SEARS Update: What it means for NEDs and INEDs

What is the Senior Executive Accountability Regime (SEAR)?

SEAR was introduced under the Central Bank (Individual Accountability Framework) Act 2023.  It is part of a wider strategy by the Central Bank of Ireland (CBI) to enhance individual accountability in regulated financial services companies. The regime is designed to ensure that individuals in senior positions clearly understand and are held responsible for their roles and decisions.

Until now, SEAR has applied to certain executive roles in in-scope companies. From 1st July 2025, the scope of SEAR will expand to include Non-Executive-Directors (NEDs) and Independent Non-Executive-Directors (INEDs), marking a significant regulatory shift for Irish boardrooms.

Who is now in scope?

The inclusion of NEDs and INEDs means that all directors of in-scope companies will be personally accountable under SEAR. These include companies such as:

• Banks
• Insurance companies
• Investment companies
• Third-country branches operating in Ireland (e.g. US or Swiss banks with Irish branches).

The CBI has signalled that SEAR will apply to roles that materially influence the conduct of a company, regardless of whether they are executive or non-executive.

What are the core responsibilities?

Under SEAR, NEDs and INEDs will be required to:

• Clearly define their responsibilities through a Statements of Responsibility. This is a formal written document that:
  • Sets out the specific functions and duties assigned to the individual
  • Helps establish clear lines of accountability within the governance structure
  • Acts as a reference for both internal oversight and external regulatory review

This document must be maintained and updated to reflect any changes in roles or responsibilities, supporting transparency and regulatory clarity.

• Comply with Conduct Standards, including obligations of integrity, skill, care, and diligence
• Be part of a governance framework that supports clear lines of accountability and decision-making

The CBI has made it clear that non-executive roles are not exempt from scrutiny. The goal is to ensure that every individual who exercises significant influence within a firm is accountable for their conduct and decision-making.

Why this matters for boards

Boards and company secretaries should prioritise the following:

• Training: Many NEDs and INEDs may need briefings and tailored SEAR training.
• Governance documentation: Companies must update governance maps and role descriptions to reflect SEAR requirements.
• Accountability: Directors should understand the potential for personal regulatory consequences if duties are not clearly defined or fulfilled.

The CBI actively uses its enforcement powers across a wide range of regulatory breaches, with total sanctions exceeding €400 million since the regime began. With SEAR’s expansion, there is a clear shift toward greater individual accountability. INEDs should be aware of the emphasis on well-defined responsibilities and strong oversight, particularly where board decisions influence company conduct or governance gaps exist.

Preparing for the July 2025 Deadline

Key steps include:

• Reviewing board responsibilities and structures
• Implementing role-specific SEAR training for directors
• Updating risk and compliance frameworks to support the new requirements

The CBI has stated that proactive implementation will be viewed favourably in any future supervisory or enforcement actions.

Next Steps

If your board or leadership team needs support preparing for SEAR, including tailored workshops or gap analysis, contact Mary@upthink.works to arrange a consultation.