Effective and sound corporate governance in microbanks contributes to the effective functioning and sustainability of the banking sector and, in general, the financial industry. Corporate governance requirements for microbanks operating in Georgia are established based on the "Corporate Governance Code for Microbanks."

 

The Corporate Governance Code is based on internationally recognized standards and best practices, such as those of the Basel Committee on Banking Supervision, the European Parliament and Council Directive 2013/36/EU of June 26 2013, the Organization for Economic Cooperation and Development (OECD), the UK Stock Exchange, and other leading corporate governance standards and principles.

 

The Corporate Governance Code regulates issues related to the supervisory board and its committees, such as the gender balance of supervisory board members, the number of members, their independence, qualifications, responsibilities, and delegation of powers, as well as issues related to the composition and qualifications of the Board of Directors, risk management, and internal control functions.

 

The Corporate Governance Code defines the principles of remuneration of material risk takers, including members of the supervisory board and directors.

 

The overall legal framework of corporate governance includes the "Code of Ethics and Professional Conduct for Banking and Securities Market Participants". The ethics code aims to establish internationally recognized standards of ethics and the banking profession in the banking sector, which will help enhance public trust in the banking sector and the banking profession, including among investors, and ensure the stable and effective functioning of the banking sector.

 

The "Code of Ethics and Professional Conduct for Banking and Securities Market Participants" includes ethical principles and professional conduct standards that regulate the following issues: professionalism, integrity in the financial market and banking sector, obligations to customers and employers, principles of professional activity, conflict of interest and the responsibility of individuals within the scope of the code. The code details the obligations of microbanks for the purpose of fulfilling ethical requirements, including issues of identifying violations, decision-making, and appeal procedures.