Ireland: CBI board effectiveness review for fund management companies

Why should I read this?

In April 2026, the Central Bank of Ireland published its Feedback Report on Board Effectiveness through the Lens of Diversity and Inclusion in the fund management company sector.  This is the first standalone diversity and inclusion review in this sector.  The review examines board composition, board evaluation, succession planning, strategic decision-making and broader diversity and inclusion practices.

The Central Bank found some positive practices.  But it concluded that more work is needed to embed diversity and inclusion into governance at board and senior leadership level.  The Central Bank expects all fund management companies to review the findings and examine their own governance processes.  It is following up directly with individual firms on specific concerns.

See our previous client briefings:

• Ireland: Investment Funds Update – Q1 2026 – Issue 2

What do I need to know about the CBI’s review?

Board composition and diversity

Firms showed varying levels of understanding of diversity and inclusion.  Good practices included charter memberships, board sponsorship and embedding diversity and inclusion into governance.  Board and SMT membership generally reflected diverse professional and educational backgrounds.  Some firms also used gender-neutral job descriptions and diverse interview panels to attract diverse senior candidates.

However, gaps were identified:

• Some firms focused only on observable characteristics such as gender and did not consider diversity of thought.
• Gender imbalances remain at board and SMT level.
• Some firms treated diversity and inclusion as a corporate social responsibility activity rather than a governance matter.
• Not all firms had diversity targets or metrics.
• Few firms had local diversity and inclusion reporting, board-level training or board-level sponsorship.

Independent non-executive directors

The review found an inconsistent approach to INEDs.  In most firms, an INED held the role of board chair.  This is in line with good practice.  However, several INEDs had been in place for more than ten years.

The Central Bank expects firms to assess director tenure regularly.  If an INED has been in place for a long time, firms must formally assess their independence at least once a year.

Board evaluation

All firms conducted annual board evaluations, but the depth varied.  Good practices included the use of board skills matrices and the inclusion of gender diversity in evaluations.  Areas for improvement included:

• Some firms relied only on self-assessment questionnaires without broader assessments such as skills gap analysis.
• Many evaluations used a simple yes/no format. This limited the usefulness of the results.
• Diversity and inclusion considerations were often absent from evaluations.

Succession planning

All firms had succession plans, but quality varied.  Good practices included comprehensive plans with named successors, time horizons and skills matrices.  One firm maintained a named panel of potential successors for INED roles.  Areas for improvement included:

• Some policies lacked detail on how succession plans influenced appointments.
• Diversity and inclusion considerations were largely absent.
• Some plans were out of date, lacked version control or did not assign responsibility.

Strategic decision-making

The Central Bank reviewed a strategic decision from each firm.  Some firms had well-documented procedures and diverse project teams.  However, the review also found:

• Some firms did not have a standalone decision-making policy.
• Key decisions were sometimes made outside formal board meetings without clear records.
• Board minutes often did not show the discussion, challenge or voting process.
• Most firms did not conduct post-decision reviews.

What should I do about board effectiveness?

Fund management companies should take the following steps:

• Review the report

Read the Central Bank’s findings and assess your governance processes against them.  If the Central Bank has raised specific concerns with your firm, address them promptly.

• Assess your board composition

Consider whether your board, SMT and board committees reflect diversity of thought, not just observable characteristics such as gender.  Set diversity targets and metrics.

• Strengthen your governance processes

Go beyond self-assessment questionnaires in board evaluations.  Include skills gap analysis and diversity and inclusion considerations.  Update succession plans and assign responsibility for keeping them current.

• Review your INED arrangements

Assess the tenure of your INEDs.  If any have been in place for a long time, carry out a formal independence assessment at least once a year.

• Review your decision-making processes

Ensure strategic decisions are documented, challenged and made through formal board processes.  Conduct post-decision reviews.

What else do I need to know about board effectiveness?

The Central Bank has previously conducted diversity and inclusion reviews in the banking and insurance sectors.  This is the first review in the fund management company sector.  The report includes details of good practices.  Firms can use these as a reference.

The Central Bank expects firms to evaluate their arrangements on an ongoing basis.  This is not a one-off exercise.  Firms should embed diversity and inclusion into their governance as a matter of course.

How Eversheds Sutherland can help

Eversheds Sutherland advises fund management companies and other regulated firms on governance, board effectiveness and regulatory compliance in Ireland.  We help firms review their governance frameworks, assess board composition and develop action plans to address regulatory expectations on diversity and inclusion.

Our Dublin team has deep experience advising on Central Bank requirements for fund management companies, including the Fund Management Companies Guidance and related supervisory expectations.

Trevor Dolan, Partner, Funds and Asset Management at Eversheds Sutherland, Dublin, comments:

“The Central Bank’s message is clear.  Fund management companies need to move beyond treating diversity and inclusion as a box-ticking exercise.  The report highlights real gaps in board composition, evaluation and succession planning.  Firms that take a structured approach to embedding diversity and inclusion into their governance will be better placed to meet the Central Bank’s expectations.”