After years of planning and preparation, the Central Bank of Ireland’s Senior Executive Accountability Regime (SEAR) is now live for in-scope firms. SEAR aims to enhance personal accountability by requiring individuals to demonstrate they’re taking reasonable steps to fulfil their responsibilities. The regime demands a high level of clarity and empowers individuals to challenge the status quo and address previously untouched issues.
Individuals must be confident in their narrative. The challenges boil down to four fundamental questions:
What are your responsibilities?
How do you discharge them?
How can you be confident in your judgements?
How do you trust people to execute tasks that fall under your area of responsibility?
Drawing from our experience working with various organisations, we believe there are six essential foundations pre-approval controlled functions (PCFs) should consider to discharge their responsibilities effectively.
Integrating SEAR into daily operations is easier when people understand and engage with its spirit. This includes considering SEAR’s impact on day-to-day work and company culture.
You can delegate tasks but not responsibility. Ensure that those contributing to your responsibilities have the necessary skills, time and competence. Clearly define roles and how they interconnect.
Assigning responsibilities is only part of the process. Ensure decisions are made at the appropriate level and that proper steps are taken to assess and address issues when they arise.
Evidential adequacy is often challenging. To build confidence, document how decisions were made, when and where they were discussed, and the rationale behind your judgements.
Regulators expect SEAR to align with business objectives and strategic execution — a critical test is whether ‘the words and music are aligned’.
SEAR is here to stay. Ensure new employees understand its implications and that operational changes account for SEAR requirements. Maintain up-to-date vital documents, including PCF statements of responsibilities and the management responsibilities map.
PwC has partnered with a regtech provider to offer our Individual Accountability Framework (IAF) platform, Accountable Compliance. This platform addresses all your IAF/SEAR needs in one place. Our managed service offering supports clients with ongoing annual compliance obligations under IAF post-implementation.
PwC’s Accountable Compliance managed service provides firms with a single data source and operationalises compliance obligations under the IAF. Key benefits include:
While IAF presents significant challenges, they are not insurmountable. Firms can successfully navigate these challenges by planning for ‘Day 2 Compliance’ and implementing the right solution. To discuss any aspect of your IAF compliance journey or explore PwC’s Accountable Compliance managed service, please get in touch with Sinéad Ovenden or Julie Kennedy. Together, we can work to protect your firm against regulatory risk while ensuring a stable, transparent and trustworthy financial system for all.