Roles of the Governing Body and the senior management
1. The Governing Body should adopt a rigorous process for setting and approving and overseeing the implementation of, the Authorised Person or Recognised Body's overall business objectives and risk strategies, taking into account the long term financial safety and soundness of the Authorised Person or Recognised Body as a whole, and the protection of its Customers and stakeholders. These objectives and strategies should be adequately documented and properly communicated to the Authorised Person or Recognised Body's senior management, Persons Undertaking Key Control Functions (such as the heads of risk management and compliance) and all the other relevant Employees. Senior management should ensure the effective implementation of such strategies in carrying out the day-to-day management of the Authorised Person or Recognised Body's business.
2. The Governing Body, with the support of the senior management, should take a lead in setting the "tone at the top", including by setting the fundamental corporate values that should be pursued by the Authorised Person or Recognised Body. These should, to the extent possible, be supported by professional standards and codes of ethics that set out acceptable and unacceptable conduct. Such professional standards and codes of ethics should be clearly communicated to those individuals involved in the conduct of business of the Authorised Person or Recognised Body.
3. The Governing Body should review the overall business objectives and strategies at appropriate intervals and in any event, at least annually to ensure that they remain suitable in light of any changes in the internal or external business and operating conditions. The Governing Body should also approve the approach and oversee the implementation of key policies pertaining to risk identification and management, capital and liquidity plans, compliance policies and obligations, and the internal control systems.
4. The Governing Body should also ensure that the senior management is effectively discharging the day-to-day management of the Authorised Person or Recognised Body's business in accordance with the business objectives and strategies that have been set or approved by the Governing Body. For this purpose, the Governing Body should ensure that there are clear and objective performance goals and measures (and an objective assessment against such criteria at reasonable intervals), for the Authorised Person, Recognised Body and the members of their Governing Bodies and the senior management to ascertain whether the Authorised Person or Recognised Body's business objectives and risk strategies are implemented effectively and as intended.
|Amended on (3 February, 2020).|