Gerry Brady, Independent Non-Executive Director & Consultant: The Individual Accountability Framework (IAF) is cross-industry regulation and its origins lie in the aftermath of the Global Financial Crisis (GFC), when, despite perceived public opinion, no senior bank official was successfully prosecuted for his/her role in the downfall of so many banks and the resultant catastrophic impact on economies. By association, the IAF regulation now applies to the regulated investment funds industry and will, I believe, enhance Ireland’s reputation as the domicile of choice for the international investment funds industry.

The regulated international investment funds industry offers opportunity as well as relative safety to investors and for this to work in practice as well as theory there needs to be a recognition that holding a position within this regulated industry comes with onerous responsibilities.

However, while personal accountability, particularly in a regulated industry, is important the approach taken should be proportionate and fair. Clearly, IAF will be more onerous for those holding executive roles in the investment funds industry and a querying/challenging approach to the work being conducted (rather than, for example, being a ‘letterbox’ for the receipt of reports) will need to be demonstrated and documented even more going forward.

In the case of board directors, the majority of directors are non-executive and, whilst I welcome the more explicit recognition of personal accountability for directors, I don’t believe much has changed in practice. The Common Conduct Standards are largely already enshrined in Company Law (to which directors are already subject) and the Additional Conduct Standards for directors (who occupy PCF roles), involving delegation and management of that delegation, are largely already laid out in the CP86 guidance for ManCos and Boards. What perhaps is now different is that for the small number of directors, who pursue this role for lifestyle purposes and provide little challenge to the financial accounts and operational reports presented to them at board meetings, there is now a prescriptive basis in regulation for challenging how they are discharging their onerous responsibilities. There are limits, however, as to how far this can go since Boards are ultimately subject to Company Law and a legitimate defence for an action against an individual director is the operation of collective responsibility.

In conclusion, IAF is not going to be life-changing for our industry but it is a further step in enhancing Ireland’s reputation as a domicile of choice with the highest standards.

Lisa Kealy, Partner, EY: The Individual Accountability Framework (IAF) is a step forward in enhancing individual accountability within the Irish wealth & asset management sector and is due to apply from June 2024. The IAF is expected to contribute to a more robust and resilient financial services sector in Ireland and reinforce Ireland’s reputation as a leading global centre for wealth & asset management.

We expect the IAF to have a positive effect on the Irish wealth & asset management industry by i) Enhancing investor confidence as the CBI demonstrates its commitment to holding individuals accountable for their actions, helping to mitigate the risk of misconduct and protect investors’ interests. ii) Improving the reputation of Ireland as a global centre as the CBI demonstrates its commitment to maintaining the highest standards of regulatory oversight and governance.

The CBI have deferred the implementation of this for non-executive and independent non-executive directors for a year to enable both the Central Bank and regulated firms to learn from the introduction of the new framework to executives, showing that the CBI wish to implement this in a considered, and targeted manner.