Governance of banks. The independence of the management, decision-making and commercial operations of banks will be fully respected and the banks will continue to operate strictly in accordance with market principles. Any potential replacement of board members and senior management of the banks will be carried out without any political or other interference. These appointments will be made in line with best international practices. By end-June 2016 (key deliverable), the HFSF with the help of an independent international consultant will finalise the review of the boards of the banks in which the RFAs apply. This review will be in line with prudent international practices by applying criteria that go beyond supervisory fit and proper requirements. By end-July 2016, bank boards should be reconstituted in a manner that reflects the findings of the above review and respects the HFSF law. The HFSF will undertake every effort to ensure that the recruitment of any new board members will be fair and transparent, and that these new members are not linked to borrowers of the bank with an exposure above EUR 1 million or any exposures in arrears. The HFSF will make every effort to ensure that the new members shortlisted and nominated by the Nomination Committees of the banks respect the criteria specified in the HFSF law and further established by the review. By the same date, any other governance changes recommended by the review should also be implemented in the banks. By end-July 2016, the BoG, considering as a key element the SSM supervisory appraisal on this matter, will assess if banks boards’ and management have been aligned with the recommendations of the review and, if needed, the Authorities, by end September 2016, will take further action, including amendments to the regulatory bank governance framework. The HFSF will ensure through the amended Relationship Framework Agreements (RFAs) that the external auditors' contracts with the banks will have a maximum duration of five consecutive years, and the first rotation of the current auditors will take place in all banks as soon as possible operationally but not later than for the financial year of 2018.
Governance of banks. The Government will not intervene in the management, decision-making and commercial operations of banks, which will continue to operate strictly in accordance with market principles. Any potential replacement of board members and senior management of the banks will be carried out without any interference by the Government. These appointments will be made in line with best international practices, taking into account the specific rules of the HFSF law as regards the rights of private shareholders who participated in the banksʼ capital increases under the existing framework. By [XXX] (key deliverable), the HFSF with the help of an independent international consultant will finalise the review of the boards of the banks in which the RFAs apply. This review will be in line with prudent international practices by applying criteria that go beyond supervisory fit and proper requirements. By [XXX], bank board members should be replaced in a manner that reflects the findings of the above review and respect the HFSF law. The HFSF will make sure that the recruitment of any new board members and any senior executives will be fair and transparent, and that these new members and senior executives are not representatives of past shareholders or linked to borrowers of the bank with an exposure of [xxx EUR million] or any exposures in arrears. The HFSF will ensure that the new members shortlisted and nominated by the Nomination Committees of the banks respect the criteria specified in the HFSF law and further established by the review. By the same date, organisational and governance changes recommended by the review will also be implemented in the banks. By [XXX], the BoG will assess if banks boardsʼ and management have been aligned with the recommendations of the review and, if needed, the Authorities will take further action, including amendments to the regulatory bank governance framework.
