IRELAND Law and Practice Contributed by: Keith Robinson, Barry Tyrrell and Julia Mullin, Dillon Eustace LLP
Specific matters regulated in the CGR include: • the required composition of the board of directors, including a requirement for a major - ity of independent non-executive directors (subject to certain exceptions for banks which are subsidiaries of groups) and a minimum of five directors, or seven directors for banks designated as “high impact” pursuant to the CBI’s probability risk and impact system; • a prohibition on a person who has been an executive director or member of the senior management of the bank during the previous five years from becoming chairman; • a requirement to appoint a suitably qualified and experienced chief risk officer; • a requirement to establish audit and risk com - mittees of the board and, in certain cases, remuneration and/or nomination committees; • a requirement for a formal annual review of board and individual director performance and, in the case of banks designated as “high impact”, an external evaluation every three years; • a requirement for boards of banks designated as “high impact” to put in place formal skills matrices to ensure an appropriate skills mix on the board; and • a requirement for all banks to submit an annual compliance statement to the CBI specifying whether they have complied with the requirements of the CGR. Banks deemed significant institutions for the purposes of CRR are required to comply with certain requirements of those regulations relat - ing to limitations on the number of directorships and sub-committees of the board instead of the requirements in the CGR dealing with the same matters. The European Banking Authority (the “EBA”) published its final guidelines on internal governance on 2 July 2021 (EBA/GL/2021/05)
(the “EBA Guidelines”). The EBA Guidelines pre - scribe the corporate government arrangements that banks are required to implement in accord - ance with Article 74(1) of the Fourth Capital Requirements Directive (2013/36/EU) (“CRD”). Within the sphere of corporate governance, the CBI has emphasised that diversity and inclusion are key tenets of robust and resilient corporate structures. This has been evident in publications and reports of the CBI, including a 2018 report which highlighted that banks need to make pro - gress to ensure that they are adequately diverse and inclusive. The CBI also publishes an annual report con - cerning the demographics of applications received from firms for CBI approval for certain senior roles in financial firms. The 2023 report conveyed that 32% of individuals put forward for senior roles were female, compared to 16% in 2012. 4.2 Registration and Oversight of Senior Management The CBI has put a fitness and probity regime in place. It applies to individuals performing pre - scribed roles in regulated firms, including banks. These roles are referred to in the legislation as controlled functions (“CF”) or pre-approval con - trolled functions (“PCF”). The fitness and probity regime is set out in Part 3 of the Central Bank Reform Act 2010 (as amended). The purpose of the fitness and probity regime is to ensure that persons performing these impor - tant roles are sufficiently capable and of good character. Banks are therefore required to ensure that those persons: • are competent and capable; • act honestly, ethically and with integrity; and
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