Jon Pain, the Managing Director of Supervision at the
Financial Services Authority, delivered a
speech today in which he provided some interesting examples of the regulator's new, so-called "intensive", approach to regulation: see
here. These included being "at the heart of the analysis and judgements being made by senior management" in mergers and acquisitions and actively encouraging changes in board membership. With regard to regulated firms' governance, Mr Pain observed:
... it is clear to us that the financial crisis exposed significant shortcomings in governance and management across numerous firms. And although poor governance was only one of many factors that contributed to the financial crisis, it was an important one. We are therefore looking closer at behaviour and culture in firms, particularly ensuring two key things: [1] that good culture and behaviours in firms is being driven by senior management; and [2] that good culture and behaviours are being reinforced by effective corporate governance and the role of the boards.
Through the crisis we have also seen examples where boards did not sufficiently challenge the executive or understand their firms’ business models and their inherent risks, and where boards did not simply receive the relevant management information to be able to carry out their important oversight role. Boards need to make sure they have the right people, asking the right questions, informed by the right information ... where this is not the case we will take action".
The 
