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 members²⁰ of the management body in its supervisory function should be actively involved in committees.

²⁰ 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 (EU) 2013/36 and Directive (EU) 2014/65

Where committees have to be set up in accordance with Directive (EU) 2019/2034 or national law, as a general principle they should be composed as a general principle of at least three members and have at least one independent member, taking into account the criteria set out in Title I of these guidelines and the joint EBA and ESMA guidelines on the assessment of the suitability of members of the management body and key function holders. Where there is not a sufficient number of members within the management body in its supervisory function to ensure a sound composition of committees as set out in this section, the tasks of the committee may be delegated to one member of the management body in its supervisory function, who is supported as appropriate by staff. Committees may be composed of the same group of members, taking into account the criteria set out in Title I and the number of independent members of the management body in its supervisory function alongside the specific experience, knowledge and skills that are individually or collectively required for the committees. The reasoning for the composition of committees should be documented.

The risk committee should be composed of non-executive members of the management body in its supervisory function of the investment firm concerned. The remuneration committee should be composed in accordance with Section 2.3 of the EBA guidelines on sound remuneration policies²¹ .

²¹ EBA guidelines on sound remuneration policies under Article 34 (3) of Directive (EU) 2019/2034

The risk committee should be chaired, where possible, by an independent member. Members of the risk committee should have, individually and collectively, appropriate knowledge, skills and expertise concerning, respectively, the selection process and suitability requirements as well as risk management and control practices. In all investment firms, the chair of the risk committee should, where possible, neither be the chair of the management body nor the chair of any other committee.