Introduction
There has been a great deal of attention given recently to the issue of corporate governance in various national and international forums and publications. In particular, the Organization for Economic Cooperation and Development (OECD) has issued a set of corporate governance standards and guidelines to help governments “in their efforts to evaluate and improve the [...]
The main (basic) legislative act in the area of corporate governance is the Law of Ukraine “On Business Associations” adopted on September 19, 1991.
However, the Presidential Decree “On the Measures with Regard to Development of Corporate Governance in Joint Stock Companies” signed in March 2002 made a considerable step forward on the way to best [...]
protect the interests of depositors;
set corporate objectives (including generating economic returns to owners);
run the day-to-day operations of the bank; consider the interests of recognized stakeholders
align corporate activities and behaviors with the expectation that banks will operate in a safe and sound manner, and in compliance with applicable laws and regulations.
The duty of care, as the name implies, involves the concern, attention and diligence that members of Council are expected to exercise in performing their duties.
Bearing in mind the fact specific nature of duty of care and understanding that high risk transactions require special attention, individual members of Supervisory Council can be reasonable assured of [...]
To avoid even the appearance of improper use of position, members of Supervisory Council should regard all information received as strictly confidential, regardless of its apparent materiality, and decline to discuss any matter related to the corporation except for the purpose of advancing its business.
A corporate opportunity issue arises when a member of Council pursues some investment opportunity in which the bank may also have an interest. Obviously, a member should not bid against the bank in order to obtain business or property, at least not without obtaining the prior consent of the Council; even then, there would be [...]
One of the main reasons why government arranged corporate governance in a way that gives government agencies (e.g. Central Bank) greater authority over the operations of banks is – to prevent disruption in the country’s banking system.
One of the aims of all corporate governance codes can be defined as ensuring effective and efficient risk management of all the issues – strategic, operational, compliance and financial – facing banks in today’s environment.
Proper risk identification focuses on recognizing and understanding existing risks or risks that may arise from new business initiatives. Risk identification should be a continuous process, and should occur at both the transaction and portfolio level.
Accurate and timely measurement of risks is a critical component of effective risk management. A bank that does not have a risk measurement system has limited ability to control or monitor risk levels. The sophistication of the risk measurement tools a bank uses should reflect the complexity and levels of risk it has assumed.
