Essential features of the Policy for assessing the suitability of members of the Management Board and Supervisory Board of Abanka d.d.

 

In accordance with the Banking Act, regulations issued on the basis thereof and guidelines issued by the European Banking Authority (EBA), the bank has formulated the Policy for assessing the suitability of members of the Management Board and Supervisory Board (hereinafter: the policy). The policy was established in 2013 with the aim of defining the qualities that a candidate for member of the Management Board and Supervisory Board (hereinafter: member) must possess, and the qualities that a person who already performs the function of member must possess. The bank follows the principle of “fit and proper” when defining the required qualities of a member, and thus strives to appoint independent persons who fairly, responsibly and professionally manage and supervise the bank’s operations, and who are appropriately active in that regard. By establishing and undertaking to comply with the policy, the bank meets the highest professional and ethical standards of governance, and ensures integrity and transparency in the management of the bank and the supervision of its operations.

 

The policy defines the responsible body, procedures and criteria for drawing up suitability assessments for members, as well as the body responsible for assessing the effectiveness of the bank’s Supervisory Board and Management Board as a whole body. The policy also defines procedures and activities for recruiting members of both bodies and introducing them to their function, and for the training of members of both bodies.

 

The Nomination Committee is responsible for drawing up suitability assessments for members. The committee draws up written assessments of the suitability of members based on findings regarding the fulfilment of criteria set out in the policy, the Banking Act, regulations issued on the basis thereof and guidelines issued by the European Banking Authority (EBA).

 

The committee draws up suitability assessments for members during the process of selecting a new member and during the process of verifying the fulfilment of conditions under this policy by an existing member, at least once a year or in the event of changing circumstances.

 

Criteria for drawing up suitability assessments for members

 

Suitability assessments for members are drawn up on the basis of the criteria set out in the policy, taking into account the level and nature of experience required for work in management and supervisory positions, reputation, ethical integrity, and the capacity for constructive cooperation in management and supervision. The assessment of experience considers a wide range of knowledge (theoretical and practical), skills and experience, taking into account the type and complexity of the function for which a person is a candidate or to which they have been appointed, as well as suitability in terms of the time a member dedicates to their function, including the definition of the qualities of an individual (reputation). The policy requires, at a minimum, a university-level qualification, five years of work experience in a management position and knowledge of at least one foreign language. The policy also stipulates that suitable qualifications are those related in substantive terms to banking, finance, economics, management, financial regulations, mathematics or statistical science (the conditions for performing a particular function).

 

In the selection of members in terms of their ability to constructively cooperate in management, the policy also takes into account the diversity of the required knowledge and experience of the management body, including the appropriate representation of both genders, as well as the contribution of a specific member to the heterogeneity and thus the improvement of the body in terms of expertise and the sharing of work. The committee submits assessments to the bank’s Supervisory Board for discussion, while the latter uses that assessment as the basis for its selection decision.

 

Criteria for assessing the suitability of members and the effectiveness of the management body, and the bank’s diversity policy

 

Taking into account requirements arising from the implementation of the diversity policy as it relates to the management body, the bank pursues objectives regarding the appropriate representation of both genders, qualifications, professional experience and expertise, while striving to ensure that the aforementioned body possesses the necessary knowledge, experience and skills for the successful supervision of the bank’s operations.

 

The committee assesses the effectiveness of the management body once a year, by assessing whether the body functions in the interest of the bank, the appropriateness of the body’s composition, procedures for the appointment of the body’s members, the body’s sessions, the appropriateness of notification of the body’s members, the culture and development of the body, the performance of the body’s tasks, the relationship with the bank’s Management Board, the functioning of the body’s committees, the appropriateness of training, the appropriateness of support provided to the body and the contributions of specific members of the body, which facilitates the professional and independent inclusion of that body in the formulation of objectives, strategies and policies relating to the taking up and management of risks. The committee uses a matrix of the existing and required knowledge, skills and experience of members, and performs a two-step assessment of the suitability of the management body to analyse the diversity of the aforementioned body and to determine the need for the additional collective knowledge of its members.

 

On this basis, the Nomination Committee assesses the following, in particular, when drawing up its assessment of the Management Board and Supervisory Board as a whole body:

 

  • the diversity of a body, which facilitates the professional and independent inclusion of that body in the formulation of objectives, strategies and policies relating to the taking up and management of risks;

  • whether a body enjoys the trust of shareholders, the supervisory and/or management body, and other stakeholders and supervisory institutions;

  • whether a body is a strong and tight-knit group, in which all decisions are adopted unanimously despite differing points of view;

  • whether a body monitors new developments in corporate governance and the technical areas relevant for the performance of its function at the bank;

  • whether the body participates in training and education with the aim of developing and maintaining an appropriate level of expertise at the bank;

  • whether the body works in a transparent manner with the Supervisory Board and/or Management Board;

  • whether procedures for selecting candidates as members of the Management Board and/or Supervisory Board are defined in sufficient detail and are carried out according to established criteria; and

  • efforts to achieve the appropriate representation of both genders on the Management Board and/or Supervisory Board.

     

    Based on an assessment of the appropriateness of its composition and the effectiveness of its work, the management body plans improvements as required and sets priorities for measures. Thus at the end of 2017, the Supervisory Board determined the appropriateness of the composition and effectiveness of the management body, and adopted recommendations for improvements and a training programme for the aforementioned body’s members.

     

    Policy for assessing the suitability of members of the management and supervisory boards of Abanka’s subsidiaries

     

    In accordance with the overall HR policy and the policy governing the organisation of Abanka Group companies, the policy is also used as a reference document in the recruitment of the senior management staff of subsidiaries and supervisory board members at those companies.