Principle 12: Disclosure and transparency
The governance of the bank should be adequately transparent to its shareholders, depositors, other relevant stakeholders and market participants.
151. Transparency is consistent with sound and effective corporate governance. As emphasised in existing Committee guidance on bank transparency [ BCBS, Enhancing bank transparency, September 1998, www.bis.org/publ/bcbs41.htm, and Review of the Pillar 3 disclosure requirements, June 2014, www.bis.org/publ/bcbs286.pdf; and FSB, Enhancing the risk disclosures of banks - report of the Enhanced Disclosure Task Force, October 2012, www.financialstabilityboard.org/publications/r_121029.pdf.], it is difficult for shareholders, depositors, other relevant stakeholders and market participants to effectively monitor and properly hold the board and senior management accountable when there is insufficient transparency. The objective of transparency in the area of corporate governance is therefore to provide these parties with the information necessary to enable them to assess the effectiveness of the board and senior management in governing the bank.
152. Although disclosure may be less detailed for non-listed banks, especially those that are wholly owned, these banks can nevertheless pose the same types of risk to the financial system as publicly traded banks through various activities, including their participation in payment systems and acceptance of retail deposits.