Corporate Governance for Banks in Southeast Europe: Policy - IFC

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Policy Brief on Improving Corporate Governance of Banks in the Middle East and North Africa: http://www.hawkamah.org/events/conferences/conference_2009/files/mena-policy-brief-banks.pdf. Principles of Corporate Governance (2004): www.oecd.org/dataoecd/32/18/31557724.pdf. The Role of the Board in Disclosure: An Examination of What Codification Efforts Say (2004): http://www.oecd.org/dataoecd/55/33/32387383.pdf. UNCTAD Guidance on Good Practice in Corporate Governance Disclosure: www.unctad.org/en/docs/iteteb20063_ en.pdf. 64 Policy Brief Corporate Governance for Banks in Southeast Europe
C. Synopsis: BCBS Enhancing corporate governance for banking organizations (2006) Sound corporate governance principles Principle 1: Board members should be qualified for their positions, have a clear understanding of their role in corporate governance and be able to exercise sound judgment about the affairs of the bank. Principle 2: The board of directors should approve and oversee the bank’s strategic objectives and corporate values that are communicated throughout the banking organization. Principle 3: The board of directors should set and enforce clear lines of responsibility and accountability throughout the organization. Principle 4: The board should ensure that there is appropriate oversight by senior management consistent with board policy. Principle 5: The board and senior management should effectively use the work conducted by the internal audit function, external auditors, and internal control functions. Principle 6: The board should ensure that compensation policies and practices are consistent with the bank’s corporate culture, long-term objectives and strategy, and control environment Principle 7: The bank should be governed in a transparent manner. Principle 8: The board and senior management should understand the bank’s operational structure, including where the bank operates in jurisdictions, or through structures, that impede transparency (that is, “know your structure”). The role of supervisors Supervisors should provide guidance to banks on sound corporate governance and the proactive practices that should be in place. Supervisors should consider corporate governance as one element of depositor protection. Supervisors should determine whether the bank has adopted and effectively implemented sound corporate governance policies and practices. Supervisors should assess the quality of banks’ audit and control functions. Supervisors should evaluate the effects of the bank’s group structure. Supervisors should bring to the board of directors’ and management’s attention problems that they detect through their supervisory efforts. Corporate Governance for Banks in Southeast Europe Policy Brief 65
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Corporate Governance for Banks in S
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Contents I. Introduction...........
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I. Introduction The stability of gl
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II. Overview of bank corporate gove
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framework for coordinating crisis m
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III. Sound corporate governance pri
Page 13 and 14: The duty of care requires that boar
Page 15 and 16: A3. Training 20 Finding board talen
Page 17 and 18: Tests for integrity are needed. How
Page 19 and 20: Background Box 1: Legal Requirement
Page 21 and 22: Capacity issues Finally, competent
Page 23 and 24: A5. Role of the chair 29 The chair
Page 25 and 26: Among committees, the audit committ
Page 27 and 28: Background Box 2: Board Committees
Page 29 and 30: Briefing of the board: Audit commit
Page 31 and 32: Bulgaria The Bulgarian banking sect
Page 33 and 34: Recommendation: Evaluations: Banks
Page 35 and 36: Effective systems of risk managemen
Page 37 and 38: strategy. When the executive body o
Page 39 and 40: circumstances, these findings shoul
Page 41 and 42: A significant concern is the large
Page 43 and 44: D. Disclosure and transparency 60 D
Page 45 and 46: Supervisors also expressed skeptici
Page 47 and 48: Background Box 5: Disclosure Requir
Page 49 and 50: Recommendations: Disclosure and tra
Page 51 and 52: These limitations are due to the ve
Page 53 and 54: examinations permit a systematic ev
Page 55 and 56: Recommendation: Remedial action: Su
Page 57 and 58: VI. Additional issues A. State owne
Page 59 and 60: VII. Annexes A. Southeast Europe Po
Page 61 and 62: INTERNATIONAL EXPERTS Peter Dey, Ch
Page 63: B. Important sources of guidance on
Page 67 and 68: Complex or opaque corporate structu
Page 69 and 70: oard. The supervisory board is resp
Page 71 and 72: Bulgaria 19.1% Others 16.3% Unicred
Page 73 and 74: Romania 19% BCR (Erste) 13.1% BRD (
Page 75: For information requests and genera
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Corporate Governance for Banks in Southeast Europe: Policy - IFC

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