Our members participated in the establishment of the Irish Banking and Culture Board (IBCB) and work closely with the IBCB since its formation. Our members also have “speak up” policies and procedures in place, to encourage a culture of openness and to provide channels where employees can speak freely.

The Central Bank of Ireland’s (CBI) current legal and regulatory framework, including the Fitness and Probity Standards are embedded in our member banks and the Individual Accountability Framework, will enhance the existing Fitness and Probity Standards, and introduce a wider application of conduct standards for all employees and banks, which are in scope.
We have welcomed the Individual Accountability Framework since it was first proposed and we have engaged fully with the CBI, contributing detailed submissions in response to the CBI’s CP153 on Enhanced governance, performance, and accountability in financial services and CP154 on Consolidated Guidelines in respect of the CBI’s Administrative Sanctions Procedure.

Our submissions have sought clarification on various points, three of which we highlight below.

Prescribed Responsibilities
The intended scope of some Prescribed Responsibilities is currently unclear and to whom it is intended that they should be allocated.
In addition, it is unclear how firms can manage the proposal set out in the CBI’s guidance that sharing, splitting or multiple holders of responsibilities is not envisaged. Many of the Prescribed Responsibilities legitimately apply to a number of roles. This causes two different challenges:
i) Some responsibilities as currently articulated may (in existing operating models and governance structures) sit across different Pre-Approval Controlled Functions?(PCF) role holders.
ii) Some responsibilities may sit fully with different PCF role holders, relative to their accountable area / business line.

In many firms, there are Senior Management Team members who are not PCFs, some of whom are members and chairs of executive level committees where they are involved in strategic decision making for firms. As Prescribed Responsibilities may only be allocated to PCF role holders, this will result in Prescribed Responsibilities being allocated to a PCF role holder who does not manage the day-to-day activities, for them to be then delegated to a more appropriate person (e.g., CF1 role holder).

Importantly, we note that the CBI does not intend to interfere with “well-run firms’ corporate governance”. Therefore, CBI’s consideration of these practical challenges, would be very welcome and we expect the CBI to address the points we have raised in our submission in its feedback statement and revised guidance and regulations.

Conduct Standards
Conduct Standards impact the largest number of staff across the industry, at varying levels of seniority and experience. Clear guidance as to the proportionate application of these standards and reasonable steps expectations is required together with further guidance in relation to potential and actual breaches of Conduct Standards, the materiality of such breaches and how and when they are reported. Our view is that the reporting of such breaches should not occur until due process has concluded, to include allowing for any appeals’ expiry timelines.

Timelines
The introduction of the Individual Accountability Framework will impact thousands of individuals within the financial sector, and even thousands within some individual firms. As set out in the CBI’s draft Regulations and Guidance, the communication and training to impacted individuals is critical and it is a legal requirement set out in the Central Bank (Individual Accountability Framework) Act 2023, to ensure expectations are clear, understood and fully embedded within relevant processes and controls.

While many firms have made a lot of progress in their preparations for implementing the Individual Accountability Framework, our members had expected the CBI’s final Regulations and Guidance to be published in September 2023 and current delays pose challenges for some firms. The proposed timeframe for implementation by 29 December 2023 may not be sufficient for some in-scope firms to fully incorporate the Conduct Standards within internal policies, design and deliver comprehensive training on these standards and ensure high quality and consistent implementation.

In conclusion, we look forward to the publication of the CBI’s feedback statement, revised guidance and final regulations. Our members continue to work towards implementation of the Individual Accountability Framework in accordance with their statutory and regulatory obligations.