The bank's remuneration structure should support sound corporate governance and risk management.

143. Remuneration systems form a key component of the governance and incentive structure through which the board and senior management promote good performance, convey acceptable risk-taking behaviour and reinforce the bank's operating and risk culture. The board (or, by delegation, its compensation committee) is responsible for the overall oversight of management's implementation of the remuneration system for the entire bank. In addition, the board or its committee should regularly monitor and review outcomes to assess whether the bank-wide remuneration system is creating the desired incentives for managing risk, capital and liquidity [By applying Implementing the FSB principles for sound compensation practices and their implementation standards - second progress report, 26 August 2013, p 14.]. The board or subcommittee should review the remuneration plans, processes and outcomes at least annually.

144. Systemically important financial institutions should have a board compensation committee as an integral part of their governance structure and organisation to oversee the compensation system's design and operation.

145. The FSB principles on compensation are intended to apply to significant financial institutions, but they are especially critical for large, systemically important firms. National jurisdictions may also apply the principles in a proportionate manner to smaller, less complex institutions. Banks are encouraged to implement the FSB principles, or consistent national provisions based on them.