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Fitness and probity for the HR department

The financial crash of the noughties resulted in a series of regulatory changes in Ireland and one of these relates to the quality of people employed in positions of responsibility.

A new Fitness and Probity Regime came into effect on 1 December 2011 for all regulated financial service providers other than credit unions.  This new regime was fully implemented by 1 December 2012 and amended in 2014

The result of this is that there are some 58 positions designated either ‘pre-approved control functions’ (PCF) or ‘Control Functions’ (CF) by the Central Bank of Ireland and appointments to these are subject to approval by the bank. The Fitness and Probity regime also extends to both executive and non-executive board members.

Typically PCF positions will be roles that are senior such as CFO, COO, CEO, board members and ‘Heads of’ functions such as risk and audit. CFs will be lower level positions where staff members are giving advice on behalf of the regulated entity or exerting significant influence.

This means that HR managers need to ensure that the pre-employment screening and approval process is fully completed in good time for their senior appointments to start work.

The European Banking Authority set out the process, criteria and minimum requirements for assessing the suitability of pre-approved persons and these are ultimately aimed at ensuring robust governance arrangements and appropriate oversight.

The Fitness and Probity Standards provide that an individual performing a PCF or CF is required to be:

  • competent and capable;
  • honest, ethical and to act with integrity
  • financially sound

This means that the appointee needs to have the right qualifications for the job, must have verifiable experience and robust personal finances.

Some questions that HR managers may need to ask;

  • Are the applicant’s qualifications bona fide and at the level claimed on their CV?
  • Does their work record check out?
  • Were they working at the level of seniority they claim?
  • Are any gaps on their CV explainable?
  • Do they have a criminal record not only in Ireland but also across Europe or the US?
  • Do they have a good credit record?
  • Are they under financial stress?
  • Are their previous directorships above board?

This isn’t an exhaustive list and leaves the hiring company with the issue of how they complete background checks for any potential hires before submitting an application and how to do so in a timely fashion.

Firms are expected to show that they have carried out effective due diligence using documentary evidence and clear assessment criteria that have been fairly and objectively applied. The process for this will need to be documented and agreed at board level.

The company must also ensure that it has an ongoing audit process to ensure that its employees remain compliant.

Vetting staff to the level required by the Fitness and Probity regime is a specialist job and the onus is on the employer to ensure that they have complied with the legislation. Alongside this the process will collect some sensitive data and so must be secure.

To enable employers to carry out efficient pre-employment screening, Checkback have designed an online vetting service in concert with the Irish Central Bank. Our screening service ensures that the company remains compliant with Fitness and Probity regulations but also ensures that the HR department remain in control.

We provide client specific online and client organisation branded forms to allow collection of all of the candidate information. Our system allows HR staff to enter details into our bespoke portal and monitor the progress of the checks. We carry out all of the tests required by the regulations including European Criminal Record Checks, professional association and qualification checks, consumer credit stress tests, CV evaluation and a suite of Anti- Fraud Checks which are the foundation of this standard.

All of our systems are designed with best in class security in mind and we are able to help employers through the process all the way.

Call Checkback now to find out how we can help you ease your Fitness and Probity burden. To find out more about cost of this service you can email Checkbacks General Manager at Joey.lyons@checkback.ie or call us on +35315241361 or download our brochure here: Fitness Probity brochure _2013_