Bank of England - Director of the Court
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Her Majesty The Queen has been pleased to approve, under the Bank of England
Act 1998, as amended by the Banking Act 2009, the appointment of John Morrison
Stewart as a new Director of the Court of the Bank of England. This appointment
is for a period of three years, starting on 1st December 2009.
This appointment is being made following an open competition to identify a
new non-executive Director of Court, and has been made in accordance with the
Commissioner for Public Appointments Code of Practice. John Stewart joins seven
existing Directors of Court, the Governor and the Deputy Governors, together
with the Chairman of Court, Sir David Lees.
The Banking Act 2009 introduced a number of important reforms to the
governance of the Bank of England. These included: giving the Bank of England a
statutory objective to contribute to protecting and enhancing the stability of
the financial systems of the United Kingdom; changing the governance structure
of the Bank of England to support these new responsibilities, including the
creation of a new Financial Stability Committee; and modernising the operations
of Court, reducing its maximum size from 19 down to 12 members, of whom a
majority must be non-executive. These reforms were implemented on 1 June 2009.
Sir David Lees, Chairman of Court, has confirmed that John Stewart will be
appointed to the Financial Stability Committee.
In announcing the new Director of Court, the Chancellor of the Exchequer,
Alistair Darling said:
“I am delighted to announce the appointment of John Stewart as a
non-executive director of the Bank of England. John will bring the benefits of
his many years of experience in the banking sector to Court. He will work with
the Directors, Governors and Sir David Lees to implement the reforms to the
governance of the Bank of England and ensure that it continues to fulfil its
existing responsibilities effectively.”
The Chairman of the Court of the Bank of England, Sir David Lees, said:
“I very much look forward to John Stewart joining the Court of the Bank and
the Financial Stability Committee, and working with the other members of Court
towards the achievement of the Bank’s strategic objectives.”
1. The Bank of England is the central bank of the United Kingdom. Its core
purposes are to ensure monetary stability and to contribute to financial
stability. The Bank of England is governed by a Board known as the Court. The
role of the Court is to manage the Bank’s affairs, other than the formulation of
monetary policy, which is the responsibility of the Monetary Policy Committee.
Court’s responsibilities include determining the Bank of England’s objectives
and strategy, ensuring the effective discharge of the Bank’s functions and the
most efficient use of its resources.
2. The appointment of non-executive directors to the Court of the Bank of
England are made by Her Majesty the Queen on the advice of the Prime Minister
and the Chancellor of the Exchequer. Appointment as a non-executive director of
Court is normally for three years.
3. This appointment has been made in accordance with the Commissioner for
Public Appointments Code of Practice. The appointment is made on merit and
political activity plays no part in the selection process. However, in
accordance with the original Nolan recommendations, there is a requirement for
appointees’ political activity (if any declared) to be made public. John Stewart
has confirmed that he has not engaged in any political activity in the last five
years and holds no other ministerial public appointments.
4. Under the Bank of England Act 1998, a person is disqualified from being a
non executive director if he or she is (a) Minister of the Crown; (b) serving in
a Government department in employment of which remuneration is payable out of
money provided by Parliament; and (c) a servant of the Bank of England.
5. Non-executive directors receive remuneration of £15,000 a year.
Non-executive directors that also chair a sub-committee of Court receive
remuneration of £20,000 a year. The Chair of Court receives remuneration of
£30,000 a year. In addition, all non-executive directors receive payments to
cover expenses. The average time commitment required of a non-executive director
of Court is estimated to be 2-3 days per month but this may vary.
6. The Banking Act 2009 introduced a number of reforms to the Bank of
- Giving the Bank of England a statutory objective to contribute to
protecting and enhancing the stability of the financial systems of the United
- Changing the governance structure of the Bank of England to support these
new responsibilities, including the creation of a new Financial Stability
- Modernising the operations of Court, including by reducing its maximum
size from 19 down to 12 members (of whom a majority must be non-executive),
formalising the current arrangements whereby a non-executive director chairs
the Court of the Bank of England and to change the minimum number of meetings
of Court (to 7 in each calendar year).
7. The Banking Act 2009 amended the Bank of England Act 1998 to introduce a
new Financial Stability Committee, as a sub-committee of Court. The membership
of the committee includes the Governor of the Bank, who chairs the Committee,
the Deputy Governors of the Bank, and 4 directors of the Bank, appointed by the
Chair of Court.
8. The functions of the new Financial Stability Committee are defined in the
Bank of England Act 1998, as amended by the Banking Act 2009. They are:
- To make recommendations to the court of directors, which they shall
consider, about the nature and implementation of the Bank’s strategy in
relation to the Financial Stability Objective,
- To give advice about whether and how the Bank should act in respect of an
institution, where the issue appears to the Committee to be relevant to the
Financial Stability Objective,
- In particular, to give advice about whether and how the Bank should use
stabilisation powers under Part 1 of the Banking Act 2009 in particular cases,
- To monitor the Bank’s use of the stabilisation powers,
- To monitor the Bank’s exercise of its functions under Part 5 of the
Banking Act 2009 (inter-bank payment systems), and
- Any other functions delegated to the Committee by the court of directors
for the purpose of pursuing the Financial Stability Objective
9. John Morrison Stewart served as Chief Executive Officer of National
Australia Bank Limited from February 2004 to January 2009. He was Managing
Director and Chief Executive Officer of National Australia Bank of Europe at
National Australia Bank Limited from 2003 to 2004. Mr. Stewart previously served
as Deputy Group Chief Executive of Barclays PLC from 2000 to 2003, where he
headed the Barclays Group Personal Financial Services operations and the
Barclays Private Client operations. He served as Group Chief Executive Officer
of Woolwich PLC from 1996 to 2000.
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Article Published/Sorted/Amended on Scopulus 2009-11-13 11:45:18 in Economic Articles