To improve gender diversity in the Supervisory Boards and Directorates of commercial banks, the National Bank of Georgia plans to amend the Corporate Governance Code for Commercial Banks. For this purpose, the NBG is pleased to offer the draft to the sector for consultation, giving the interested parties the opportunity to share their opinions and comments.

 

The initiative is in full compliance with active international practices and trends.

 

The gender diversity requirement (at least 20% of the Supervisory Board being composed of representatives of different genders) was first featured in the “Corporate Governance Code for Commercial Banks” in 2018. The requirement was based on various studies that suggested that there is a negative correlation between gender diversity and riskiness. According to the study, women, on average, tend to be more negatively disposed towards risks than men (for further details, refer to the NBG 2017 Annual Report; Box 3 - Overview of Corporate Governance Principles of Commercial Banks).

 

As a result of the requirement included in the Corporate Governance Code in 2018:

• From 2018 until now, the share of female representatives in Supervisory Boards has increased by 21%;
• In total, the share of female representatives (as of February 2022) is 30%, far exceeding the set requirement.

 

 

Considering this result and the recent international practices and trends, the NBG considers it appropriate to further increase the gender diversity requirement to help improve the gender diversity in the corporate culture of banks. The draft amendment available for consultation specifies that no later than June 1, 2023, the share of the opposite sex in the Supervisory Boards of banks should be at least 33%, and no less than 40% no later than June 1, 2025. Above the following, for the first time, a recommendation note is added to the Code regarding the composition of the Directorate of banks. It suggests that at least 33% of representatives of the opposite sex is desired to be in the Directorate.

 

The draft amendment has been published on the NBG website for consultation and feedback of interested parties. Suggestions, comments and questions can be sent to policy@nbg.gov.ge  before August 10, 2022.