Agreement No. 008-2019: Adding Article 11-A to Agreement No. 005-2011 on Corporate Governance

Republic of Panama
Superintendence of Banks
AGREEMENT No. 008-2019
(of August 13, 2019)
"By which Article 11-A is added to Agreement No. 005-2011 which updates the provisions on Corporate Governance"

THE BOARD OF DIRECTORS in the exercise of its legal powers, and

CONSIDERING:

That as a result of the issuance of Law Decree No. 2 of February 22, 2008, the Executive Branch prepared a systematic ordering in the form of a single text of Law Decree No. 9 of February 26, 1998, and all its modifications, which was approved through Executive Decree No. 52 of April 30, 2008, hereinafter the Banking Law;

That in accordance with the provisions of numerals 1 and 2 of Article 5 of the Banking Law, it is the objective of the Superintendence of Banks to ensure the maintenance of the solidity and efficiency of the banking system; as well as to strengthen and foster the favorable conditions for the development of the Republic of Panama as an international financial center;

That in accordance with numeral 5 of Article 11 of the Banking Law, it corresponds to this Superintendence to establish, within the administrative scope, the interpretation and scope of legal or regulatory provisions in banking matters;

That Article 55 of the Banking Law establishes that banks will be obligated to comply with the corporate governance norms dictated by the Superintendence;

That Agreement No. 005-2011 of September 20, 2011, updates the provisions on Corporate Governance and establishes guidelines and reference parameters for banks to structure themselves within sound and safe banking practices;

That Law No. 56 of July 11, 2017 "Which establishes the participation of women in state boards of directors" and Executive Decree No. 241-A of July 11, 2018 "Which regulates Law No. 56 of July 11, 2017", provide that entities regulated and supervised by financial oversight bodies must designate as a minimum 30% women in the total of their Board of Directors positions;

That Article 8 of Executive Decree No. 241-A states that financial oversight bodies will establish in their corporate governance norms good practices related to the selection of members of the Board of Directors of the subjects regulated by them. Said article also indicates that the follow-up by the Superintendence of Banks will be carried out through compliance questionnaires in which the regulated subject, in case of non-compliance, must explain the reasons for non-compliance;

That in working sessions of this Board of Directors, the need and convenience of updating Agreement No. 005-2011 has been manifested, adapting its provisions in compliance with the provisions of Law No. 56 of 2017 and Executive Decree No. 241-A which regulates it.

Agreement No. 008-2019

AGREES:

ARTICLE 1. Article 11-A is added to Agreement No. 005-2011:

ARTICLE 11-A. APPOINTMENT OF DIRECTORS OF THE BOARD OF DIRECTORS.

In attention to the provisions established in Law No. 56 of July 11, 2017, and Executive Decree No. 241-A of July 11, 2018, which regulates it, banks must designate as a minimum thirty percent (30%) of women in the total of the Board of Directors director positions. For such purposes, the bank must make the designations taking into consideration the stages contemplated in Article 3 of Law No. 56 of 2017.

At the time of making the designations, the bank must take into consideration professional experience, track record, merits, and other characteristics established in its corporate governance policies and manuals.

The Superintendence of Banks will follow up on the provisions of this article through the application of compliance questionnaires; in which banks may also describe the reasons why the composition of their Board of Directors does not manage to adjust to the minimum percentage indicated by Law No. 56 of 2017 and its regulation. The presentation of the information established in this present article will be annually, in the format and date that the Superintendence establishes.

The provisions of this present article will not be applicable to branches of foreign banks and to banks of international license of which the Superintendence exercises destination supervision.

ARTICLE 2. VALIDITY. This Agreement will begin to govern from its promulgation.

Given in the city of Panama, on the thirteen (13) days of the month of August of two thousand nineteen (2019).

LET IT BE COMMUNICATED, PUBLISHED, AND COMPLIED WITH.

THE PRESIDENT, THE SECRETARY,
Joseph Fidanque III Nicolás Ardito Barletta