5.2 Composition of committees

All committees should be chaired by a non-executive member of the management body who is able to exercise objective judgement.

Independent members²⁵ of the management body in its supervisory function should be actively involved in committees.

²⁵ As defined in Section 9.3 of the joint ESMA and EBA guidelines on the assessment of the suitability of members of the management body and key function holders under Directive 2013/36/EU and Directive 2014/65/EU.

Where committees have to be set up in accordance with Directive 2013/36/EU or national law, they should be composed of at least three members.

Institutions should ensure, taking into account the size of the management body and the number of independent members of the management body in its supervisory function, that committees are not composed of the same group of members that forms another committee.

Institutions should consider the occasional rotation of chairs and members of committees, taking into account the specific experience, knowledge and skills that are individually or collectively required for those committees.

The risk and nomination committees should be composed of non-executive members of the management body in its supervisory function of the institution concerned. The audit committee should be composed in accordance with Article 39 of Directive 2006/43/EC²⁶ . The remuneration committee should be composed in accordance with the EBA guidelines on sound remuneration policies²⁷ .

²⁶ Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC (OJ L 157, 9.6.2006, p. 87) as amended.

²⁷ EBA guidelines on sound remuneration policies under Directive 2013/36/EU.

Members of the remuneration committee should have, individually and collectively, appropriate knowledge, skills and experience to assess the impact of risks on remuneration incentives taking into account the assessment of the risk committee as specified under paragraph 64.

In G-SIIs and O-SIIs, the nomination committee should include a sufficient number of members who are independent and be chaired by an independent member. In other significant institutions determined by competent authorities or national law, the nomination committee should include a sufficient number of members who are independent, where possible; such institutions may also consider as a good practice having a chair of the nomination committee who is independent.

Members of the nomination committee should have, individually and collectively, appropriate knowledge, skills and expertise concerning the selection process and suitability requirements as set out under Directive 2013/36/EU.

In G-SIIs and O-SIIs, the risk committee should include a majority of members who are independent. In G-SIIs and O-SIIs the chair of the risk committee should be an independent member. In other significant institutions determined by competent authorities or national law, the risk committee should include a sufficient number of members who are independent, where possible, and the risk committee should be chaired, where possible, by an independent member. In all institutions, the chair of the risk committee should be neither the chair of the management body nor the chair of any other committee.

Members of the risk committee should have, individually and collectively, appropriate knowledge, skills and expertise concerning risk management and control practices.