Why NED’s Really are the Gem in the Regulatory Crown

Imperium’s inaugural NED Breakfast Club took place at the end of April and saw Emma Bailey from KPMG in the Crown Dependencies take the floor as guest speaker.

Emma worked for nearly 20 years at the Guernsey Financial Services Commission (GFSC) and shared useful regulatory insight in the investment funds sector.

Beginning the session Emma shared her thoughts on how the role of a NED has changed with the shifting regulatory environment and how the role has now evolved into a career.  Emma commented how encouraging it was to see more diversity on boards in Guernsey and more NEDs coming through who have very recent industry experience.

Emma explained to guests how important the role of a NED is to a regulated structure and how they can often be the go-to person to ask questions of or seek clarification on certain matters relating to the entity. On the other side the NED should also be the challenger on the Board, probing and asking the questions no one else wants to ask.

Sharing a wide array of matters on a NED’s radar from investors, to valuations and insurance, Emma highlighted four key areas she felt Directors needed to take closer interest in, with current trends and regulation.  These were ESG, Regulatory Compliance, Risk and Data.

Emma shared her thoughts on how third-party risks are rapidly evolving and can manifest across multiple categories, including strategic, financial and operational risks.  She said these include looking at third party contracts, service providers and even information security, privacy policy and procedures.

Linking risk to data which touches on AML, FATCA and CRS, Emma discussed how data and systems will reduce the risk surrounding these requirements and also help alleviate the island’s current problem with resources, as managing data better with automation will provide a sustainable long term solution.

Touching on ESG, Emma highlighted the “S” (the social) and discussed the ethical role NEDs need to play when looking at investments and potential decisions.  Having these tough conversations and keeping in mind the ever-changing geo-political landscape.

Discussing regulatory compliance Emma used a well-known analogy, that prevention really is better than cure with a very telling picture of teeth and the dentist!

Emma explained that her new role in the Advisory Team at KPMG in the Crown Dependencies is focused on supporting clients seeking to run a health check over their businesses before the regulator calls.  If you want to find out more about how Emma and the KPMG Advisory team can help, please contact her at emmabailey1@KPMG.com.

The breakfast series is open to Non-Executive Directors on Fund Boards in Guernsey, and anyone interested in attending should in the first instance register their interest with Charlotte Parr – charlotte.parr@imperiumfunds.co.uk.

The next NED Club will take place in September 2022, with a venue and speaker to be announced.