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Kontrola banaka | Proces supervizorske procene (SREP)

Assessment of the Bank's Corporate Governance and Internal Controls System

Within the SREP, the Bank Supervision Department analyses corporate governance in the bank, with the special emphasis on the system and functioning of corporate governance, the remit, responsibilities and structure of management bodies, risk management system, system of internal controls and the findings of the conducted assessment of the recovery plan.

The focus of the assessment of corporate governance and the system of internal controls is on assessing their correspondence to the risk profile, business model and size and complexity of the bank's operations, as well as on the extent to which the bank complies with the regulations, prudential business standards and good business practices in the area of corporate governance, risk management and internal controls system.

The Bank Supervision Department assesses a potential material impact of inadequate corporate governance and the internal controls system, particularly the impact on the bank's viability.

The assessment of corporate governance and the internal controls system includes the analysis of the following areas:

  1. сorporate governance system and its functioning;
  2. organisation of management bodies and other committees of the bank;
  3. corporate and risk culture;
  4. remuneration policies;
  5. system of internal controls;
  6. risk management, including the internal capital  adequacy  assessment  process (ICAAP), internal liquidity adequacy assessment process (ILAAP) and introduction of new products;
  7. accounting and administrative policies;
  8. outsourcing;
  9. information systems and business continuity; and
  10. recovery planning arrangements.

Based on the assessment of individual areas of corporate governance and internal controls system, the supervisor assesses whether the weaknesses in corporate governance and the internal controls system at a bank-wide level pose material risks to the bank's viability. Also, the assessment of this segment serves as important information in assessing the management of individual risks, as well as in assessing the adequacy of capital and liquid assets.