Governance arrangements meaning

ARCHIVED: This Practice Note is archived and is no longer maintained. A bank loan is treated as a non-performing loan (NPL) if more than 90 days pass without the borrower making the agreed instalments or interest payments. Banks experienced an accumulation of NPLs in their books when borrowers' inability to repay was intensified by the financial crisis and subsequent recessions. When NPLs are proportionately high, banks' capacity to manage the riskiness of their lending is diminished. NPLs are a supervisory priority for the European Central Bank (ECB), which monitors the overall level of NPLs across euro area banks. Under the supervisory review and evaluation process (SREP), the ECB assesses whether individual banks adequately manage loan risk and whether they have suitable strategies, governance arrangements and processes in place. The ECB also regularly undertakes co-ordinated exercises to review the asset quality of the banks it directly supervises—it works with national supervisors to establish a consistent and effective approach to tackling and reducing bad loans, drawing on best practices as set...

This Checklist helps organisations steer through the financial sanctions regime’s requirements and highlights suggested good practice. Read alongside subtopic: Sanctions compliance, or, for law firms, Sanctions-law firm compliance. Senior management responsibility ☐ Promote strong senior management awareness of the organisation’s obligations under financial sanctions. Recommended. Financial Conduct Authority (FCA) Handbook, FCTR 8.3.1 and FCG 7.2.1. See Precedents: -Memorandum to board/senior management accompanying financial sanctions policy -Message from CEO reinforcing the financial sanctions policy (Insert any comments you may wish to make regarding your organisation’s arrangements) ☐ Involve senior management in shaping sanctions policy and, where relevant, approving new business relationships. Recommended. FCA Handbook, FCTR 8.3.1. See Precedents: -Memorandum to board/senior management accompanying financial sanctions policy -Message from CEO/Senior Member/Senior Partner on the introduction of a financial sanctions policy -Message from CEO reinforcing the financial sanctions policy -Financial sanctions policy (Insert any comments you may wish to make regarding your organisation’s arrangements) ☐ Engage senior management in matters where a possible target match cannot be...

How to use this Checklist This Checklist offers a structured approach to embedding AI governance within a professional services business. Robust AI oversight calls for a highly tailored method, aligned to the specific enterprise; it will vary by business type, risk tolerance, available resource, and the maturity of current governance arrangements. Nonetheless, this Checklist signposts the core considerations to support firms in adopting AI responsibly while safeguarding client trust, meeting regulatory obligations, and maintaining professional standards. Further reading Practice Note: Artificial intelligence and machine learning—an introduction to the technology Practice Note: The AI project lifecycle—a quick guide Precedent: Policy—use of generative artificial intelligence Practice Note: Negotiation guide—AI contracts Practice Note: Artificial intelligence—UK regulation and the National AI Strategy AI governance checklist—professional services Stage of implementation Key takeaways/further reading Define the scope: clearly set out what ‘AI’ covers for your governance framework (for example)...

What is the background to TPR’s guidance? As funding positions strengthen and market innovations come through, trustees and employers are encountering a wider suite of financial, governance and insurance tools to meet their schemes’ long-term aims. Insurer buy-out was once viewed as the definitive DB endgame, yet TPR has now confirmed it is not the only route. The guidance is intended to help trustees steer through emerging options, judge their suitability, and make informed choices that improve financial outcomes, strengthen governance and bolster member security. It also emphasises the relevance of scheme-specific circumstances and the importance of obtaining professional advice. What are the key points, aspects, and themes of the guidance? The guidance is framed around several core themes. Endgame planning is no longer a single-track journey, and trustees are encouraged to explore a spectrum of outcomes: aiming for self-sufficiency, continuing to run on the scheme, transferring to consolidators such as superfunds, or insuring benefits via buy-ins and buy-outs. Each route carries distinct characteristics, risks and benefits,...

In its press release, TPR urged trustees of smaller DC pension schemes with assets below £100m to assess if members’ interests are better served within larger schemes. Driving consolidation remains central to TPR’s three-year corporate plan, launched in May 2024. The regulator argues that smaller arrangements are more likely to exhibit weaker governance. “All savers deserve to be in schemes with strong governance,” said Gaucho Rasmussen, TPR’s executive director of regulatory compliance. “Where trustees cannot match the best in the market, on value or governance, they should consider whether moving to a better-value scheme is best for their savers.” Trustees were encouraged to prioritise value and governance when deciding...

In this issue: Save As You Earn Corporate governance Useful information Dates for your diary Weekly highlights from other practice areas Save As You Earn HMRC updates guidance on SAYE savings arrangements and deductions from pay HMRC has revised its guidance at ETASSUM34120 to confirm that employees cannot use third‑party loans or other finance to boost the amounts saved under an SAYE scheme. The scheme must instead be operated in line with the SAYE prospectus, which specifies that contributions are made via deductions from pay. This further clarification appears to respond to market products where participants receive an immediate refund of monthly contributions from a third party funder, in exchange for an arrangement fee and a share of any profit ultimately realised when the SAYE option is exercised and the shares are sold. For more detail on the requirements applying to SAYE‑linked savings contracts, see Practice Note: How SAYE schemes work and key features. See: ETASSUM34120...

This Practice Note considers the requirements and guidance on risk control (the risk control rules) relevant to firms, drawn from the Senior Management Arrangements, Systems and Controls sourcebook in the Financial Conduct Authority (FCA) Handbook (SYSC) and the Prudential Regulation Authority (PRA) Rulebook, and includes measures that will replace Commission Delegated Assimilated Regulation (EU) 2017/565 (the UK MiFID II Organisational Regulation) upon its revocation on 23 October 2025. Risk control rules applying to UK financial services firms The risk control rules applicable to firms are contained in: the overarching obligation to maintain effective risk control processes in SYSC 4.1.1R SYSC 7 Risk control SYSC 21 Risk control: guidance on governance arrangements Dual-regulated firms should also be mindful of parallel provisions in the following sections of the PRA Rulebook: Risk Control (which applies to CRR firms, as defined in the PRA Rulebook Glossary) Group Risk Systems (which applies to CRR firms) Credit Unions—11 General organisational requirements...

This Practice Note covers: the meaning of corporate governance governance considerations for private companies the UK stance on corporate governance in relation to share schemes, including: the regulatory position on share schemes institutional investor guidance how companies assess and monitor their compliance with the UK Corporate Governance Code (the Code) corporate governance for financial services firms as contrasted with other businesses This Practice Note sets out the core ideas of corporate governance and directs readers to fuller, more detailed Practice Notes on each regulatory and legislative strand of the UK framework, as well as the institutional investor guidelines. What is corporate governance? In broad terms, corporate governance concerns how companies are directed and controlled at the highest level. The governance framework aims to establish arrangements that ensure fair treatment across a company’s various stakeholders. The Cadbury Report of 1992 is widely seen as the original foundation of...

IP COMPLETION DAY: At 11pm (GMT) on 31 December 2020, the Brexit transition/implementation period that followed the UK’s withdrawal from the EU comes to a close. In UK law this moment is termed ‘IP completion day’. From that point, core transitional arrangements end and significant changes start to take effect across the UK’s legal framework. This note provides guidance on areas affected by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for lending lawyers? [Archived]. BREXIT: From 31 January 2020, the UK is no longer an EU Member State, but entered an implementation period during which, for many purposes, it continues to be treated by the EU as a Member State. As a third country, the UK cannot participate in the EU’s political institutions, agencies, offices, bodies and governance structures (except to the limited extent agreed), yet it must continue to meet its obligations under EU law (including EU treaties, legislation, principles and international agreements) and submit...

This llp Agreement is dated [ insert date and month ] 20[ insert year ] Parties The persons identified in Part A of Schedule 1 ( Initial Members ); and [ insert name ] LLP, a limited liability partnership (registration number OC [ insert number ]), whose registered office is at [ insert address ] ( LLP ). background [ The LLP was formed under the Act on [ insert date ]. OR The Initial Members plan to incorporate the LLP under the Act on, or immediately following, the date of this agreement. ] The Initial Members enter into this agreement to define the LLP’s internal arrangements and to set out their respective rights, obligations and duties in relation to the LLP...

1 Introduction Our website is a key channel for engaging with existing and prospective clients and is a significant expression of our brand. Accordingly, it is essential that our website activities are managed appropriately. This policy explains our procedures for running the website, including: who holds responsibility for website management; content governance; website security and data protection; permitted and prohibited use; linking; accessibility; client confidentiality. 2 Responsibility The [ state who ] holds overall responsibility for managing our website. Their responsibilities include: authorising and supervising content; ensuring the website meets legal and regulatory requirements; overseeing linking arrangements; maintaining the website terms and conditions and the privacy policy; and carrying out an annual review of this policy to confirm it operates effectively. 3 Cookies and other...

1 General information Date of review: [ Insert date ] Person(s) conducting review: [ Insert name(s) ] 2 Review and findings Item reviewed Outcome If you hold a governance arrangements document outlining your governance structure and key governance roles/areas, is this document current in respect of: how your governance is configured what each governance role/area covers who is accountable for each role/area ☐ Yes ☐ No (set an action point at 3 below) Is your governance structure chart up to date regarding: how your firm is organised...

File reviews Conducting file reviews signals that an organisation takes quality and compliance seriously. Reviews and audits yield meaningful data and statistics and, if issues are uncovered, the audit findings can be channelled into your risk register or other planning so remedial measures are enacted. Ensuring the right levels of supervision are firmly in place is essential. A Supervision policy can be valuable, clearly setting out supervision arrangements, including the following: file audits/reviews governance and reporting lines work allocation oversight of work case progression supervising correspondence outsourcing arrangements...

Proportional representation of political groups Authorities and committees must apportion seats to mirror the proportional make-up of political groups. The issue is whether an independent member, meaning one not belonging to any party group, can be placed on the planning committee. The position depends in part on the facts and the authority’s constitution, but where the authority is organised into political groups and no statutory exceptions apply, an independent would need to form a group with at least one other member to gain representation and thus a seat on the planning committee. In some authorities, several independents join to create an independent group, sometimes called ‘the independents’, and are therefore entitled to representation on the planning committee. This rule does not extend to area committees, and authorities may disapply it if unanimously approved alternative arrangements are adopted. This all proceeds on the basis that the authority is a ‘relevant authority’ as defined in section 21 and Schedule 1 to the Local Government and Housing Act 1989 (LGHA 1989)...