2
Setting strategy
2.1
A key role for any board is to set the firm’s strategy, to ensure that the key goals in that strategy are within the agreed risk appetite and to oversee executive implementation of that strategy.
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2.2
For all PRA-regulated firms the PRA will expect to see evidence that the board has established, and takes decisions consistent with a sustainable business model, ensures that the firm is managed to a clear and prudent strategy and risk appetite, and ensures that the firm meets its regulatory obligations.
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2.3
The setting of the corporate strategy is core to the responsibilities of the board and it is important that the strategy is owned by the board as a whole. However, as recognised in the PRA rules for the Senior Managers Regime[5], the chair of the governing body (‘the chair’) and chief executive have leading individual roles to play in the board’s development and maintenance of the firm’s business model. These roles include giving all the directors, but particularly the non-executive directors, the time and opportunity to contribute to the development of the strategy, and to provide appropriate challenge, before final sign off by the board.
Footnotes
- 5. See the PRA’s dedicated Strengthening Accountability webpages at www.bankofengland.co.uk/pra/Pages/supervision/strengtheningacc/default.aspx.
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