CMN Resolution No. 4,878 — Governs the Succession Policy for Administrators of Institutions Authorized by the Central Bank of Brazil

Resolution No. 4,878

CMN RESOLUTION NO. 4,878, OF DECEMBER 23, 2020

Governs the succession policy for administrators of institutions authorized to operate by the Central Bank of Brazil.

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the National Monetary Council, in a session held from December 18 to 23, 2020, based on Article 4, item VIII, of the aforementioned Law, and Article 1, paragraph 1, of Complementary Law No. 130 of April 17, 2009,

RESOLVES:

Article 1. Institutions authorized to operate by the Central Bank of Brazil must implement and maintain a succession policy for administrators applicable to the senior management positions of the institution.

Sole Paragraph. The provisions of this Resolution do not apply to:

I - micro-entrepreneur credit societies and small business companies;

II - direct credit societies;

III - peer-to-peer lending societies;

IV - institutions authorized to operate by the Central Bank of Brazil under extrajudicial liquidation regime; and

V - consortium administrators and payment institutions, which must follow the regulations issued by the Central Bank of Brazil in the exercise of its legal competence.

Article 2. The administrator succession policy must be compatible with the nature, size, complexity, structure, risk profile, and business model of the institution, in order to ensure that those occupying senior management positions have the necessary competencies to perform their functions.

Sole Paragraph. The institution must expressly indicate in its administrator succession policy the positions to which this policy applies.

Article 3. The administrator succession policy must cover processes for recruitment, promotion, election, and retention of administrators, formalized based on rules that govern the identification, evaluation, training, and selection of candidates for senior management positions, considering, at a minimum, the following aspects:

I - conditions for exercising the position required by current legislation and regulations;

II - technical capacity;

III - managerial capacity;

IV - interpersonal skills;

V - knowledge of legislation and regulations regarding liability of any kind for their performance; and

VI - experience.

Article 4. The board of directors must approve, supervise, and control the processes related to the planning, operationalization, maintenance, and revision of the administrator succession policy.

§ 1. In the absence of a board of directors, the responsibilities mentioned in the main text must be the responsibility of the institution's executive board.

§ 2. The administrator succession policy of credit cooperatives must be approved by the general assembly.

Article 5. The administrator succession policy must be subject to review at least every five years.

Article 6. The institutions mentioned in Article 1 must keep documentation related to the administrator succession policy available to the Central Bank of Brazil for a minimum period of five years.

Article 7. The Central Bank of Brazil is authorized to issue regulations and adopt measures necessary for the compliance with this Resolution.

Article 8. The following are repealed:

I - Resolution No. 4,538 of November 24, 2016; and

II - Article 44 of Resolution No. 4,656 of April 26, 2018.

Article 9. This Resolution enters into force on January 1, 2021.

Bruno
Serra Fernandes
President of the Central Bank of Brazil, substitute