The SMF1 Chief Executive Function

SMF1 is the Senior Manager Function for the chief executive. The holder is responsible, under the immediate authority of the board, for carrying out the management of the firm’s business. Under the Senior Managers and Certification Regime, SMF1 applies at Core and Enhanced firms. At dual-regulated banks, building societies and insurers, it’s designated by the Prudential Regulation Authority.

SMF1 appointments are different from most chief executive hires. The candidate needs regulatory approval before they can start, the regulators often interview them, and once approved they carry personal accountability for the firm as a whole, alongside any Prescribed Responsibilities allocated to them. Our SMF1 guide explains the function in detail. This page is about appointing one.

What the Regulators Expect From a Chief Executive

• Ownership of the business model and the risks it creates, including for customers.
• Tone from the top: a culture that supports good conduct, open challenge and speaking up.
• Customer outcomes under the Consumer Duty, which the chief executive cannot delegate entirely to compliance. See our article on where Consumer Duty accountability sits.
• A capable senior team, with clear allocation of responsibilities across the Senior Managers.
• Adequate resourcing of the control functions, and respect for their independence.
• An open relationship with the regulators, including prompt disclosure of significant issues.

Permanent, Interim and Fractional Chief Executive Appointments

Permanent

Most SMF1 appointments are permanent. We recruit chief executives for growing firms, private equity-backed businesses, mutuals and subsidiaries of international groups, and for founders handing over day-to-day leadership.

Interim

Interim chief executives are used after an unexpected departure, during a regulatory crisis, or through a sale or restructuring. They need to be credible with the board and the regulators immediately. Where a Senior Manager leaves unexpectedly, the 12-week rule allows temporary cover, and since the April 2026 reforms the firm must submit an approval application within those 12 weeks if the person covering is to continue.

Fractional

Fractional chief executive roles are uncommon, but some very small firms appoint a part-time managing director, often alongside a founder who remains involved. The regulator will look closely at whether the arrangement gives the firm effective leadership. See fractional and interim SMF cover and our article on when fractional appointments work.

How We Run a Regulated Chief Executive Search

1. Brief against the Statement of Responsibilities. We start from what the new Regulated Chief Executive will actually be accountable for, including any Prescribed Responsibilities, not just the job title.
2. Direct, confidential search. Most strong candidates already hold roles and aren’t looking. We approach them discreetly, without naming your firm until the right point.
3. Fit and proper pre-assessment. Every candidate is tested against the fit and proper test before reaching your shortlist: prior approvals, regulatory history, directorships and financial soundness.
4. Shortlist and interview. Adrian Lawrence FCA interviews every shortlisted candidate personally. Our guide to interviewing an SMF candidate sets out the questions we use.
5. References and application. We start regulatory references early and support the approval application and Statement of Responsibilities.
6. Through approval to day one. We plan notice periods around the regulator’s timetable and stay involved until your new Senior Manager is in post.

What We Look For in SMF1 Candidates

Regulated Leadership Experience

The regulators want evidence that the candidate can run a regulated business, not just a successful one. Previous experience as a Senior Manager, or in a senior executive role at a regulated firm, strengthens the application considerably.

The Right Scale and Complexity

A chief executive who ran a small Core firm may not be ready for an Enhanced firm’s governance and Prescribed Responsibilities, and a large-bank executive may struggle in a founder-led business. We match candidates to the firm’s actual scale and stage.

Sector Knowledge

Regulators expect the chief executive to understand the firm’s products, customers and risks. Candidates from outside the sector need to show how they’ll close the gap.

Culture and Conduct

We look at how candidates have shaped culture before: how they’ve handled bad news, supported control functions and dealt with high performers who broke the rules.

Regulator Readiness

For SMF1 roles, the regulators frequently interview candidates. We prepare them to discuss the firm’s business model, risks and their own responsibilities with confidence.

Common Situations

• Founder succession: a founder hands the SMF1 role to a professional chief executive while staying involved.
• Private equity ownership: investors appoint a new chief executive to deliver growth or integration. Our article on dual-regulated SMF hiring covers the added complexity at deposit takers.
• Regulatory pressure: a firm under supervisory scrutiny needs a chief executive the regulators will trust.
• New authorisation: a firm applying for authorisation needs a chief executive who can carry the application. See SMF authorisation support.
• UK subsidiaries of overseas groups: the UK chief executive must genuinely control the UK business. See overseas firms and UK branches.

Working With Exec Capital

For chief executive and C-suite search at larger regulated firms, where the role is as much about strategy and leadership as regulatory accountability, Exec Capital, a sister practice of SMF Capital, runs FCA-regulated executive search. SMF Capital leads where the regulatory approval and SMF accountability are central to the appointment, and the two practices work together on searches that need both.

Timing and Approval

SMF1 appointments usually take the longest of any Senior Manager search. Candidates often have notice periods of six months, the regulators can take up to three months to decide a complete application, and interviews are common. Firms should plan succession well in advance and consider interim leadership if needed. Our SMF appointment timeline sets out the stages.

Other Senior Manager Roles We Recruit

SMF Capital recruits across every Senior Manager Function. Alongside this role, we have dedicated pages for Compliance Officer (SMF16), MLRO (SMF17), Chief Risk Officer (SMF4), Chair and Committee Chairs (SMF9–SMF14) and Chief Operating Officer (SMF24), and designation guides to every other SMF. We also run sector-specific searches for wealth managers, investment managers, consumer credit firms, insurers and MGAs, banks and building societies, payments and fintech firms and crypto-asset firms, and location searches in London, Birmingham and Bristol. Candidates can see every current role on our SMF jobs board.

Frequently Asked Questions

Does the chief executive always hold SMF1?

At Core and Enhanced firms, the person performing the chief executive role holds SMF1. Some firms structured differently, such as partnerships, may allocate responsibilities through other functions.

Can a founder remain involved after a new CEO is appointed?

Yes. Founders often become executive chairs or non-executive directors. The allocation of responsibilities between them needs to be clear, and any Senior Manager Functions they hold need approval.

Will the regulator interview our preferred candidate?

It’s common for SMF1 roles, particularly at larger and dual-regulated firms. We prepare candidates for it.

How far ahead should we plan CEO succession?

Ideally a year or more for a planned succession, given notice periods and approval. For unexpected departures, interim cover under the 12-week rule may be needed.