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Version date: 25 April 2024 - onwards
Version 2 of 2

Principle 14 - Corporate governance (paras. 40.32-40.33) (effective as of 25 April 2024)

40.32 Principle 14: [Reference documents: BCBS, High-level considerations on proportionality, July 2022; FSB, Strengthening governance frameworks to mitigate misconduct risk: a toolkit for firms and supervisors, April 2018; FSB, Supplementary Guidance to the FSB Principles and Standards on Sound Compensation Practices, March 2018; BCBS, Corporate governance principles for banks, July 2015; FSB, Guidance on supervisory interaction with financial institutions on risk culture: a framework for assessing risk culture, April 2014; FSB, Principles for Sound Compensation Practices, April 2009.] The supervisor determines that banks have robust corporate governance policies and processes covering, for example, corporate culture and values, strategic direction and oversight, group and organisational structure, the control environment, the suitability assessment process, the responsibilities of the banks' boards and senior management, and compensation practices. These policies and processes are commensurate with the risk profile and systemic importance of the bank.

40.33 Essential criteria:

(1) Laws, regulations or the supervisor establish the responsibilities of a bank's board and senior management with respect to corporate governance to ensure there is effective control over the bank's entire business. The supervisor provides guidance to banks on expectations for sound corporate governance.