The Financial Services Authority has published a Dear CEO letter in which it clarifies its approach regarding the approval and supervision of persons performing significant influence functions (SIFs). Executive and non-executive directors fall into this category. The letter makes clear, inter alia, the FSA's expectation that firms subject to close and continuous monitoring should engage with the FSA at the short listing stage when recruiting for the roles of chair, chief executive and senior independent director.In the press release accompanying publication of the letter, the FSA states:
The enhanced SIF regime is one of the FSA’s responses to the financial crisis, which exposed governance and risk management shortcomings across numerous firms in roles such as chair, CEO, and finance or risk director. In the 12 months since October 2008 the FSA has conducted 172 SIF interviews, resulting in 18 candidates withdrawing their applications which shows there is considerable scope for some firms to be more robust in their own recruitment processes".
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