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They should be appointed in recognition of their personal and professional repute, and perform their duties without being perceived as biased due to any relationship with the institution, its significant shareholders or its management team. Moreover, institutions should guarantee independence in order to avoid groupthink. The board of directors as a whole should have sufficient knowledge, skills and expertise to  1  Keynote speech by Frank Elderson https://www.bankingsupervision.europa.eu/press/speeches/date/2022/html/ssm.sp220611~fa99fcbb52.en.html. 1  properly understand the institution's activities, ensuring the board's effective ability to take decisions independently and autonomously in the best interests of the institution. Risk culture Another aspect I would like to emphasise is the importance of promoting a strong risk culture across the institution. The elements I mentioned earlier (challenge, involvement and independence) are the cornerstones of a good internal organisation structure. An appropriate risk culture emanates from the board of directors, but it has to be properly embedded across the organisation, especially among senior management. I would call this “tone from the top and echo from the middle”. Decisions such as excessive risk taking, putting the bank’s short term interests ahead of its longer-term interests, can damage an organisation’s reputation and culture. The board of directors is responsible for setting the strategy and defining the sustainable business model that is right for the institution, without getting bogged down in the details. That is the job of senior management. Banking is a sector that is very vulnerable to uncertainty and reputational issues.