Improving assessment of competence and reliability
Date 31 May 2012
From 1 July, DNB and the AFM will be assessing not only executive but also non-executive board members for their competence (previously referred to as expertise). These assessments will be more effective if banks keep to certain rules of play.
DNB asks that your bank comply with the following rules:
- Proof of competence
DNB expects to receive a written account of an individual’s competence, based on the relevant job profile. In practice, this information is often very sketchy or unrelated to the job profile, which leads to delays in the assessment process as DNB must reapply for the required information.
- First gain knowledge, then nominate as candidate
A candidate must have the right competence and level of expertise before he can be nominated for appointment to the Board of Management or Supervisory Board. Only in exceptional cases will DNB/AFM approve appointments that do not follow this sequence. If such approval is given, it will be on the strict condition that this knowledge is acquired within a specified period. If not, the supervisory authority can revoke the appointment.
- Report each new antecedent
Banks are legally obliged to notify AFM/DNB of any changes in the antecedents of senior executives or board members. This may include incurring fines for tax violations or traffic offences such as driving under the influence of alcohol. In practice, banks do not always report such matters. The supervisory authorities take a serious view of such omissions. Failure to provide notification of a new antecedent will result in a supervision antecedent for the bank and/or the individual concerned.
Tip: Also read the article Reassessment: only where reasonably justified in this Newsletter.
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