After a successful spring and summer season, the ‘Challenges for Bank Board Members’ series resumed on 2nd November with James H. Freis, Jr. (Chairman, CRINDATA) and Bernd Rummel (Senior Policy Expert, European Banking Authority) discussing: ‘Third party outsourcing risk: the role for board oversight’.
Elena Carletti, Professor of Finance at Bocconi University, and founding director of the Florence School of Banking and Finance, chaired the event which also saw the participation of the audience in a Q&A session.
James Freis Jr. kicked-off the seminar by defining outsourcing as the delegation by an institution of a service or an activity to a third party. He underlined the importance for boards to oversee the process and anticipate the potential repercussions on the bank of outsourcing activities to third parties. He then followed by mentioning best practices for bank board members to manage soundly the operational risks.
Bernd Rummel reviewed the regulatory and practical aspects of outsourcing and suboutsourcing and presented the European Banking Authority current guidelines in the matter. His intervention focused mostly on the legal expectations of the bank board member role.
During the Q&A session, Elena Carletti enquired further on the role and responsibility of the board, and the amount of technical knowledge non-executive directors should have.
In conclusion, James Freis summed-up the webinar by saying: ‘You can outsource services and functions, but you cannot outsource responsibilities!’
You can find the recording of the webinar and the presentation slides of the speakers here.