Internal governance of the Governing Body

5. The Governing Body should also ensure that the senior management is responsible for carrying out regular stress testing on credit, operational, market, and liquidity risks. The Governing Body should annually review the stress scenarios and take action to address any perceived issues arising from those reviews.
6. The Governing Body should have appropriate practices and procedures for its own internal governance, and ensure that these are followed, and periodically reviewed to ensure their effectiveness and adequacy. These policies and procedures should cover a formal and transparent process for nomination, selection, and removal of the members of the Governing Body (see the GPM), and a specified term of office as appropriate to the roles and responsibilities of the member, particularly to ensure the objectivity of his decision making and judgment. Appropriate succession planning should also form part of the Governing Body's internal governance practices.
7. The Governing Body should meet sufficiently regularly to discharge its duties effectively. There should be a formal schedule of matters specifically reserved for its decision. The working procedures of the Governing Body should be well defined.
8. The Governing Body should also ensure that when assessing the performance of the members of the Governing Body and its Senior Managers and Persons Undertaking Key Control Functions, the independence and objectivity of that process is achieved through appropriate mechanisms, such as the assignment of the performance assessment to an independent member of the Governing Body or a committee of the Governing Body comprising a majority of independent members. See the GPM for the independence criteria for Authorised Persons and the GPM for the independence criteria for Recognised Bodies.
Amended on (3 February, 2020).