSP initiative called Leadership 21st Century, which is being developed with employers by the Financial Skills Partnership which calls itself "the skills champion for the sector." The main aim will be to help the financial services sector restore its global reputation and rebuild consumer confidence. It focuses specifically on the effectiveness of boards and governance of firms, with an emphasis on skills, as this is key to improving outcomes for financial services consumers, says the FSP.
Liz Field, the FSP's chief executive, said, "This is a wide-ranging initiative that intends to provide direction and guidance, tools and solutions which will help firms to improve the quality and effectiveness of corporate leadership and board performance in our sector. This is essential if consumers are to regain their confidence in the sector and the products and services it provides."
At the core of the initiative is a set of draft voluntary standards for good board practice which have been developed with support from the major trade bodies, the Association of British Insurers, the British Bankers' Association, the regulators, the Financial Services Authority (FSA) and Financial Reporting Council (FRC), major employers, professional services firms, and public service bodies.
Ms Field said: "The first step has been to produce the draft standards, and the consultation is the industry's opportunity to input to the standards and help shape the final outcome, so that it is representative of the views of the sector as a whole. There are already a range of very specific requirements for boards to comply with, including the FRC's Corporate Governance Code and the FSA Handbook rules. These draft standards do not impose additional requirements for boards. They are designed to help firms see clearly what a good standard of application would look like in each area of responsibility.
She added: "The final standards can be used as a framework within the annual review and evaluation of board effectiveness undertaken by FTSE 350 firms. Once these standards have been finalised, the FSP will also develop a simple but robust measurement and reporting system. A number of options are under consideration but we need further discussion with firms on how this might be best achieved, and to this end we will be running a series of focus groups hosted by supporters of this project during the consultation period."
The programme could not have come at a more appropriate time, says the FSP, as the industry's statutory and regulatory landscapes are both about to be significantly changed. The Financial Services Authority ceases to exist on 1 April and will be replaced by the new Prudential Regulation Authority and the Financial Conduct Authority (FCA). The new FCA will have greater powers, and its core focus will be on good conduct and on putting customers at the heart of all business. Additionally, the Banking Reform Bill is due to be voted in later this year.
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The FSP is calling for industry-wide consultation on its draft standards. The consultation period is open for 10 weeks until 9 April 2013. Details of how to submit views can be found on the FSP's website:FSP consultation
The Financial Skills Partnership is an employer membership based organisation. It is an industrial partnership and the skills champion for finance, accountancy and financial services organisations to provide employer leadership to address skills needs within our sector and galvanise employer ambition and investment in skills.