8. Reputation, honesty and integrity

A member of the management body should be deemed to be of good repute and of honesty and integrity if there are no objective and demonstrable grounds to suggest otherwise, in particular taking into account the relevant available information on the factors or situations listed in paragraphs 73 to 77. The assessment of reputation, honesty and integrity should also consider the impact of the cumulative effects of minor incidents on a member’s reputation.

Without prejudice to any fundamental rights, any relevant criminal or administrative records should be taken into account for the assessment of good repute, honesty and integrity, considering the type of conviction or indictment, the role of the individual involved, the penalty received, the phase of the judicial process reached and any rehabilitation measures that have taken effect. The surrounding circumstances, including mitigating factors, the seriousness of any relevant offence or administrative or supervisory action, the time elapsed since the offence, the member’s conduct since the offence or action, and the relevance of the offence or action to the member’s role should be considered. Any relevant criminal or administrative records should be taken into account considering periods of limitation in force in the national law.

Without prejudice to the presumption of innocence applicable to criminal proceedings, and other fundamental rights, the following factors should at least be considered in the assessment of reputation, honesty and integrity:

• a. convictions or ongoing prosecutions for a criminal offence, in particular:
• i. offences under the laws governing banking, financial, securities, insurance activities, or concerning securities markets or financial or payment instruments, including laws on money laundering and terrorism financing or any of the predicate offences to ML set out in Directive (EU) 2015/849, corruption, market manipulation, or insider dealing and usury;
• ii. offences of dishonesty, fraud or other financial crime;
• iii. tax offences, whether committed directly or indirectly, including through unlawful or banned dividend arbitrage schemes;
• iv. other offences under legislation relating to companies, bankruptcy, insolvency, or consumer protection;
• b. other relevant current or past findings and measures taken by any regulatory or professional body for non-compliance with any relevant provisions governing banking, financial, securities or insurance activities or any of the matters in paragraph
• (a) above.

Ongoing investigations should be taken into account when resulting from judicial or administrative procedures or other analogous regulatory investigations without prejudice to fundamental individual rights²³ . Other adverse reports with relevant, credible and reliable information (e.g. as part of whistleblowing procedures) should also be considered by institutions and competent authorities.

²³ In line with the European Convention on Human Rights and Charter of Fundamental Rights of the European Union: http://ec.europa.eu/justice/fundamental-rights/charter/index_en.htm

The following situations relating to the past and present business performance and financial soundness of a member of the management body should be considered, with regard to their potential impact on the member’s reputation, integrity and honesty:

• a. being a defaulting debtor (e.g. having negative records at a reliable credit bureau if available);
• b. financial and business performance of entities owned or directed by the member or in which the member had or has significant share or influence with special consideration given to any bankruptcy and winding-up proceedings and whether or not and how the member has contributed to the situation that led to the proceedings;
• c. declaration of personal bankruptcy; and
• d. without prejudice to the presumption of innocence, civil lawsuits, administrative or criminal proceedings, large investments or exposures and loans taken out, insofar as they can have a significant impact on the financial soundness of the member or entities owned or directed by him or her, or in which the member has a significant share.

A member of the management body should uphold high standards of integrity and honesty. At least the following factors should also be considered in the assessment of reputation, honesty and integrity:

• a. any evidence that the person has not been transparent, open and cooperative in his or her dealings with competent authorities;
• b. refusal, revocation, withdrawal or expulsion of any registration, authorisation, membership, or licence to carry out a trade, business, or profession;
• c. the reasons for any dismissal from employment or from any position of trust, fiduciary relationship, or similar situation, or for having been asked to resign from employment in such a position;
• d. disqualification by any relevant competent authority from acting as a member of the management body, including persons who effectively direct the business of an entity; and
• e. any other evidence or serious allegation based on relevant, credible and reliable information that suggests that the person acts in a manner that is not in line with high standards of conduct.