4. Sufficient time commitment of a member of the management body

Institutions should assess whether or not a member of the management body is able to commit sufficient time to performing his or her functions and responsibilities including understanding the business of the institution, its main risks and the implications of the business and the risk strategy. Where the person holds a mandate in a significant CRD institution, this should include an assessment to ensure that the limitation of the maximum number of directorships under Article 91(3) of Directive 2013/36/EU or Article 9(2) of Directive 2014/65/EU, as applicable, is being complied with.

Members should also be able to fulfil their duties in periods of particularly increased activity, such as a restructuring, a relocation of the institution, an acquisition, a merger, a takeover or a crisis situation, or as a result of some major difficulty with one or more of its operations, taking into account that in such periods a higher level of time commitment than in normal periods may be required.

In the assessment of sufficient time commitment of a member, institutions should take at least the following into account:

• a. the number of directorships in financial and non-financial companies held by that member at the same time, taking into account possible synergies when they are held within the same group, including when acting on behalf of a legal person or as an alternate of a member of the management body;
• b. the size, nature, scope and complexity of the activities of the entity where the member holds a directorship and, in particular, whether or not the entity is a non-EU entity;
• c. the member’s geographical presence and the travel time required for the role;
• d. the number of meetings scheduled for the management body;
• e. the directorships in organisations which do not pursue predominantly commercial objectives held by that member at the same time;
• f. any necessary meetings to be held, in particular, with competent authorities or other internal or external stakeholders outside the management body’s formal meeting schedule;
• g. the nature of the specific position and the responsibilities of the member, including specific roles such as CEO, chairperson, or chair or member of a committee, whether the member holds an executive or non-executive position, and the need of that member to attend meetings in the companies listed in point (a) and in the institution;
• h. other external professional or political activities, and any other functions and relevant activities, both within and outside the financial sector and both within and outside the EU;
• i. the necessary induction and training;
• j. any other relevant duties of the member that institutions consider to be necessary to take into account when carrying out the assessment of sufficient time commitment of a member; and
• k. available relevant benchmarking on time commitment, including the benchmarking provided by the EBA²⁰ .

²⁰ Figures for the year 2015 are included as an Annex to the impact assessment of these Guidelines.

Institutions should record in writing the roles, duties and required capabilities of the various positions within the management body and the expected time commitment required for each position, also taking into account the need to devote sufficient time for induction and training. For this purpose, smaller and less complex institutions may differentiate the expected time commitment only between executive and non-executive directorships.

A member of the management body should be made aware of the expected time commitment required to spend on his or her duties. Institutions may require the member to confirm that he or she can devote that amount of time to the role.

Institutions should monitor whether the members of the management body commit sufficient time to performing their functions. Preparation for meetings, attendance and the active involvement of members in management body meetings are all indicators of time commitment.

An institution should also consider the impact of any long-term absences of members of the management body in its assessment of the sufficient time commitment of other individual members of the management body.

Institutions should keep records of all external professional and political positions held by the members of the management body. Such records should be updated whenever a member notifies the institution of a change and when such changes come otherwise to the attention of the institution. Where changes to such positions occur that may reduce the ability of a member of the management body to commit sufficient time to performing his or her function, the institution should re- assess the member’s ability to respect the required time commitment for his or her position.