Codes and Standards for Banks Codes and Standards for Banks and Financial Institutions:and Financial Institutions:

The EBRD-OECD Policy Brief on The EBRD-OECD Policy Brief on Corporate Governance of Banks in Corporate Governance of Banks in

EurasiaEurasia

Gian Piero CignaGian Piero CignaSenior Counsel, EBRD

Tbilisi, 24 November 2009

The EBRD-OECD Policy BriefThe EBRD-OECD Policy Brief

Developed in 2007-2008Developed in 2007-2008

Discussion Table made of Discussion Table made of representatives of banking sector representatives of banking sector in the regionin the region

Focus on corporate governance Focus on corporate governance of banksof banks

Securities markets not well Securities markets not well developeddeveloped

Banks as key vehicle for Banks as key vehicle for improving corporate governance improving corporate governance of investee companiesof investee companies

10 Recommendations10 Recommendations

1.1. Boards, board members and specialised Boards, board members and specialised committeescommittees

2.2. Bank’s strategic objectives, corporate values Bank’s strategic objectives, corporate values and high standards of professional conductsand high standards of professional conducts

3.3. Clear lines of responsibilities and accountabilityClear lines of responsibilities and accountability

4.4. Oversight by senior management and internal Oversight by senior management and internal control functionscontrol functions

5.5. Internal audit and external auditorsInternal audit and external auditors

10 Recommendations10 Recommendations

6.6. CompensationCompensation

7.7. Transparency and disclosure of corporate Transparency and disclosure of corporate governance informationgovernance information

8.8. Corporate governance of state-owned controlled Corporate governance of state-owned controlled commercial bankscommercial banks

9.9. Bank’s monitoring of the corporate governance Bank’s monitoring of the corporate governance practices of their corporate borrowerspractices of their corporate borrowers

10.10. The role of supervisors and next stepsThe role of supervisors and next steps

Corporate Governance:Corporate Governance:International standardsInternational standards