4.7 Individual accountability of directors

4:144 Members of the board of directors and the management committee must have an appropriate understanding of, and contribute to, areas of the business for which they are collectively accountable with the other members, even if an individual member is given sole responsibility for specific areas.

4:145 Not having have a specific role or sole responsibility for a particular area does not exempt members of the board of directors or management committee from the need to have this understanding and hence to prepare for and participate in the discussions and decisions of the board of directors or management committee in an informed and active manner.

4: 146 A member of the board of directors or management committee who holds or held a position in the company at the time when the facts giving rise to certain findings occur(red) (e.g. cases of money laundering, fraud or other findings arising from on-site inspections or legal proceedings) may - depending on the applicable law - be held responsible for those findings, even if there is no connection between his/her individual roles and responsibilities within the management body and the findings in question. Without prejudice to any other specific circumstances that may be relevant in a particular case, facts indicating that a person in office may be held individually accountable for not complying with his/her collective responsibility to properly address the issues that gave rise to the findings could impact his/her suitability for the position. The timing, relevance and severity of the findings will be taken into account in assessing accountability.

4.7.1 Scope

4:147 An assessment of individual accountability is carried out within the scope of a suitability assessment when the respective entities where the person concerned leaves and enters office are regulated financial institutions.

4.7.2 Findings

4:148 Only sufficiently established facts that have been determined by a supervisor to be (i) recent, (ii) relevant and (iii) severe are taken into account when considering the individual accountability of the person concerned. The findings may be supervisory, regulatory or judicial in nature and refer to legal or regulatory breaches or deficiencies in the institution’s activity. Findings of the following authorities are generally considered: a financial supervisor (e.g. a prudential authority or an authority in charge of anti-money laundering and counter-terrorist financing supervision), a judicial authority, a tax, competition or data protection authority, etc. 

4.7.3 Assessment

4:149 The findings are assessed to determine whether the person concerned can be held individually accountable. The outcome of this assessment may impact the suitability of the person concerned, based on one or more of the suitability criteria set out above (professional integrity, independence of mind and/or expertise).

4:150 A detailed assessment of all the relevant facts and circumstances surrounding the concept of accountability is conducted, inter alia by considering what the following were, at the relevant times: (a) the level of awareness of the person concerned (e.g. not aware, partially aware or fully aware); (b) the nature of the roles and responsibilities of the person concerned (e.g. first line, second line or third line of defence); (c) the type of behaviour shown by the person concerned (e.g. neglectful, passive or active); (d) other aggravating or mitigating circumstances. 

4:151 To assess whether the appointee can be held individually accountable for issues in the entity where he/she left office, factual information is obtained from this entity, the person concerned and/or the competent authority of the entity to which the facts underlying the findings refer. An interview with the person concerned is usually conducted.

4.7.4 Outcome of the assessment

4:152 The detailed assessment of individual accountability results in one of the following outcomes:

  • a positive decision (with no ancillary provisions[1]), where suitability can be confirmed despite the concerns;
  • a positive decision with ancillary provisions (condition or obligation), or a positive decision outlining supervisory expectations with regard to the supervised entity and/or supervisory expectations as to future behaviour of the appointee; or
  • a negative outcome, where suitability cannot be confirmed owing to the severity of the individual accountability and the lack of sufficient mitigating factors.

4:153 These possible outcomes do not preclude the competent authorities from closely monitoring the appointee’s suitability and taking further measures as part of the ongoing governance supervision of the supervised entity.

[1] The notion of “ancillary provisions” is detailed in the point “Outcome and consequences of the assessment”.