FSA Annual Report 2006/07 - Better Regulation Ltd
FSA Annual Report 2006/07 - Better Regulation Ltd FSA Annual Report 2006/07 - Better Regulation Ltd
Section five – Corporate governance statement and remuneration report FSA Annual Report 2006/07 61 Table 5.4 Accountability mechanisms Role of the Chairman Role of the Chief Executive Schedule of matters reserved to the Board Board delegations, including terms of reference of Committees Directors’ Biographies NedCo membership NedCo functions RemCo AuditCo RiskCo Regulatory Decisions Committee membership Listing Authority Committees membership http://www.fsa.gov.uk/Pages/About/Who/Accountability/index.shtml http://www.fsa.gov.uk/pages/About/Who/Management/Chairman.shtml http://www.fsa.gov.uk/pages/About/Who/Management/CEO.shtml http://www.fsa.gov.uk/pubs/other/SoM.pdf http://www.fsa.gov.uk/pubs/other/Gov_memo.pdf http://www.fsa.gov.uk/Pages/About/Who/board/index.shtml http://www.fsa.gov.uk/Pages/About/Who/board/committees/index.shtml http://www.fsa.gov.uk/pubs/other/Gov_memo.pdf http://www.fsa.gov.uk/Pages/About/Who/board/committees/index.shtml http://www.fsa.gov.uk/Pages/About/Who/board/committees/index.shtml http://www.fsa.gov.uk/Pages/About/Who/board/committees/index.shtml http://www.fsa.gov.uk/Pages/About/Who/board/committees/RDC/index.shtml http://www.fsa.gov.uk/pages/about/who/board/committees/laa/index.shtml Evaluations During the year, a number of evaluations relating to the Board and its members were carried out. NedCo reviewed the performance of the Chairman in consultation with HM Treasury and the Chairs of the Independent Panels. Likewise, the Chairman assessed the effectiveness of the Non-executive Directors on the basis of one-to-one discussions. In compliance with the Code, the Board carried out an evaluation of its effectiveness. This year the Board evaluation was done by a combination of bespoke questionnaires and follow-up discussions by the Board. The results of the effectiveness review were analysed and the findings were discussed by the Board. The Board agreed that overall its performance was effective although there remained some areas for further development. Governance structure Listing Authority Advisory Committee FSA Board Non-executive Directors’ Committee Listing Authority Review Committee Regulatory Decisions Committee Risk Committee Audit Committee Remuneration Committee
62 Section five – Corporate governance statement and remuneration report FSA Annual Report 2006/07 The Committee of the Non-executive Directors (NedCo) NedCo has been established and operates in line with the provisions of Schedule 1 to FSMA. Further details on its composition and the statutory functions it discharges can be found on the FSA website. NedCo met on four occasions during the year to ensure that its statutory functions were being satisfactorily discharged by: • discussions on the efficient and economic use of the FSA’s resources (for more information see the appropriate section below); and receiving reports, as appropriate on: • the Audit Committee’s work in keeping under review the question of whether the FSA’s internal financial controls secured the proper financial conduct of its financial affairs; • the remuneration awards made by the Remuneration Committee to the Executive Directors and the Chairman; and the performance-related bonus payments made to the Executive Directors; and • Executive Directors’ objectives. Report of the Non-executive Directors The unitary Board is the FSA’s primary decision-making body. It also exercises a broad oversight of all the FSA’s policy, strategic and operational activities. The extent of the Board’s role and the provision of timely and relevant information to the Board, its committees and NedCo, allows NedCo to rely largely on the Board’s work while sharing other functions, including oversight of internal controls, with the Audit Committee (AuditCo). The Remuneration Committee (RemCo) reports on its work to NedCo. Efficiency and economy During the year, NedCo kept under review whether the FSA is using its resources efficiently and economically. Data relating to the measurement of efficiency and economy within the FSA forms part of the management information presented to the Board quarterly, and which is reviewed specifically by NedCo. NedCo challenged information provided to it, sought further explanations when appropriate and encouraged enhancements to the reporting framework on a continuous improvement basis. Internal financial controls During the year NedCo has kept under review the question of whether the FSA’s internal financial controls secure the proper conduct of its financial affairs, in conjunction with AuditCo. The full statement on internal financial controls is on page 67. Remuneration of the Executive Directors NedCo has delegated to RemCo the function of determining the remuneration of the Chairman, the Chief Executive and the Executive Directors. RemCo The composition, functions and terms of reference of RemCo can be found on the website. During the year, Tom de Swaan retired from RemCo. He was replaced by Brian Flanagan.
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Section five – Corporate governance statement and remuneration report<br />
<strong>FSA</strong> <strong>Annual</strong> <strong>Report</strong> <strong>2006</strong>/<strong>07</strong><br />
61<br />
Table 5.4<br />
Accountability mechanisms<br />
Role of the Chairman<br />
Role of the Chief Executive<br />
Schedule of matters reserved to the Board<br />
Board delegations, including terms of<br />
reference of Committees<br />
Directors’ Biographies<br />
NedCo membership<br />
NedCo functions<br />
RemCo<br />
AuditCo<br />
RiskCo<br />
Regulatory Decisions Committee membership<br />
Listing Authority Committees membership<br />
http://www.fsa.gov.uk/Pages/About/Who/Accountability/index.shtml<br />
http://www.fsa.gov.uk/pages/About/Who/Management/Chairman.shtml<br />
http://www.fsa.gov.uk/pages/About/Who/Management/CEO.shtml<br />
http://www.fsa.gov.uk/pubs/other/SoM.pdf<br />
http://www.fsa.gov.uk/pubs/other/Gov_memo.pdf<br />
http://www.fsa.gov.uk/Pages/About/Who/board/index.shtml<br />
http://www.fsa.gov.uk/Pages/About/Who/board/committees/index.shtml<br />
http://www.fsa.gov.uk/pubs/other/Gov_memo.pdf<br />
http://www.fsa.gov.uk/Pages/About/Who/board/committees/index.shtml<br />
http://www.fsa.gov.uk/Pages/About/Who/board/committees/index.shtml<br />
http://www.fsa.gov.uk/Pages/About/Who/board/committees/index.shtml<br />
http://www.fsa.gov.uk/Pages/About/Who/board/committees/RDC/index.shtml<br />
http://www.fsa.gov.uk/pages/about/who/board/committees/laa/index.shtml<br />
Evaluations<br />
During the year, a number of<br />
evaluations relating to the Board<br />
and its members were carried out.<br />
NedCo reviewed the performance of<br />
the Chairman in consultation with<br />
HM Treasury and the Chairs of the<br />
Independent Panels. Likewise, the<br />
Chairman assessed the effectiveness<br />
of the Non-executive Directors on<br />
the basis of one-to-one discussions.<br />
In compliance with the Code, the<br />
Board carried out an evaluation of<br />
its effectiveness. This year the Board<br />
evaluation was done by a<br />
combination of bespoke<br />
questionnaires and follow-up<br />
discussions by the Board.<br />
The results of the effectiveness<br />
review were analysed and the<br />
findings were discussed by the<br />
Board. The Board agreed that<br />
overall its performance was effective<br />
although there remained some areas<br />
for further development.<br />
Governance structure<br />
Listing Authority<br />
Advisory Committee<br />
<strong>FSA</strong> Board<br />
Non-executive<br />
Directors’<br />
Committee<br />
Listing Authority<br />
Review Committee<br />
Regulatory<br />
Decisions<br />
Committee<br />
Risk<br />
Committee<br />
Audit<br />
Committee<br />
Remuneration<br />
Committee
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