The article explores the suitability requirements for directors in European Union (“EU”) banks with a focus on the knowledge, skills and experience criteria. After an introduction in part 1, part 2 considers the evolution and legal basis for the fit and
proper assessment for bank directors in the EU. It describes the assessment of directors conducted pursuant to Article 91 of Directive 2013/36/EU as amended (CRD IV) by the nominating banks and by the relevant competent authority. The latter’s assessment serves a critical gate-keeping function when it forms part of the initial decision to authorise a bank, or to approve candidates for board positions or newly appointed directors. The banks too play a key role by ensuring that the directors they nominate meet the suitability standards and continue to do so throughout their tenure. This part also examines the revised framework for suitability assessments set out in Directive 2024/1619 (CRD VI). Part 3 explores the meaning of the knowledge, skills and experience criteria and the difficulties faced by competent authorities and banks in making suitability assessments. Part 4 reflects on the “new” categories of knowledge needed around the board table with a focus on ESG risk and technology risk. It considers whether these needs could be addressed by the appointment of directors with expertise in these areas or the establishment of special committees with mandates in these areas. Part 5 explores the concept of collective suitability and its implications for the assessment of suitability of individual directors. Finally, part 6 examines the manner in which education and training can remedy any deficits in directors’ knowledge base.
European Business Law Review