Bank of Russia gives recommendations to financial institutions’ executives on how to improve corporate governance practice
The regulator has drawn up its information letter On Recommendations to Financial Institutions’ Executive Bodies as part of the series of recommendations on enhancing corporate governance practice. This series was launched by the issue of the document dated 28 February 2019.
The recommendations highlight key aspects of the work of financial institutions’ executive bodies. They cover issues for the management of financial institutions to focus on in order to scrutinise the requirements of laws and regulations and financial institutions’ internal documents and to analyse them in greater detail.
The recommendations do not provide for any unified model of conduct for financial institutions’ executives, but rather describe approaches that may be implemented depending on the nature and scope of a financial institution’s business, strategic goals, risk profile and other factors.
The Bank of Russia expects that, by studying the recommendations and using them in corporate governance, financial institutions’ sole executive bodies, their deputies, members of collective executive bodies and other stakeholders engaged in corporate governance of financial institutions will help tackle a number of critical tasks:
— improving the quality of corporate governance, promoting a better understanding by financial institutions’ executives of their role in a financial institution’s corporate governance system and of the importance of knowledge and skills required to ensure high-quality management of a financial institution;
— enhancing the conditions for financial institutions’ executive bodies to elaborate a fair and reasonable approach to managing a financial institution as a key component of the corporate governance system which would contribute to a greater reliability of a financial institution and a higher stability of the financial market.