On 23 December 2013, the Central Bank of Ireland (CBI) published a revised Corporate Governance Code for Credit Institutions and Insurance Undertakings. The revised Code will apply from 1 January 2015. Until then, institutions remain subject to the existing Code requirements.
Notable amendments to the Code include:
Chief Risk Officer
There is a new section on the role and responsibilities of the Chief Risk Officer (CRO). Institutions shall be required to have a member of senior management with specific responsibility for managing the risk control function. Duties of the CRO shall include:
- Ensuring effective processes exist to identify and manage risks
- Reporting risks in a timely and comprehensive manner to the risk committee
- Facilitating the setting of the risk appetite by the board
Where a medium or low impact institution does not require a dedicated exclusive CRO due to its nature, size and complexity, another pre-approval control function may fulfil the role.
Where a high impact insurance undertaking or reinsurance undertaking does not require a dedicated exclusive CRO due to its nature, size and complexity, the Chief Actuary may fulfil the role.
The approval of the CBI must be obtained prior to making any such arrangements.
Chairman
The prohibition on a Chairman concurrently holding the Chairmanship of another credit institution or insurance undertaking or reinsurance undertaking has been revised so that a Chairman of group subsidiaries which are medium or low impact institutions can, subject to CBI pre-approval, hold the position in a sister institution if he has sufficient time to fulfil the role.
Chief Executive Officer
The Chief Executive Officer (CEO) is required to be appointed to the board.
The CEO of an institution which has been designated as a medium-low or low impact institution may, subject to CBI pre-approval and if he has sufficient time to fulfil the roles, occupy the role for two additional medium-low/low impact institutions.
Role of the board
Additional detail on the role and responsibilities of the board has been inserted.
Board meeting frequency
The board is required to meet at least four times per calendar year and at least once in every six month period.
Committees
Risk committee
This risk committee must comprise of a majority of non-executive directors, independent non-executive directors or a combination of both and be chaired by a non-executive director or an independent non-executive director.
Cross committee membership
The audit committee and the risk committee must have at least one shared member.
Minimum number of members
There must be a minimum of 3 members on each of the audit and risk committees.
Board diversity
The board (or nomination committee where one exists) of an institution has to put in place a written policy on diversity, regarding the selection of persons for nomination to the board.
Annual compliance statement
Institutions that do not have a financial year ending 31 December may change the submission basis of their annual compliance statement to their financial year.
For further information on the revised Code, please call or email any of the key contacts or your usual William Fry contact person.
Contributed by Niall Campbell.
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