The Courage to Challenge

For boards and compliance teams across licensed financial firms, the key message is that effective oversight depends on directors having the confidence, information and independence to question senior management and each other. Compliance and company secretarial functions should treat this as a prompt to test whether challenge is visible in board dynamics, committee deliberations, minutes, escalation routes and decision records. Firms should review board packs for clarity, ensure dissent and alternative views are documented, and encourage executives to create space for scrutiny rather than consensus.

RegCanary sees this as informational rather than a new rule, but it remains relevant to supervisory assessments of governance, risk culture and board effectiveness. Actionable steps include a board effectiveness review, director training on challenge and escalation, stronger minute-taking of material concerns, and periodic reporting to the board on how challenge influences decisions. Smaller firms should focus on practical mechanisms; larger groups should assess whether group and subsidiary governance arrangements support independent challenge.

No deadlines are attached, so prioritisation should be proportionate. The opportunity is improved decision quality, stronger risk oversight and greater supervisory confidence in governance arrangements.