29 Amendments of Sharon BOWLES related to 2010/2303(INI)
Amendment 5 #
Motion for a resolution
Paragraph 3
Paragraph 3
3. Notes the shortcomings of the prescriptive US Sarbanes-Oxley Act, which failed to protect US institutions during the financial crisis, whilst at the same time increasing compliance costs for all listed companies, in particular SMEs, reducing competitiveness and hampering the creation of new listed companies; emphasises that present economic circumstances and the need for growth make it imperative to avoid an EU ‘Sarbanes-Oxley’ effect;
Amendment 7 #
Motion for a resolution
Paragraph 4
Paragraph 4
4. Notes the diversity of corporate governance structures throughout the European Union and the diversity of approaches that Member States take in regulating these structures; observes that national supervisors have an understanding of these diverse approaches and are in many instances best placed to take decisions following EU principles; recognises that a ‘one size fits all’ approach would be inappropriate and damaging to the competitiveness of financial institutions;
Amendment 13 #
Motion for a resolution
Paragraph 5
Paragraph 5
5. Recognises that the area of corporate governance is constantly evolving and is therefore ill-suited to a prescriptive approach and that in many areas a flexible ‘comply or explain’ approach in the form of codes of best practice is more appropriate; believes that ‘comply or explain’ is proportionate and can be applied across a wide range of financial institutions operating in various sectors and markets, but that it must be complemented by regular external evaluation and appropriate regulatory oversight;
Amendment 14 #
Motion for a resolution
Paragraph 5 a (new)
Paragraph 5 a (new)
5a. Nevertheless in other areas a procedure of enhanced comply or explain with scrutiny may be more appropriate with specific legislative requirements and more intrusive checks into compliance or variation. Both qualitative and quantitative assessment is required so that compliance does not degenerate into a box-ticking exercise;
Amendment 18 #
Motion for a resolution
Paragraph 6
Paragraph 6
6. Calls onRequests that the Commission to submit every proposal it considers to improve corporate governance to a cost-benefit impact assessment which focuses on the need to keep financial institutions competitive so that they can help deliver economic growth;
Amendment 27 #
Motion for a resolution
Paragraph 9
Paragraph 9
9. Calls for the establishment of mandatory risk committees at board level for all economically significant financial institutions; supervisors should establish fit and proper persons criteria and processes for senior risk officers and all material risk takers;
Amendment 31 #
Motion for a resolution
Paragraph 10
Paragraph 10
10. Believes that the risk committee should have responsibility for oversight and for advising the board on the current risk exposures of the financial institution concerned and should advise on future risk strategy, including strategy for capital and liquidity management, taking into account financial stability assessments developed by supervisors and national banks; risk committees must address general as well as core risks and have an outward as well as inward perspective especially for systemic institutions including consideration of impact on resolution plans;
Amendment 32 #
Motion for a resolution
Paragraph 11
Paragraph 11
11. Stresses that ultimate responsibility for risk governance lies with the board; and they must also take responsibility for demonstrating compliance and the formulation of recovery plans;
Amendment 37 #
Motion for a resolution
Paragraph 12 a (new)
Paragraph 12 a (new)
12a. Further suggests that procedures for recording when the risk committee is over-ruled should be established and the records provided to auditors and supervisors;
Amendment 38 #
Motion for a resolution
Paragraph 13
Paragraph 13
13. Notes the Transparency Directive, which requires institutions to disclose principal risks in their business review, and the Fourth Company Law Directive, which requires institutions to describe their internal control systems relating to financial reporting risks; observes that financial institutions should be required to disclose recovery planning and supervisory reports thereon;
Amendment 41 #
Motion for a resolution
Paragraph 14
Paragraph 14
14. Calls for a rationalisation of current EU legislation with the aim ofEU legislation to requiringe every institution to publish in its annual report a risk report and a business model setting out the board's approach to overall risk strategy, including its risk tolerance and appetite, risk policy, risk management and internal control systems, including compliance policy, thereby enabling investors and supervisors to assess whether the institution has identified keregulated financial institution to describe their business model in their annual report with an explanation of the board's approach to overall risk strategy, including its risk tolerance and appetite, and an understanding of the risks inherent in delivery of the business model; the report should further include a description of the steps the board has taken to ensure these risks are overseen and managed, and of how remuneration policy risks and whether the risk management and internal control systems relating to aligned to the delivery of the business model and the management by executives of those risks are adequateinvolved;
Amendment 49 #
Motion for a resolution
Paragraph 15
Paragraph 15
15. Calls on national supervisors to develop objective criteria for a ‘"fit and proper person’" test by which to assess the suitability of individuals to be added to an ‘"approved persons’" list for superviscontrolled functions; supervisors must perform their assessments and approvals procedure in a timely and efficient manner; for major and systemically relevant financial institutions supervisors should perform intrusive checks as to the fitness, expertise and diversity of directors both individually and collectively and their suitability in relation to the appointment, and for directors the wider composition of the governing body and their time commitment taking into account their other activities; insists that public officials must leave an appropriate period after leaving office, of at least one year, before joining the board of a major financial institution;
Amendment 53 #
Motion for a resolution
Paragraph 16
Paragraph 16
16. Calls for regular, formal external assessments to be carried out of the board and its performance, on the basis of objective criteria to be approved by the relevant national supervisor, and for summaries of these assessments to be included in annual reports for the benefit of investors, shareholders and national supervisors;legislation requiring boards of large financial institutions to submit their boards to regular external evaluation aimed at ensuring not only high standards of contribution by individual directors, but also that the board as a whole and its committees are in a position to deliver on the institution’s strategic objectives and management of risk; calls for institutions to be required to confirm in their annual report that they have undertaken such an evaluation, the name of the external evaluator, a description of the scope of the evaluation and to provide confirmation that they acted on its recommendations; suggests guidance may be developed by ESMA on the scope of such evaluations in consultation with the industry, shareholders and regulators; the board evaluation process must include an assessment of whether there is excessive domination by particular factions or individuals, in particular the relationship with the CEO.
Amendment 59 #
Motion for a resolution
Paragraph 17
Paragraph 17
17. Believes that there should be a basic aspresumption that the roles of the CEO and cChairman should be separate; notes that there are circumstances in whichwhen a combined role could be beneficialnecessary in the short term;
Amendment 63 #
Motion for a resolution
Paragraph 18
Paragraph 18
18. Believes that all non-executive members of unitary or supervisory boards should be of high calibre,; that every board should have non-executive members who possess recent and relevant financial industry expertise, whose rol and that these should be complemented by other non-executives with other areas of expertise and experience relevant to the work of the board,; that every regulated financial institution should have a board or governing body with a diversity of experience, expertise and character and that appointments should be made on merit;
Amendment 64 #
Motion for a resolution
Paragraph 18 a (new)
Paragraph 18 a (new)
18a. Publicly owned financial institutions and financial authorities must ensure open and independent appointment processes;
Amendment 71 #
Motion for a resolution
Paragraph 20
Paragraph 20
20. Believes that there should be a basic assumption that no person should servegeneral presumption against any person serving on more than three3 boards of directors of financial institutions; , this may exclude counting of additional directorships within a group if the business is of similar nature; considers that supervisors may require that directors of systemically relevant institutions should not have other directorships.
Amendment 77 #
Motion for a resolution
Paragraph 20 a (new)
Paragraph 20 a (new)
20a. Directors should have a general duty of care and be obliged to report material risks to supervisors;
Amendment 82 #
Motion for a resolution
Paragraph 21 b (new)
Paragraph 21 b (new)
21b. Points out that diversity of skills and wider vision is important at all levels and is not aided by silo-oriented recruitment policies and a preference for poaching instead of training; considers that this exacerbates the bonus culture; suggests that major institutions report on recruitment and training for diversity in skills and include it as a factor in risk assessment;
Amendment 84 #
Motion for a resolution
Paragraph 22
Paragraph 22
22. Stresses that properly disclosed share options withall share options must be properly disclosed and have vesting periods of at least three years for directo; considers agre a useful tool to bring the interests of directors into line with those of the shareholdersater use should be made of contingent capital instruments rather than shares as they have less conflict of interest for inducing short termism;
Amendment 113 #
Motion for a resolution
Paragraph 24
Paragraph 24
24. Believes that an enhanced three-way dialogue between supervisors, auditors (both internal and external) and institutions would make it possible toenable the early detection of substantial or systemic risk at an early stage; encourages supervisors, auditors and institutions to engage in open discussions and to increase the frequency of meetings in order to facilitate prudential supervis; further recommends that bilateral meetings take place between auditors and supervisors of major financial institutions;
Amendment 118 #
Motion for a resolution
Paragraph 25
Paragraph 25
25. Stresses that an auditor's primary role should not be unduly compromised by the burden of extra duties, such as an examination and assessment of non-audit information, which that falls outside his or her area of expertise; their area of expertise; nevertheless observes that an auditor serves the public interest and investors and therefore must have both a right and a duty to report directly to supervisors when aware of something of material concern to supervision and should participate in pan-industry assessments of specific controls;
Amendment 120 #
Motion for a resolution
Paragraph 25 a (new)
Paragraph 25 a (new)
25a. For major financial institutions an auditor or an independent firm may be asked by a supervisor for a report on a specific control aspect as part of a pan- industry assessment, especially for systemic risk; ESMA may draw up guidelines for or coordinate aspects of pan-industry control assessments; auditors may also be required to audit some or all of the supervisory returns;
Amendment 121 #
Motion for a resolution
Paragraph 25 b (new)
Paragraph 25 b (new)
25b. Insists that public authorities including ESAs and national supervisors must adhere to high standards of independence and corporate governance equivalents;
Amendment 122 #
Motion for a resolution
Paragraph 26
Paragraph 26
26. Encourages institutional and individual shareholders to take a more active role in holding the board and itstheir strategy to account to reflect the long term interests of their beneficiaries; suggests that voting strategy and actual voting of major institutional investors should be disclosed;
Amendment 124 #
Motion for a resolution
Paragraph 26 a (new)
Paragraph 26 a (new)
26a. Calls for legislation requiring all those authorised to manage investments on behalf of third parties in the EU to state publicly whether or not they apply and disclose against a stewardship code, if so which one and why, and if not why not;
Amendment 131 #
Motion for a resolution
Paragraph 27
Paragraph 27
27. Believes that significant transactions above a set size, with the benchmark to be decided by ESMA,defined size should require specific shareholder approval or be subject to a requirementn obligation to inform shareholders before the transaction can take effect; ESMA may issue guidelines concerning the appropriate benchmark;
Amendment 134 #
Motion for a resolution
Paragraph 28
Paragraph 28
28. Recognises that transparency is necessary with regards to related party transactions and that, on the basis of a benchmark to be set by ESMA, transactions which involve a related party should be notified to the listing authority and be accompanied by a letter from an independent adviser confirming that the transaction is fair and reasonable, or should be subject to a vote byof shareholders from whicwith the related party is excludedbeing precluded from this vote; ESMA may issue guidelines concerning the appropriate benchmark;
Amendment 144 #
Motion for a resolution
Paragraph 29 a (new)
Paragraph 29 a (new)
29a. Calls for an investigation of the inhibition on effective shareholder controls and for the removal of regulatory impediments to reasonable collaboration.