On October 22, 2022, in the Official Gazette No. 36,057, the Corporate Governance Regulation for Supervised Institutions (hereinafter referred to as the Corporate Governance Regulation) was published, establishing an adaptation period of 8 months.
During the adaptation period, we had the opportunity to advise banks, insurance companies, and other institutions supervised by the CNBS in updating their articles of incorporation and bylaws, as well as various policies, manuals, guidelines, and/or corporate governance codes. Additionally, in the second half of 2023 and 2024, we guided clients regarding CNBS reports resulting from audits aimed at verifying compliance and implementation of various aspects of the Corporate Governance Regulation.
Among the highlights of the Corporate Governance Regulation, we find the expansion of the concept of “suitability” contained in the special laws of each of the supervised institutions. In this regard, the CNBS establishes 3 types of suitability:
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- Financial Suitability.
- Moral Suitability.
- Technical Suitability.
These suitability concepts reaffirm the high criteria and standards for membership in the administrative bodies and officials of the supervised institutions, as outlined in CNBS Circular No. 17/2017 and in the Regulation of Minimum Requirements for New Supervised Institutions, on which we wrote an article in 2023.
Another of the most important changes established by this regulation is the implementation of “risk governance.” On this topic, it is established that the administrative body and its support committees are responsible for overseeing, strengthening, and promoting risk governance, with an emphasis on identifying and managing risks through the following lines of defense:
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