This page outlines the central regulatory requirements of the IFoA Member in the context of NED work.
This page and the associated documents are part of a series of resources designed to support IFoA members undertaking NED work.
Requirements for IFoA NEDs
General NED duties
The hallmarks of any NED are that an individual will be competent to take on the role and act honestly and reasonably at all times. The following attributes are demonstrative of the traits valued for NED work:
- Effective scrutiny
- Hold the executive accountable
- Challenge the business strategy
- Scrutinise executive proposals from a broad stakeholder perspective
- Show teamwork with fellow Board members.
These high-level attributes provide a basis for more specific skill sets that may be reflected in the law applicable to your area of work.
For example, the general statutory duties of a UK director are to:
- act within the companies’ powers
- promote the success of the company
- exercise independent judgement
- employ reasonable care, skill and diligence
- avoid conflicts of interest
- decline benefits from third parties
- declare any and all interests in transactions with the company
IFoA regulatory framework requirements
IFoA NEDs’ awareness of professional ethics and public interest issues helps to set the ‘tone at the top’ as a cultural influencer and complements Board responsibilities relating to good governance and corporate social responsibility.
The regulatory requirements expected of all IFoA Members, including those carrying out NED work, are set out in the IFoA regulatory framework. See the upholding standards section and our Regulatory Policy. Our Professional Support Service is available to help support you in understanding how the framework applies to you, in case of doubt. Supporting guidance explaining and illustrating this framework are generally available on this section of the IFoA website. These resources do not impose additional regulatory requirements.
The framework comprises:
The Actuaries’ Code
Like most professional bodies in the UK and throughout the world, the IFoA’s professional code of conduct, the Actuaries’ Code, forms the core of its regulatory framework. The Actuaries' Code is the foundation for trust in our Members. The Actuaries’ Code applies to a Member’s conduct as an individual, as assessed by a reasonable person (an ‘objective view’). Members are expected to comply with the Actuaries’ Code at all times.
The Actuaries’ Code sets out principles of ethical conduct. These are:
- Competence and care
- Compliance with the law and regulatory requirements
- Speaking up
The IFoA considers compliance with the Actuaries’ Code integral to managing risk in a NED role.
Actuarial Professional Standards
IFoA Actuarial Professional Standards (APSs) apply to all Members. Some of those APSs are practice-area specific and/or apply to a specialist role or area of work. Other APSs have broader application (‘cross-practice’ standards are denoted with an ‘X’). Cross-practice standards are applicable to all Members, but there are no additional APSs bespoke to NED work. This reflects the body of existing legislation covering NED requirements and the IFoA’s commitment to proportionate regulation.
Technical Actuarial Standards (TASs)
Technical Actuarial Standards produced by the Financial Reporting Council (FRC) apply to IFoA Members carrying out Technical Actuarial Work (as defined) that is within UK Geographic Scope.
Information about the TASs, their regulatory scope within the UK and how regulatory responsibility attaches to IFoA Members is on the FRC website. TASs apply to our Members and should be actively considered. TASs will not often however apply in the ordinary cause of business of a NED whose role is routinely that of a user. The FAQs and case study guidance discuss the relevance of specific TASs to NED work.
Supporting guidance on both APSs and TASs is available on our website. You can also contact the Professional Support Service with any queries.
Lifelong Learning and NEDs
Members of the IFoA have annual Continuing Professional Development obligations. Compliance is mandatory and you should ensure that you are recording the correct amount of CPD, in the correct manner.
Any learning activity that is relevant to your work and role and which addresses a personal development need can be recorded as CPD. For Category 2 Members (relevant to most Members doing NED work) there is a requirement to complete 15 hours of CPD, a minimum of five hours must be gained at external events and at least two hours must be Professional Skills Training (PST). The two hours embracing professional ethics and governance do not need to be based on IFoA PST videos or events alone. They may be gained through other activities that the individual Member considers appropriate, taking into account their work or role and their personal development needs, and can include business or management skills. Relevant CPD is available from a wide variety of sources and networking with other regulated professionals who carry out NED work is a good way to identify CPD targeted to your needs.
The IFoA’s Professional Skills Team is also currently developing new material focused on the ethical challenges of NED roles. The IFoA’s NED MIG also offers a series of advertised events that are increasingly relevant.
See the related NED guidance for more detail.
IFoA disciplinary overview
Professional accountability underpins public trust in IFoA members, acting as both a safeguard and an assurance of quality. Disciplinary enforcement is in the public interest. The IFoA disciplinary process is set at a comparable threshold to other professionally regulated individuals. A series of simple communication notes and short videos have been created to explain the process stage by stage. See the NED guidance and further resources page for more information.
The FRC has a separate disciplinary scheme and considers matters of significant public interest in the UK (defined in agreement with the IFoA). The FRC test of misconduct reflects its different locus and role. If a case is determined under the FRC Scheme, it will not then be determined under the IFoA Scheme and vice versa.
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