City appointments 'not being scrutinised'

Despite the reams of paper generated by discussion of how the financial services sector is entering into a new era of regulation, boardroom appointments remain lamentably unregulated by external sources, according to a new report from international law firm Pinsent Masons.

After examining the latest available data, the organisation revealed that 246 applicants for top jobs in financial institutions were interviewed by the now-defunct Financial Services Authority (FSA) in 2012, down from 528 at the height of the financial crisis.

One factor in this is that the number of boardroom appointments has slumped in this period and is currently at a five-year low, the law firm admitted.

However, the proportion of applicant interviewed by the FSA also fell to four per cent, suggesting that the levels of scrutiny are still relatively weak.

Monica Gogna, a London-based partner specialising in financial services regulation at Pinsent Masons, argued boardrooms are now stabilising after enduring a long period of turbulence and uncertainty.

"This data may suggest that we are actually already moving to a position where the [regulatory] regime is becoming more focused and more targeted on those at the very top," she declared.

She added that the levels of boardroom regulation seen over recent years were arguably unsustainable and stifling to economic expansion, suggesting that a process that is more concentrated on important areas could be a positive move for financial services in the UK.

"A balance has to be struck between being vigilant while creating a system that does not discourage new entrants - whether it be talent or organisations - from coming into the UK market," concluded Ms Gogna.

The rules for vetting senior personnel in financial institutions are to be re-examined following the final report of the Parliamentary Commission on Banking Standards, which highlighted this area as one where major reform would be desirable.

While public opinion is clearly on the side of increasing accountability levels, industry professionals will no doubt be keen to balance this with a degree of flexibility.