{ "docId": "019dd923-5e88-73ef-bd58-07b375a7cd5b", "docSlug": "335ba522863769dc", "documentTitle": "Banking and capital markets trends 2020: Laying the foundations for growth", "authorId": "PwC", "authorName": "PwC", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "strategy_consulting", "sourceTypeLabel": "Strategy consulting", "presentationDate": null, "orientation": "landscape", "aspectRatio": 1.414, "pageNumber": 24, "pageCount": 88, "prevPage": 23, "nextPage": 25, "slideType": "other", "function": "summarize", "density": "overcrowded", "nDataPoints": 0, "notes": "Part of a series on Internal Audit Planning.", "elementsJson": [ "headline_text", "paragraph", "bullet_list" ], "metadataConfidence": 0.9, "imagePath": null, "slideHref": "/slides/019dd923-5e88-73ef-bd58-07b375a7cd5b/24", "deckHref": "/decks/019dd923-5e88-73ef-bd58-07b375a7cd5b", "deckJsonHref": "/decks/019dd923-5e88-73ef-bd58-07b375a7cd5b.json", "deckAnchorHref": "/decks/019dd923-5e88-73ef-bd58-07b375a7cd5b#slide-24", "components": [ { "bbox": null, "kind": "callout", "text": "The primary focus of remuneration and governance regulations is to mitigate a culture of excessive risk taking, shift the focus from short-term to long-term sustainable and risk-adjusted outcomes, and enhance the focus on conduct in the sector.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd952-3be5-7612-8a2a-e6101db00494", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.45, "w": 0.45, "x": 0.52, "y": 0.26 }, "kind": "list", "text": "Confirm all remuneration and governance regulations that apply to the firm have been applied in a proportionate manner.\nIf required, confirm that a remuneration committee has been established with terms of reference clearly defining its role and remit in setting and determining remuneration.\nAssess whether remuneration and governance practices are in line with the overall firm-wide risk framework and appetite.\nAssess whether remuneration and governance policies and their application are fully compliant with the regulatory requirements.\nReview controls to ensure Material Risk Takers (MRTs) are accurately and completely identified, and ensure that the list of MRTs remains current and up to date during the year.\nAssess communications to MRTs to ensure they are fully aware of their roles and responsibilities and how this impacts their remuneration arrangements.\nAssess whether there are appropriate processes in place to operate (where applicable) the structural pay requirements (cap, deferral, payment in shares and malus/clawback).\nAssess controls in place to ensure that regulatory submissions are on time, complete, accurate and to an appropriate standard.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a6332c5c-90d8-4d86-ad88-a6b1bc787421", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.45, "x": 0.05, "y": 0.54 }, "kind": "list", "text": "A detection of minimal or limited compliance against the remuneration and governance requirements by the PRA and/or FCA will result in a heightened focus on the firm and the wider regulated practices. The reverse of this scenario is also possible.\nAt times firms have been fined excessively (and publicly named) for breaching conduct standards through the use of 'aggressive' sales incentives.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ba748b7b-3c00-4588-aa05-b83c107aa593", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.45, "x": 0.05, "y": 0.22 }, "kind": "paragraph", "text": "Remuneration code", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2a3384a3-3cd7-417a-b5bd-75fecd6870eb", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.45, "x": 0.52, "y": 0.22 }, "kind": "paragraph", "text": "Internal audit focus areas", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2a5567bd-6614-4846-97c0-9532a431acff", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.45, "x": 0.05, "y": 0.44 }, "kind": "paragraph", "text": "In the UK, the PRA and the FCA enforce a series of complex and ever changing requirements. Compliance against those requirements is key.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7c8fceee-7052-4a93-a341-ec44ed433040", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.45, "x": 0.05, "y": 0.51 }, "kind": "paragraph", "text": "Key risks", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7fbee59d-2136-4cbc-938e-f4ab124eefc3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.45, "x": 0.05, "y": 0.35 }, "kind": "paragraph", "text": "The primary focus of remuneration and governance regulations is to mitigate a culture of excessive risk taking, shift the focus from short-term to long-term sustainable and risk-adjusted outcomes, and enhance the focus on conduct in the sector.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "89f31ec9-f536-4c6a-b119-15abc882d899", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.45, "x": 0.05, "y": 0.26 }, "kind": "paragraph", "text": "In the wake of the financial crisis, scrutiny and oversight of remuneration practices (and the behaviours they drive) has toughened significantly. 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