and senior insurance managers regimes. under these regimes all senior managers, including certain non - executive directors, will be held to a clear standard of behaviour. but the primary role of all neds is independent oversight and challenge of the executive and the pra recognises that the actual responsibilities of neds within the scope of the regimes differ from those of executive senior managers and they should be clarified and limited accordingly. key messages from the statement are : bis central bankers ’ speeches • it is a responsibility of boards to establish strategy, set the risk appetite and monitor risk across the business and hold management to account ; • the risk appetite must be clearly owned by the board, integral to the strategy and actively used to monitor and control risks and inform key business decisions ; • boards should articulate and maintain a culture of risk awareness and ethical behaviour ; • boards should include individuals with a mix of skills and experience that are up - todate and cover the major business areas in order to make informed decisions and provide effective oversight of the risks ; • but this does not mean expertise in every aspect of a broad and complex financial business – the point is to have the diversity of experience and capacity to provide effective challenge across the full range of business ; • boards should act in a co - operative and collegiate manner whereby the nonexecutives support and encourage executive management and vice versa ; • but this should not inhibit the non - executive directors from challenging executive management and holding them effectively to account ; • non - executive directors should ensure they have the time and resources and access to the business they need to fulfil their duties ; • executive management have a responsibility to ensure the board can exercise its role and should exercise their judgement in bringing key issues to the board ’ s attention at an early stage ; and • the principle of good governance, including independence of the chairman, should also apply to material subsidiaries. boards of regulated subsidiaries need to be able to take decisions where required to meet their own legal and governance responsibilities or in the interests of the safety and soundness of the subsidiary. but, that does not mean they should operate outside the general governance and objectives of the group to which they belong. independence in this context is carefully defined and limited. as you will all be aware, we have undertaken significant engagement with the boards of banks and building societies on governance. through our supervisory work, we are seeing improvement but in our view there is more to do. board effectiveness will therefore remain a key priority. to conclude, governance matters

their own paper monies – the threat of competition would stop them over - issuing. but the costs of using several different monies, and the need to monitor the change in their relative values, reduce the benefits from using paper money as a means of payment. competitive monies have arisen only rarely and usually in situations where government money is either absent or very badly managed. works mean that monetary policy cannot be run on autopilot. 19 the members of the mpc are able to exercise their own discretion over how to meet the target. members of the committee are held publicly accountable for their individual votes. third, these arrangements reflect both our experience of previous monetary failures and the nature of accountability in our political system. the separation between the elected government which sets the target and the monetary policy committee which makes the month - to - month decisions on the level of interest rates necessary to meet the target is natural in our parliamentary system. since countries vary in their political constitutions it is not surprising that their monetary constitutions also differ. the apparent success of the mpc has led many to ask whether aspects of its design could be carried over to other areas of public policy. the principles of widespread support for the objective of policy, the incorporation of the lessons of history, and the need to ensure technical expertise have general applicability. in the case of monetary policy, there is widespread agreement on the objective of low inflation, the design has taken on board the lessons from our post - war experience about the difficulty of targeting monetary aggregates or the exchange rate, and the mpc has been set up to include appropriate expertise. moreover, the mpc has to set only a single instrument – bank rate. it may not be easy to find other areas of policy to which the mpc example can be immediately applied. but it is certainly worth thinking imaginatively about the possibilities for in other areas in which trust in future collective decisions is necessary. pensions policy, for example, has for years been bedevilled by a combination of extraordinary technical complexity, which means that decisions take a long time to reach, and the reversal of policies adopted by earlier generations. this is very much an area where we have been unable to constrain future collective decisions. and it is one that would benefit from greater stability of policy. at the international level, the importance of constraining future behaviour can be seen in such diverse areas as trade policy and climate change. the difference in the degree of agreement on the objectives of policy