Hector Sants, chief executive of the Financial Services Authority (FSA) delivered a speech today in which he reviewed the progress of regulatory reforms since the financial crisis and, in particular, focused on how more action is needed to deliver effective corporate governance. He stressed that this was crucial to delivering financial markets and institutions that we can trust and that act in the interests of everyone. He explained that the principal regulatory deficiency, pre-crisis, was the inadequate capital and liquidity standards in banking. A great deal of progress has been made in addressing this deficiency and this will go a long way towards dealing with the symptoms of the crisis but he warned that less progress had been made on the specific issue of delivering effective corporate governance and that this needed to be urgently addressed. He explained that, in his view, the crisis exposed that there were many senior executives and non-executives in key board positions who lacked the technical skills to manage the risks in their banks.  There was, in consequence, a general recognition that the regulator should seek to address this problem.  The FSA does this by assessing the suitability of a candidate to undertake a role, and crucially, by ensuring an appropriately robust, rigorous and yet proportionate appointment process is undertaken by the firm.  This assessment needs to take into account the overall composition of the board as well as the individual’s knowledge and competence.