1          Is it more difficult for women to be approved by the FSA? – put simply, I’ve seen no more difficulties arise in the case of female potential NEDs than male potential NEDs.  Should women be put off applying for NED positions in the financial services sector?  No, but they should consider cutting their teeth on a position in a smaller organisation before putting their names forward for positions at the larger banks and insurers (and that applies to the men too).

2          Have a process for appointment and document that – it’s no longer sufficient to simply call on people known to members of the board.  If headhunters are to be involved, they’ll need to be given a clear spec of the skills-set that you’re seeking at an early stage.  Do document the process in advance and at all stages as you go through it; you’ll need to be able to evidence to the FSA what’s been done, so documenting each step is critical.

3          Decide on any special skills that you’re seeking – this is principally a job for the chairman and the nominations committee, but board buy-in is also
important.  Whatever skills-set or experience is decided on, make sure that isn’t going to alter before you tell the FSA about that; explaining any deviation at a later stage is likely to be awkward.  This might involve getting board buy-in to the skills-set and experience before starting the search for candidates.

4          Flush out any Form A problems at interview – before your preferred candidate can be appointed as a NED, he or she will need to be approved by the FSA to perform the controlled function of being a non-executive director (CF2).  A Form A is used for this and it includes a section about the appointment process, why the candidate is considered competent and capable to perform the controlled function and how the candidate’s experience complements the firm’s business strategy and activities and the markets it operates in.  There’s also a section about fitness and propriety and interviews are an opportunity to investigate any potential difficulties in respect of these areas.  Remember that this is the firm’s application and you need to be satisfied on all of these points before sending the Form A to the FSA.

5          Do your own background research and identify any sensitive areas – headhunters should help with background research on candidates, but you can do your own work too, ideally ahead of interview.  This should include checking the companies that the candidate has been involved with over the last ten years or so (eg any problems that have been publicised; any financial difficulties or enforcement action), as well as checking the candidate personally.  The results of these checks could result in additional interview questions – or lead to a conversation with the FSA about a candidate at an early stage in the selection process to identify whether the FSA may withhold approval.

6          Make the offer conditional on obtaining FSA approval – it’s an obvious point, but worth making.  If the FSA doesn’t approve a candidate, you don’t want a claim for breach of contract.

7          Complete the Form A before the offer letter is issued – even though the offer should be conditional on FSA approval, it pays to complete the Form A before the offer letter is issued.  If you can’t complete the Form A in sufficient detail, this may be because more information is needed, but it may also be because there’s an issue that needs to be resolved.  Either way, it’ll be easier to ask more questions before the offer letter is issued.

8          Engage the FSA at an early stage and keep it engaged throughout – this should flush out any areas of sensitivity or any problems that the FSA might have with a candidate and perhaps give time to resolve those to keep a candidate in the frame.

9          Immerse the preferred candidate in information about the business – have a pack of information available well in advance of appointment and have all of the relevant people available to meet and brief the candidate.  The pack should be handed over and the briefings should take place well before the interview with the FSA.  Get feedback on the information pack and use that to improve it in the future.

10        Carry out mock interviews – assuming that the potential NED will be interviewed by the FSA before approval is given, mock interviews should usually be carried out to prepare the candidate.  Plan for at least two sessions, particularly in the case of people who haven’t been an approved person before.

1          Start preparing early – it’s obvious, but no less relevant for that.  It’s rare for an ARROW visit to come out of left field and so schedule preparation to start at least three months before you think a visit’s likely to happen and allow longer if you can.  Visits should be managed, not left to chance.

2          Have a project plan – brainstorm at an early stage and capture the items and tasks and allocate responsibilities.  Setting out action items on a project plan will help to ensure nothing’s missed and the list should include things like checking key people’s availability and making sure that key documents (that the FSA will want to see) are readily available and can be provided promptly.

3          Be prepared for the FSA to review operational activities – traditionally, ARROW visits have tended to involve an overview of the business, its strategy, prudential matters and systems and controls, with an occasional deep-dive into specific areas of the business.  However, the FSA will be using future visits to review recovery and resolution plans, where operations on the ground will be an important element in ensuring continued delivery of critical economic functions.  Expect increased focus on operational areas of the business.

4          Be prepared for the FSA to want to see people operating at the coalface – it follows from the previous point that the FSA will want to speak to more of the staff dealing with customers/clients and back-office functions.  They’ll need to be prepared for that – and be comfortable speaking to the FSA, which is probably a new experience for them.

5          Carry out mock interviews – part of getting people comfortable with a visit is to carry out mock interviews, with someone playing the part of the FSA.  This can be useful practice for the real thing and should highlight areas where further work is needed but also build confidence.  It’s very important that this balance is struck.

6          Ensure consistency of message – one point that invariably crops up in mock interviews is a slight inconsistency of message between interviewees.  This isn’t to say that everyone has to say exactly the same thing (and there would be something wrong if that were the case), but confusion or lack of clarity over a key point can give the wrong impression.  Mock interviews should flush out where this will happen.

7          Briefing notes – briefing notes can be invaluable in setting out key points on a topic.  They can be used to pass information to senior management on an area of the business where they need detail to be distilled or they can provide an overview for more junior staff.  The key is to make them easy to complete and digest – and to make sure they’re circulated in good time before the FSA visit.

8          Tell the FSA anything it should be told about before the visit – if there’s anything that the FSA should be told, the time to do that is before a visit.  It’s better than having a point emerge during an interview.

9          Don’t be dependent on presentations – as a rough rule of thumb, only the CEO/MD and the FD (for financial information) should have a presentation pack at interview.  If it helps to have a crib sheet of points to refer to or even to have some papers as a security blanket, that’s fine, but don’t assume that you can work your way through a powerpoint presentation.

10        Decide what messages you want to give – the FSA will have its agenda of points, but well-prepared firms can have their points too.  What’s been done that you feel is good and worthwhile?  How do you think the firm’s improved?  Have any messages ready and work them into what’s said at interview.

Solving the euro crisis requires money, whether as part of a rescue package for Greece or to ensure funding for banks and sovereign states.  The European financial stability facility will need to be funded by Eurozone member states.  Where will their money come from and who will invest in members states’ sovereign debt?

If a bank – or banks more generally – need to be recapitalised or strengthen their capital bases, investors will need to be found.  Where are they and will they be prepared to provide capital in a form that meets the relevant regulatory requirements?

If a bank needs to ease pressure on stresses to its business, asset disposals could be a solution, but a purchaser needs to have access to funds.  Who will provide that?

There’s continued pressure on banks to lend to small businesses, but are other sources of funding needed too?

Nobody can assume that the new money needed will be available when it’s most critically required.  Action needs to be taken now to identify new sources of funding and investment – from emerging markets, wealth funds, private equity and hedge funds, corporates and others – and establish how that money can be accessed safely and appropriately for all concerned and on viable terms.  Otherwise, there’s a danger that the current crop of steps and measures aren’t effective in helping to resolve this crisis or to prevent the next one.