Hector Sants, in his last speech as chief executive of the Financial Services Authority, was interesting on the subject of the banks, insurers and financial firms proposing inappropriate and unqualified individuals to senior posts – or significant influence functions (SIFs), in the regulatory jargon.
I remain surprised at the gap between what some boards are doing and what the FSA believes they should be doing. And the FSA is still surprised by the number of times firms put forward candidates who are not the right individuals for the role in question and where there is no clear expectation of how that candidate will contribute to the overall skill and competence of the board. In these cases it is clear there has not been a robust appointments process undertaken by the firm.
The FSA, in its post-crisis intrusive guise, these days conducts interviews of SIF candidates – and has spotted plenty of duffers. Sants said that over the past two years the FSA has determined 653 applications – 48 were withdrawn, 39 of which "were demonstrably due to serious concerns identified by the FSA interview panel".
The list of failings is remarkable:
Too frequently we still see applicants who:
• don't understand what the job entails and have no job description;
• have done no due diligence into the firm they are proposing to join;
• are unable to discuss the risks/issues facing the sector in a proportionate way to the role they are applying for; and
• often significantly underestimate the commitment required to perform the role effectively.
Sants's conclusion:
There is still a view held by some, unfortunately, that they are 'entitled' to a position regardless of their skills and experience.
Four years after the banking crisis, that's a depressing verdict on the financial industry's attempt to improve its culture.
