Scrutiny of City appointments drops to lowest level since the credit crunch

08 Jul 2013 | 08:53 am | 2 min. read

The number of City boardroom appointments scrutinised by the UK financial services watchdog has dropped to its lowest level since the credit crunch, according to research by international law firm Pinsent Masons.

According to the latest available data, 246 applicants for top jobs in financial institutions were interviewed by the City watchdog in 2012, down from 528 at the height of the financial crisis.

Pinsent Masons, which obtained the information through a Freedom of Information request, says that this is partly because applications for boardroom roles within regulated organisations have dropped to their lowest level in 5 years.

However, the firm also points out that the proportion of applicants called in for interview by the now defunct UK Financial Services Authority also fell to its lowest level for several years during 2012 - dropping to just 4%.

Pinsent Masons says that, under the current regime, candidates being considered for top roles in banks and insurance companies – such as Chairman, Chief Executive, Financial Director and Non Executives – are often called for interview if they are expected to take a role at a systemically important organisation, or if the regulator has specific concerns about their ability to do the job.

The rules for vetting senior personnel in financial institutions - 

known as the Significant Influence Functions regime - were highlighted as one of the key areas for reform in the final report of the Parliamentary Commission on Banking Standards.

All Change

Under proposals put forward by the Commission, led by Andrew Tyrie MP, the current process will be replaced by a more targeted "Senior Persons" regime.

Board-level Directors will be required to formally accept responsibility for key areas of risk, with a failure to meet obligations potentially leading to a custodial sentence in the most extreme cases.The new regime would also create an ongoing monitoring process rather than a 'one-off' assessment upon appointment.

Seismic Decisions

Monica Gogna, a London-based Partner specialising in financial services regulation at Pinsent Masons, says:

"After a period of turbulence, the boardrooms of UK financial institutions are showing signs of stabilising. What is really interesting about these figures, however, is that the proportion of those being interviewed has dropped for the first time since the credit crunch.

"While we are still some way away from the 'light touch' days of 2008 - when less than 1% of candidates were interviewed by the FSA - this data may suggest that we are actually already moving to a position where the regime is becoming more focussed and more targeted on those at the very top."

"We are also seeing fewer withdrawals from those candidates subject to interview during the vetting process, which suggests that the financial institutions themselves have a clearer view of what the authorities are looking for in applicants and recruiting accordingly."

"The level of boardroom scrutiny over the past few years has arguably been unsustainable and there now appears to be some recognition that it is also undesirable. Where the previous regime cast the net relatively wide, the proposals put forward by the Parliament Commission on Banking Standards would have a much narrower focus on the most senior people and create more of an ongoing relationship with the regulatory authorities."

"Given public anger over what is perceived as an inability to hold senior executives to account, it is right that the current regime be reviewed. However, these are seismic decisions, the impact of which will reverberate throughout the UK economy for years to come. A balance has to be struck between being vigilant while creating a system that does not discourages new entrants – whether it be talent or organisations – from coming into the UK market."

Latest press releases

Show me all press releases

Pinsent Masons advises Condeco Group on major acquisition to transform workplace management

Multinational law firm Pinsent Masons has advised Condeco Group on its acquisition of ProxyClick SA, the leading global provider of enterprise visitor management software.

Pinsent Masons advises Suffolk Council on its public-private partnership to deliver £700m social development and housing projects

Multinational law firm Pinsent Masons has advised Suffolk Council on its proposed public-private alliance with Lovell Partnership to deliver nearly 3,000 much-needed homes across the region.

Pinsent Masons advises on €1 billion variable annuity policies transfer

Multinational law firm Pinsent Masons Irish corporate insurance team has advised Athora Ireland plc (Athora) on its transfer of a book of variable annuity policies to Monument Life Insurance DAC, with assets under management valued at nearly €1 billion for circa 13,000 customers.

People who viewed this press release also viewed

Show me all press releases

Pinsent Masons advises on €1 billion variable annuity policies transfer

Multinational law firm Pinsent Masons Irish corporate insurance team has advised Athora Ireland plc (Athora) on its transfer of a book of variable annuity policies to Monument Life Insurance DAC, with assets under management valued at nearly €1 billion for circa 13,000 customers.

Grant Thornton and Pinsent Masons collaborate to support effective data sharing across financial services

Leading business and financial adviser Grant Thornton UK LLP and multinational law firm Pinsent Masons have joined forces to support firms with how they can share data safely, efficiently and effectively across financial services in a push to enable open finance.

Pinsent Masons appointed to AIG’s UK and EMEA Corporate legal panels

Multinational law firm Pinsent Masons has been appointed to insurance giant AIG’s UK and EMEA Corporate legal panels with a broad remit to provide advice on a full range of legal services.

For all media enquiries, including arranging an interview with one of our spokespeople, please contact the press office on

+44 (0)20 7418 8199 or 

Location contacts