New corporate governance rules for banks and insurers

by Business & Leadership, November 8th, 2010.

Minimum statutory requirements on how banks and insurance companies should organise their governance have been set out by the Central Bank today. The new Corporate Governance Code for Credit Institutions and Insurance firms has been published by the Central Bank today in an attempt to avoid any future crises by putting “robust governance arrangements” in place. The code includes provisions on the membership of the board of directors, the role and responsibilities of the chairman and other directors and the operation of various board committees.

Head of financial regulation, Matthew Elderfield told the chairperson’s forum today that the financial services sector needs to learn from the financial crisis and improve corporate governance practices, adding that they should not just hope to match international best practice but set an even higher standard.

The new standards are on a statutory basis – rather than a “comply or explain” code, explained Elderfield. “The buck stops with the board of directors,” he said. “It’s time to bring fresh blood into the board room, which brings more challenge, asks more awkward questions and devotes more time to assessing risk. Depositors, policyholders and, indeed, Irish taxpayers have the right to expect no less from the guardians of their money.” (continue reading… )

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