This article touched upon the introduction of new products with some more details, in a complement to my previous article as of April 2013.
In the last article that I wrote about this subject, I referred to the closing of deals without a proper governance in place, which is becoming less usual due to the increasing regulatory demands. This governance has to do with proper documentation, involvement of all key-personnel, evaluation of minimum controls and data processsing systems, compliance to regulations, among other aspects.
I would like to focus now on the specific functioning of a key governance element, which is the New Products Committee (NPC). It should be preferrably composed of experienced people in the market and in the organization, each one with the right to a vote, representing all key areas enabling a sound discussion and an analysis of risks and processes.
The will be usually participants from several areas as e.g. Commercial Units, Treasury, Back Office, Middle Office, IT, Finance and Tax, Legal, Audit, Compliance, Risk Management, Marketing, CSR, etc.
The NPC should ideally be chaired by the CEO, but one Managing Director of the support areas will do, as for example Risk Management, Finance or even IT/Operations (CRO, CFO or CIO/COO).
The area who is sponsoring the new product should present a business case e.g. to the Board of Directors, who in turn should approve it for further analyisis by the NPC.