Effective and sound corporate governance in banks facilitates the effective functioning and sustainability of the banking sector and the financial sector in general. Corporate governance requirements for commercial banks operating in Georgia are guided by the Corporate Governance Code for Commercial Banks.
The Corporate Governance Code is based on internationally recognized standards and best practices, such as those of Basel Committee on Banking Supervision, Directive 2000/36/EU of the European Parliament and of the Council of 26 June 2013, the Organization for Economic Cooperation and Development (OECD), the UK Stock Exchange and others.
The Corporate Governance Code governs issues related to the Supervisory Board and its committees, such as the gender balance of the Supervisory Board, the number of members, their independence, qualifications, responsibilities and delegation of authority, as well as the composition and competences of the Board of Directors, risk management and internal control functions.
The Corporate Governance Code sets out the principles for remuneration of material risk takers, including members of the Supervisory Board and Directors.
The Code of Ethics and Standards of Professional Conduct for Commercial Banks is part of the general legal framework of corporate governance. The Code of Ethics establishes internationally recognized standards of ethics and banking in the banking sector, which will help increase public confidence in the banking sector and the banking profession, including investor confidence, and support the stable and effective functioning of the banking sector.
The Code of Ethics and Standards of Professional Conduct for Commercial Banks includes the principles of ethics and standards for professional conduct, which addresses the following issues: professionalism, integrity of the financial market and banking sector, commitment vis-a-vis consumers and employers, principles of professional life, conflict of interests and liability of persons subject to the Code. The Code sets out in detail the obligations of commercial banks with regards to meeting ethical requirements, including the issues of identifying breaches, decision-making and appeals procedures.