Third of stockbroking firms fail Central Bank check
MORE than a third of stockbroking firms inspected by the Central Bank have failed to fully implement basic corporate governance rules recommended by their regulator.
In a letter sent to brokers earlier this week, the Central Bank described "deficient" corporate governance arrangements found at "many" of the firms it had inspected and said "some" firms' practices were "inadequate".
"It is apparent that while many firms have adopted some of the principles of good corporate governance there are still areas which would benefit from further development," the letter noted.
It went on to call on brokers to up their game by "reviewing" their arrangements in light of the nine separate recommendations made by the Central Bank's "thematic review" of 11 firms.
The review found that four of the firms had failed to appoint an independent non-executive director to their boards.
Some firms without independent directors "were found to have significant weaknesses", including a"lack of formalised board reporting" and "inadequate meeting minutes".
Firms claiming to have independent directors also came under fire for describing individuals as "independent" even when they were "significant shareholders" or provided services to the firm involved.
Some had failed to "formally document" their corporate governance rules.