EN EN REPORT - European Corporate Governance Institute

decision on implementing technical measures to improve the quality and speed oftransmission of information to the board of directors should be left to the financialinstitutions, and thus to the board of directors thereof, so as to allow arrangements to bemade that are tailored to each institution and to its specific requirements;12. Takes the view that closer attention should be paid to the implementation of measures toraise risk awareness in financial institutions, as increased awareness of risk at all levels ofthe institution – and amongst its employees – is a decisive factor in improving riskmanagement;13. Is in favour of establishing paths to channel information on internal conflicts orinappropriate practices in a company to the risk committee or external supervisors, alsorecognising that practices sometimes differ from policies, and management is not alwaysaware of real practices;14. Takes the view that chief risk officers should have the same status in a financial institutionas the chief financial officer and should be able to report directly to the board; considersthat a risk committee should be established at board level to deal with risk issues andmonitor correct implementation of the risk strategy throughout the financial institution;calls for the introduction of European standards governing the qualifications of chief riskofficers and members of risk committees, with a view to enhancing their status withinfinancial institutions;15. Points out that the communication system between the risk management function and theboard of directors should be improved by setting up a procedure for referringconflicts/problems to the hierarchy for resolution;16. Takes the view that the external auditors in financial institutions should be required toinform the board of directors and the competent supervisory bodies immediately if theiraudit brings to light facts which could jeopardise the future of the institution or seriouslyhamper its development or which point to a serious breach of the licensing requirementsor the rules governing the performance of duties;17. Does not regard it as appropriate to require investors to make public the details of actualor alleged voting strategies in annual general meetings;18. Takes the view that institutional investors should be required formally and publicly toexplain any actions which breach the uniform EU code for institutional investors (‘complyor explain’), which needs to be established; points out, however, that such breaches areoften not explained or explained only inadequately, and that in such cases complianceshould be enforced by means of sanctions;19. Takes the view that the identification of shareholders should be facilitated in order toencourage dialogue between companies and their shareholders and to reduce the risk ofabuse connected to ‘empty voting’;20. Calls for the establishment of the electronic vote in order to encourage shareholders toengage in financial institutions’ corporate governance;ENPE454.525v05-00 14/21 RR\454525EN.doc