by one person or a small group of individuals? including a bank ’ s behaviour and culture in broader supervisory governance assessments could possibly also involve assessing the management bodies ’ culture of learning. can they critically reflect on past experiences, produce a vision of what the culture ought to be, and be candid about what needs to change to achieve it? and how agile and resolute is the bank in actually changing the beliefs, structures, dynamics and thus behavioural patterns that are preventing it from reaching, or restoring, its reputational and strategic goals? conclusion let me conclude. some of you here today are non - executive directors at banks. as such, you play a vital role in setting the right tone for your entire institution. your conduct is crucial in creating a healthy risk culture within your organisation, and you are responsible for nurturing behaviour which reflects the core values of your organisation and protects its best interests, not just in the short - term, but also in the future. beyond your technical skills and your experience in banking, there are broader expectations regarding your conduct and behaviour as board members. you must ensure that there are concrete consequences for failing to adhere to prudent behaviour. governance in the stricter sense deals with the structure which shapes a banks ’ actions. getting these structures right is of the utmost importance. but that is not the whole story. it is also relevant how people behave within these more formal structures and what the underlying cultural drivers of their behaviours are. banks would be well advised to seek to identify these behavioural patterns and to act on them if such patterns encourage conduct which is not in line with their values and risk appetite. it would seem that the least that we as prudential supervisor can do is ask the pertinent questions and challenge banks to look beyond governance in the stricter, more standard sense. i have tried to identify the kind of questions we might ask. i am very much looking forward to hearing your views in the ensuing discussion, which i hope and trust will be lively and stimulating. i promise we will reflect seriously on any suggestions that you might have. thank you. 1. kirkpatrick, g. ( 2009 ), “ corporate governance lessons from the financial crisis ”, oecd journal : financial market trends, 2009 / 1 ( 1 ), pp. 61 - 87 ; saghi - zedek, n. and tarazi, a., ( 2015 ), “ excess control rights, financial crisis and bank profitability and risk

. when assessing appointees to the board or other key management functions of european banks, we consider their knowledge, skills and experience, as well as their reputation and the time they are able to dedicate to the role. we also take into account any possible conflicts of interest arising from the bank ’ s various activities and clients which could potentially hinder the independence of mind of those occupying key positions. most importantly, suitability must be met at all times. the emergence of new facts that may affect the banks ’ or the ecb ’ s initial assessment of a board member ’ s suitability could lead to a reassessment of the suitability of that member, by either the bank or the ecb. in cases where a board member is deemed no longer suitable, he or she may be removed from their management function, as provided for under eu law. beyond individual suitability, we also have expectations for the board as an ensemble – i. e. whether collectively its members have the right combination of characteristics to adequately manage the bank. between them, board members must have a good range of skills and experience, including, but not limited to, being well - versed in risk management. they must have a clear picture and a good understanding of the risks banks face and be ready and able to mitigate those risks. in addition, banks ’ boards must be diverse – not just in terms of gender, but also in terms of broader diversity, as set out in eu law. [ 4 ] we have engaged with those banks which do not yet have diversity policies or internal targets for gender diversity at board level. as at the end of 2021, a third of the banks under our direct supervision did not meet their internal targets for gender representation at board level. of course, the economic environment and the skills required to navigate the banking business keep evolving. nowadays, a bank ’ s board should be well - versed in climate and environmental risks, as well as it infrastructure and digitalisation strategies. we therefore encourage banks to nominate board members with adequate expertise in these areas. digital banks are increasingly complex structures and cybersecurity has never been more important. however, at the end of 2021, only around a fifth of the euro area ’ s largest banks had sufficient it expertise at board level. increasing this ratio will be key for banks to navigate the digital era successfully. behaviour and culture the elements i have mentioned thus far make up the design and structure of a bank ’ s internal organisation. they