BIS - Principles for enhancing corporate governance - consultative document
03/17/2010 BISThe Basel Committee on Banking Supervision published initial
guidance on corporate guidance in 1999, with revised principles in
2006. The Committee's guidance assists banking supervisors and
provides a reference point for promoting the adoption of sound
corporate governance practices by banking organisations in their
countries. The principles also serve as a reference point for the
banks' own corporate governance efforts.
Subsequent to the publication of the Committee's 2006 guidance, there have been a number of corporate governance failures and lapses, many of which came to light during the financial crisis that began in mid-2007. Drawing on the lessons learned during the crisis, the Committee's document, Principles for enhancing corporate governance, sets out best practices for banking organisations. The key areas where the principles have been strengthened include:
(1) the role of the board;
(2) the qualifications and composition of the board;
(3) the importance of an independent risk management function, including a chief risk officer or equivalent;
(4) the importance of monitoring risks on an ongoing firm-wide and individual entity basis,
(5) the board's oversight of the compensation systems;
and (6) the board and senior management's understanding of the bank's operational structure and risks.
The principles also emphasise the importance of supervisors regularly evaluating the bank's corporate governance policies and practices as well as its implementation of the Committee's principles.
Read more on BIS website
Subsequent to the publication of the Committee's 2006 guidance, there have been a number of corporate governance failures and lapses, many of which came to light during the financial crisis that began in mid-2007. Drawing on the lessons learned during the crisis, the Committee's document, Principles for enhancing corporate governance, sets out best practices for banking organisations. The key areas where the principles have been strengthened include:
(1) the role of the board;
(2) the qualifications and composition of the board;
(3) the importance of an independent risk management function, including a chief risk officer or equivalent;
(4) the importance of monitoring risks on an ongoing firm-wide and individual entity basis,
(5) the board's oversight of the compensation systems;
and (6) the board and senior management's understanding of the bank's operational structure and risks.
The principles also emphasise the importance of supervisors regularly evaluating the bank's corporate governance policies and practices as well as its implementation of the Committee's principles.
Read more on BIS website