Regulation No 01/2018 of 24 January 2018 on Corporate Governance for Banks

Official Gazette n° 6bis of 05/02/2018
REGULATION N° 01/2018 OF 24/01/2018 ON CORPORATE GOVERNANCE FOR BANKS
CHAPTER ONE: GENERAL PROVISIONS
Article One: Purpose
This regulation establishes requirements on corporate governance, identifying responsibilities in the managerial and operational structure of the banks and reinforcing key components of risk governance.
Article 2: Definitions
In this Regulation, the following terms and expression shall mean:
1° bank: a financial institution regulated and supervised under the law governing the organization of banking; 2° corporate governance: a set of relationships between a company’s management, its board, its shareholders and other stakeholders which provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance. It helps define the way authority and responsibility are allocated and how corporate decisions are made. 3° control: power by which natural persons or legal entities exercise control over a bank on account of:
a) holding more than fifty percent (50%) in the equity capital or voting rights; b) having the right to appoint or remove majority of the members of the Board of Directors of a bank who are at the same time shareholders of that bank; c) having the power to exert influence over a bank on the basis of a contract entered into with that bank, or to a clause in the bylaws of said bank; 4° control functions: the functions that have a responsibility independent from management to provide objective assessment and reporting and/or assurance. These include the risk management function, the compliance function and the internal audit function; 5° duty of care: the duty of board members to decide and act on an informed and prudent basis with respect to the bank. Often interpreted as requiring board members to approach the affairs of the company the same way that a “prudent person” would approach his or her own affairs. 6° duty of loyalty: the duty of board members to act in good faith in the interest of the bank. The duty of loyalty prevents individual board members from acting in their own interest, or the interest of another individual or group, at the expense of the bank and shareholders. 7° executive director: a member of the Board of Directors who also has management responsibilities within the bank. 8° fit and proper criteria: minimum requirements concerning each member of the Board of Directors and the senior management of a bank, including:
a) honesty, integrity and reputation, including but not limited to:
(i) no record of conviction of criminal offence; (ii) no adverse finding or any settlement in civil proceedings, particularly concerning investment or banking activities;