The FSA contended that it was a serious flaw to have virtually overlapping membership of two Executive Committees in the business, the Management Committee and the Risk Committee. The tribunal did not accept this, noting that one of the expert witnesses in the case had indicated that the overlap could be a strength rather than a weakness, as it could substantially mitigate the risk that uncertainty over each Committee’s role would lead to important matters being covered by neither committee. Firms will want to consider carefully the composition of senior level committees in the light of this decision:

The tribunal carefully reviewed all the minutes of the various executive committees to examine the role that Mr Pottage played as Chairman and how active he was in raising and resolving issues. Members of committees (especially the Chairman) should ensure that proper and full minutes are taken of meetings, taking into account that these could come under forensic scrutiny.

The tribunal carefully reviewed the anticipated and actual scope of Mr Pottage's role, as well as his own understanding and expectations of the role. Documents such as objectives, job descriptions and role profiles will therefore be crucial. Furthermore, if the FSA interviews an individual as part of the FSA approved person process prior to them taking up the role, then any statements made during the interview in terms of expectations or performance of the role could be taken into account in subsequent enforcement action. An individual taking on a senior operational role will be expected to review within a reasonable period the fitness for purpose of systems and controls, management information etc, and have regard to any warning signals or "red flags". In the Pottage case, the tribunal considered that as CEO he should have conducted an initial review within two to three months. The tribunal accepted that it was reasonable for Mr Pottage to have relied on the advice of senior risk, compliance and legal professionals reporting to him, and he could not be expected to review and overhaul the systems and controls by himself.

Mr Thornberry delegated all responsibility for client money to a compliance manager, who was responsible for all the various duties, including general support, maintaining records, monitoring and training. This involved a concentration of duties, posing an increased concentration of risk of fraud, mistakes and client loss. (In fact there were no client money losses in this case.) The FSA recognised that it is not always possible in a small firm to achieve a full division of duties, but considered that the firm had not got it right in this case.

The FSA also noted that whilst the firm had at one time engaged external compliance consultants, they had decided to reduce expenditure on external consultants, and between 2007 and 2011 there were no external advisers providing compliance oversight of the firm’s compliance with the client money rules. The lesson here is not that external consultants must be engaged, but that suitable internal arrangements must be made if they are not.