is progressing with the implementation of its own voluntary code of corporate governance. i ’ m pleased that ifia showed such leadership in developing this code and i think it will soon be time to assess the extent of take up and compliance in the sector. more generally, this will be a good opportunity to take stock about what has worked well – and what has not – with the corporate governance code and regulatory framework in this area. strong corporate governance is such a crucially important foundation for a prudently run and compliant financial services sector that it ’ s essential we get the regulatory framework right and be prepared to update it periodically. there will be a lot of interest in this exercise and i ’ m sure that the institute of directors will again be a sensible voice in the consultation process and a source of useful input. in the meantime, however, the current code remains in force as is and those of you in this room who are directors at financial services companies continue to have the challenging task of overseeing your firms in a period of seemingly never - ending financial uncertainty and regulatory change. there are a huge range of issues you will need to stay on top of, but i ’ m sure you know that already. as i mentioned earlier, where we provide a risk assessment under prism, this will hopefully assist you with your work. but taking a step back, let me suggest a few areas that all directors in all financial services firms might reasonably take a strong interest in during the year ahead. there are obviously some sector - specific issues that should be worrying some of you. i hope the boards of the domestic banks are pressing their management teams to make real progress in the workout of those troubled mortgage and small business portfolios i mentioned, for example. however, let me draw out three areas of broad applicability across all sectors. firstly, i would suggest that boards of directors should take a close interest in ensuring that their financial services firm has in place a high quality risk appetite statement that is well understood and implemented throughout the firm in practice. a clear articulation of the acceptable level of risk undertaken by a firm, for example in terms of potential lending, investment portfolio or insurance underwriting losses expressed in terms of p & l or balance sheet events at different confidence intervals, is an important discipline and an essential complement to a well - articulated business strategy. indeed, our corporate governance code requires that such a statement be in place. however, the quality of what we see, in a range of sectors, is uneven and

generating roles. this is not to suggest that diversity is all about gender. there are no studies that i have seen for the eu or ireland on racial and ethnic or sexual orientation diversity in business, but i have no reason to believe that it is any better than the uk – where 78 % of uk companies have seniorleadership teams that fail to reflect the demographic composition of the country ’ s labour force and population – or indeed the us, where the figure is 91 %. so the current situation, in ireland at least, is concerning. last year, we reviewed a sample of diversity policies in regulated firms, which many financial services firms are now required to have ( under the crd, solvency ii and the central bank ’ s corporate governance codes ). these are not going to turn the dial. in the main, they were striking for their lack of ambition. in many cases internal targets that are already being met have been set, many lack accountability, and there is little evidence that progress against them is being monitored. remarkably, for two large financial services firms, their diversity policies were exactly the same, word for word, with the exception of the names of the firms and some of the targets they had. notwithstanding these issues, there are financial services firms that have a healthy gender balance, with nominations among certain banks and insurance companies at 44 % and 45 % female applicants over the past five years. there are financial services firms that have diversity policies and programmes that demonstrate that diversity is a priority. there are also sector wide initiatives, such as the 30 % club, and the work of fusion itself, which are focusing on addressing these issues, which the central bank is actively participating in. but more needs to be done. what actions are we taking as stated by governor lane during his address to the european financial forum, “ the financial services industry can certainly expect to see a continued increase in the intensity and intrusiveness of our engagement on diversity. ” 24 diversity is supervisable. we can legitimately expect regulated firms to meaningfully address diversity and inclusion in the boardroom, at the executive level and the pipeline of talent needed to run the organisation in the long - term. our supervisory work is, therefore, being enhanced as follows : we can assess whether boards and the executive are taking responsibility for actively promoting diversity and inclusion at all levels of the firm, to improve decision - making and how this, in turn is impacting on behaviour and culture. we will review the policies that are