avantage Presentation on Arrow Visits: Governance Issues

In the first presentation, Tony Brian, Head of Operational & Regulatory Risk, Lloyds Banking Group, Insurance Division, provided an overview of the key governance issues that had been highlighted by the FSA during a recent ARROW visit.

Tony stressed the importance of robust preparation for an ARROW visit, with the preparatory activities being undertaken under the guidance of a formal project team. The benefits of using briefing materials and mock interviews as part of the preparations was also discussed.

A comprehensive roundtable discussion ensued on the tone of recent ARROW visits that had been undertaken by the FSA and, in particular, the increasing focus on the competence of individual approved persons, directors and non-executive directors.

In the second presentation, Iain Wright, Director, avantage (UK) Limited, provided his insights into recent developments at the FSA and current hot topics.

The evening’s discussions were  concluded with further roundtable discussions and a summary of the key issues provided by Andrew Shiels, Managing Consultant and Head of the Edinburgh practice, avantage (UK) Limited. It was observed that during 2009, 56 Section 166 reports were issued by the FSA, of which 22% had related exclusively to issues associated with corporate governance. In addition, 25% of critical issues highlighted by the FSA in recent ARROW risk mitigation programmes have related to issues of management, governance and culture, often provoked by strategic uncertainty on the part of senior management. Furthermore, it was also noted that recent ARROW visits had become more intrusive, with the tone of visits being influenced by the personality and approach of individual supervisors.

You can download a copy of the speaker presentations here.

Of further interest may be our Practice Note ‘FSA ARROW Governance Reviews : Be aware of the governance hotspots and make sure you are prepared’, a copy of which can be downloaded here.