Statements of Responsibility (SoRs) and What Boards Should Consider Before Appointing an SMF

Statements of Responsibilities — almost always shortened to SoRs — are among the most consequential documents in any board-level appointment at an FCA-regulated firm. An SoR sets out what an individual Senior Manager Function (SMF) holder is personally accountable for. It is what the regulator looks at to understand how the firm has allocated governance. It is what the candidate will be held to under the Conduct Rules and the duty of responsibility, and, if something goes wrong, it is the document the FCA or PRA will trace accountability back through.

And yet SoRs are routinely drafted late in the appointment process, treated as a paperwork exercise after the candidate has been chosen, and signed off without the careful overlap analysis the regime expects. The result is appointments where the SoR does not match the role the person will actually do, accountability gaps that surface during supervisory scrutiny and, at worst, a senior manager exposed to enforcement for a failure that fell into an overlap with another SMF.

This guide sets out what an SoR is, what changed in the approval rules in April 2026, the overlap problem at committee chair level, and the questions boards should work through before approving any SMF appointment — including the fractional and part-time compliance appointments that smaller firms increasingly rely on.

What a Statement of Responsibility actually is

A Statement of Responsibilities is a document the firm prepares for each person it proposes to appoint to a Senior Manager Function. It sets out the specific responsibilities of that senior manager: the responsibilities inherent in the function itself, any prescribed responsibilities the firm has allocated to them (where the firm’s SMCR category requires prescribed responsibilities to be allocated), and any further responsibilities the firm has chosen to give them.

The SoR sits alongside two related documents.

The Management Responsibilities Map (MRM). Required of Enhanced firms under the FCA regime and of banks and insurers under the PRA regime, the MRM sets out how responsibilities across the whole firm are allocated between the SMF holders, together with the firm’s governance and reporting lines. It is the firm’s governance map, and supervisors use it to check that every material activity has someone accountable for it.

The SoR. Where the MRM is the firm-level view, the SoR is the personal view of one senior manager’s accountability. It is submitted to the regulator with the approval application, and the senior manager signs it to confirm they understand and accept the responsibilities allocated to them.

Form A. The approval application itself is made on Form A through the FCA’s Connect system, which also handles applications for dual-regulated firms. The SoR travels with the Form A and tells the regulator exactly what the candidate is being appointed to do.

The three documents work as a set. The MRM allocates responsibilities across the firm, the SoR records each individual’s share, and the Form A presents the candidate for approval. If any one of them is poorly drafted or inconsistent with the others, the approval becomes harder than it needs to be and the firm stores up difficulty for later. Our wider guide to Senior Managers Regime board recruitment covers how these documents fit into the full appointment process.

What has changed in the approval rules

The FCA’s PS26/6 and the PRA’s matching policy statement PS12/26 completed the first phase of the SMCR review. Most of the changes took effect on 24 April 2026. None of them removes the SoR, but several change the timetable a board is working to when it makes an appointment:

• The 12-week rule is now a submission deadline. Where someone steps into an SMF role to cover an unforeseen absence, the firm has 12 weeks to submit the application, rather than 12 weeks to obtain approval. The regulator then has its statutory period to decide. The cover arrangement is easier to manage, but the SoR still has to be ready when the application goes in.
• Criminal record checks last longer. A check is now valid for six months rather than three, and a fresh check is not needed for a move into another SMF within the same firm or group.
• Regulatory references should arrive faster. Firms are now expected to provide a regulatory reference within four weeks of a request, down from six.
• SoR and MRM updates are batched. Firms must still keep the SoR and MRM current when responsibilities change significantly, but revised versions can now be submitted as a single collated update over a six-month period rather than every time a change is made.

Alongside the rule changes, the FCA has set itself a target of deciding at least half of senior manager applications in 35 days. That is a target, not a promise for any individual case. An application with an unclear SoR, an inconsistent MRM or gaps in the candidate’s competence evidence is exactly the kind that attracts follow-up questions and falls outside the faster group. The quicker the regulator aims to move, the more a well-drafted SoR is worth.

The overlap problem at committee chair level

The most common practical problem with SoRs is overlap between responsibilities at committee chair level. The board of a larger regulated firm usually includes several committee chairs — SMF10 (Chair of the Risk Committee), SMF11 (Chair of the Audit Committee), SMF12 (Chair of the Remuneration Committee) and SMF13 (Chair of the Nomination Committee) — whose responsibilities interact with each other and with the executive.

Consider the appointment of a new SMF10. The SoR might include oversight of the firm’s risk management framework, including risk appetite, risk strategy and risk culture. That reads cleanly in isolation. But the SMF4 (Chief Risk Officer) is also accountable for the risk management framework, and the SMF11 is accountable for overseeing the internal control framework, which meets the risk framework at several points.

Where exactly does SMF10 accountability end and SMF11 accountability begin? Where does the non-executive oversight role of the SMF10 stop and the executive ownership of the SMF4 start? If those boundaries are not drawn clearly in the SoRs, two problems follow.

First, the approval application is harder. Where a proposed SoR overlaps in unclear ways with existing SMFs at the firm, the regulator is likely to ask questions, and each round of questions adds time to the decision.

Second, if something goes wrong later — a risk event, a control failure, a customer harm issue — the regulator will look at the SoRs to identify who was accountable. Where they overlap, more than one senior manager may find themselves under scrutiny, and the person whose SoR most closely describes the failure point may be the one who has to explain it, regardless of who was doing the work. SoR drafting is, in practice, enforcement risk drafting.

The fix is simple in principle and careful in practice. Each SoR should be drafted alongside the SoRs of the related senior managers, with explicit attention to where one person’s accountability ends and another’s begins. The draft should be reviewed by someone who understands how the regulator reads SoRs in an enforcement context — usually a regulatory lawyer or an experienced compliance leader — and not only by the firm’s in-house legal team.

Drafting the SoR before the candidate is selected

The traditional sequence at many regulated firms is: identify the candidate, agree the appointment, then draft the SoR. That sequence is the wrong way round.

The better sequence is: draft the SoR first, design the candidate brief around what the SoR requires, then run the search to find the person whose experience and competence map cleanly to it. The SoR should drive the search, not the other way round. There are three reasons for this.

First, the SoR is the document the regulator will assess the candidate against. Approval turns on whether the regulator is satisfied the candidate is fit and proper, and competent, for the specific responsibilities allocated in the SoR. If the SoR is drafted after selection, there is a temptation to tailor it to the person — narrowing scope to fit their experience, or widening it to make use of their strengths. Both moves compromise the integrity of the firm’s governance allocation.

Second, drafting first surfaces the overlap question early. If the new role overlaps awkwardly with existing SMFs, that should be resolved before the search starts. Resolving it may mean redrawing other SoRs at the firm, which is far easier to do before the new person arrives than after.

Third, drafting first gives the search firm a precise brief. A clean SoR says exactly what the candidate must be able to do, what their Conduct Rule accountability will be and what the regulator will assess them against. A vague SoR produces a vague brief, and a vague brief produces a vague shortlist.

In practice, the Chair, the Chief Risk Officer where relevant, and the firm’s legal or compliance lead work through the SoR for the new role with the search firm before the search starts. The SoR is signed off as a working draft, the search runs against it, and it is finalised — with any minor adjustments — once the preferred candidate is identified. This is how we approach compliance and risk recruitment at regulated firms: the SoR is agreed in draft before candidates are approached.

How the SoR shapes the candidate brief

A well-drafted SoR translates directly into a candidate brief in three ways.

It defines competence requirements. Each accountability area in the SoR maps to a competence the candidate must be able to evidence. Responsibility for overseeing the ICAAP or ICARA process means the candidate must understand capital and liquidity adequacy at the firm’s level of permission. Responsibility for Consumer Duty oversight at board level means the candidate must understand the Duty and how it works in practice in the relevant sector. Vague SoR language produces vague competence requirements, which produces candidates who look right on paper and struggle in the role.

It defines sector experience requirements. The SoR makes clear what kind of firm the candidate needs to have worked in. Responsibility for oversight of investment management activity means prior experience in investment management, not just general regulated-firm experience. The SoR is the test of whether a candidate’s sector background transfers.

It defines accountability tolerance. The SoR shows the level of personal accountability the candidate is signing up to. Experienced SMF candidates increasingly ask to see the SoR before they accept an offer, not after. Firms that share the draft SoR during the offer stage, rather than as a formality after acceptance, find candidates engage more seriously with the appointment and are less likely to withdraw late.

The same logic applies at every level of the senior management population, from the executive director (SMF3) appointments where SoR scope is often broadest, to committee chairs and heads of control functions.

Common SoR mistakes that boards make

Several drafting patterns recur often enough at regulated firms to be worth flagging.

The cut-and-paste SoR. The outgoing SMF holder’s SoR is handed to the incoming holder unchanged. But the new person may have different experience, different strengths and different capacity. The SoR that worked for the predecessor may not be the right one for the new appointment.

The catch-all SoR. The SoR includes language such as “and such other responsibilities as the Chair may from time to time allocate”. Open-ended drafting suggests the firm does not know what the senior manager is accountable for, which invites questions. Candidates read it as unbounded personal risk, which can put strong people off.

The aspirational SoR. The SoR describes what the firm would like the SMF holder to do eventually, rather than what they will actually be doing in their first six to twelve months. The senior manager is then held to accountability they cannot yet deliver. The SoR should describe the role as it will be, and be updated as it grows.

The overlapping SoR. Covered above, and the failure most likely to cause problems later.

The unread SoR. The candidate signs without reading the SoR in detail, often during the offer stage when other documents are competing for attention, and is then held to accountability they never properly absorbed. Strong candidates want a structured conversation about the SoR before signing, with their own legal advice where appropriate.

The stale SoR. Responsibilities drift after appointment — a new business line, a departed colleague’s duties absorbed informally — and the SoR is never revisited. The batched six-month update cycle makes this easier to manage, but it does not remove the obligation to keep the document accurate when responsibilities change significantly.

The Management Responsibilities Map context

For Enhanced firms, and for banks and insurers, the SoR sits inside a Management Responsibilities Map that is itself a regulator-facing document. The MRM should be reviewed whenever an SMF appointment is being made, because the new appointment changes how responsibilities are allocated across the firm.

Questions to work through before a new SMF appointment:

• Are there responsibilities held by the outgoing SMF that should move to a different SMF rather than transfer to the incoming hire? A senior manager transition is a chance to rebalance accountability, not just swap a name on an existing SoR.
• Are there responsibilities not currently allocated to anyone that should be allocated as part of this appointment? Regulatory expectations move, and an MRM that worked two years ago may now have gaps.
• Are there responsibilities currently overlapping between two SMFs that should be cleaned up now? The new appointment is the moment to fix problems that have built up over time.
• Does the MRM reflect how decisions are really taken, including group arrangements and any outsourced or part-time roles? A map that describes the organisation chart rather than the actual decision-making will not survive supervisory scrutiny.

Firms that treat a senior appointment as a chance to refresh the MRM, rather than an isolated event that only needs a new SoR, get better governance outcomes over the long run. The same thinking applies when a firm is rebuilding a board more widely through board of directors recruitment: the map should be redrawn before the seats are filled.

What the Phase 2 proposals could mean for SoRs

On 22 October 2026 the FCA published CP26/37 and the PRA published CP14/26, setting out the second phase of the SMCR review. Both consultations close on 22 January 2027. These are proposals, not final rules, and boards should plan on the current rules until policy statements are published.

The points most relevant to SoRs and board appointments are:

• Some SMFs would move from approval to notification. The FCA proposes that roles including the Head of Internal Audit (SMF5) and the committee chairs and Senior Independent Director (SMF10 to SMF15) would be notified rather than pre-approved, and the PRA proposes a similar shift for a substantial share of its SMF roles.
• Updated SoRs and MRMs would no longer be routinely submitted. Firms would still have to keep them current and produce them on request.
• Very small firms could be relieved of the documents. Where one person performs every SMF role, the proposals would remove the need for an SoR and MRM.

None of this would make the SoR less important to the appointment itself. A notified committee chair would still hold a Senior Manager Function, still be subject to the Senior Manager Conduct Rules and still carry the accountability the SoR describes. If anything, moving to notification shifts more of the quality control onto the firm: without a regulator reviewing the application in advance, the board is the main check on whether the SoR is clear and the candidate fits it.

SoRs for fractional and combined compliance roles

Many smaller FCA-regulated firms — brokers, IFAs, payment and e-money firms, consumer credit businesses — do not need a full-time Head of Compliance or MLRO. They appoint a fractional compliance officer to hold SMF16 one or two days a week, a fractional MLRO to hold SMF17, or one experienced individual holding both functions. The SoR matters just as much in these appointments, and it raises some specific questions.

Is the scope realistic for the time available? An SoR written for a full-time compliance director, given to someone working one day a week, is an aspirational SoR by another name. The document should reflect what the individual will own, what support sits beneath them and how the firm will escalate issues between their working days.

Where one person holds SMF16 and SMF17, are both sets of responsibilities clear? The SoR is prepared for the individual, so it needs to set out the compliance oversight responsibilities and the money laundering reporting responsibilities distinctly, rather than blurring them into a single line about “regulatory matters”.

How does the role relate to the CEO and the board? In a small firm the SMF1 or SMF3 often absorbs everything nobody else holds. The SoR for a fractional SMF16 should make clear which matters stay with the executive, so that the part-time appointment is not treated as the accountable person for decisions they are not in the room for.

Candidates for these roles typically hold several mandates at once, and the better ones read the SoR closely before agreeing to take on personal accountability. A well-scoped document is often what persuades a strong candidate to accept. For permanent appointments we also run full SMF16 Head of Compliance recruitment, where the same drafting discipline applies.

How Exec Capital uses SoRs in the search process

Exec Capital recruits senior appointments at FCA-regulated firms, on permanent, interim and fractional terms, and SoR considerations are built into the search from the first conversation. Every search is run by our specialist team, with Adrian Lawrence FCA overseeing each mandate. Adrian is an ICAEW Fellow whose own regulated professional background gives the team a practical frame of reference for the accountability SMF roles carry.

Our approach to SoR work in a senior search has three elements.

We engage with the SoR before the brief is finalised. Where the firm has not yet drafted the SoR, we work with the Chair, the legal or compliance lead and, where appropriate, the firm’s regulatory lawyers so that a working draft is in place before the search starts. Where the firm has a draft, we read it carefully and flag any overlap, gap or scope issue before the candidate brief is agreed.

We use the SoR to define competence and experience requirements. The shortlist is built around what the SoR requires, not around generic seniority or sector labels. Candidates are assessed against the specific accountability areas in the SoR before they are presented to the firm.

We take candidates through the SoR before offer acceptance. Strong SMF candidates want a structured conversation about the SoR, the scope of their accountability, how the role relates to other SMFs and the support around it. We facilitate that conversation as part of the search, because candidates who fully understand the SoR before accepting are less likely to withdraw and more likely to succeed in the role.

Frequently asked questions

Is a Statement of Responsibilities still required for an SMF application?

Yes. Under the current rules the firm submits an SoR with the Form A approval application for each proposed senior manager, and keeps it up to date when their responsibilities change significantly.

How often do updated SoRs have to be submitted?

Since 24 April 2026, firms can submit revised SoRs and MRMs as one collated update covering a six-month period, rather than after each change. The Phase 2 consultations propose going further, so that updates are kept on file and produced on request.

Who should draft the SoR for a new appointment?

The firm owns the document. In practice the Chair, the legal or compliance lead and, for risk-related roles, the CRO should draft it, ideally with input from regulatory lawyers and the search firm before candidates are approached.

Do committee chairs still need FCA approval?

At present, yes, where the firm is required to have those functions. CP26/37 proposes moving SMF10 to SMF15 to a notification model, but that is a proposal under consultation until January 2027, not a rule in force.

Does a fractional SMF16 or SMF17 need an SoR?

Yes. A part-time senior manager holds the same function and the same personal accountability as a full-time one, so the SoR should reflect the scope of the role and the time and support available to deliver it.