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Overcoming ChallengesMa. Dolores B. Yuvienco              Assistant   Governor
Governance Structure• Setting strategic goals   – should taking into account the bank’s long term     financial interests,...
Governance Structure• Setting strategic goals   – adopt policies, procedures and systems     commensurate and suited to th...
Governance Structure• Exercising objective judgment   – select board of directors from a broad pool of     candidates   – ...
Governance Structure• Exercising objective judgment   – adopted “5-2-5” rule of the SEC      director can only serve as s...
Governance Structure  Audit Committee   CEO, CFO and/or Treasurer shall not be appointed as    members of the audit commi...
Governance Structure• Exercising objective judgment   – non-complex banks specifically, thrift; rural and     cooperative ...
Governance Structure• Strengthening checks and balances systems  – Banks should have appropriate and effective    checks a...
Governance Structure• Strengthening checks and balances systems   – internal controls and internal audit comprise the     ...
Compliance function• Elements of the compliance system  – compliance program duly approved by the board of    directors;  ...
Compliance function• simple banks may designate a non-executive member  of the board of directors to serve as the chief  c...
Overcoming ChallengesMa. Dolores B. Yuvienco              Assistant   Governor
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Ag yuvienco overcoming challenges 1

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Ag yuvienco overcoming challenges 1

  1. 1. Overcoming ChallengesMa. Dolores B. Yuvienco Assistant Governor
  2. 2. Governance Structure• Setting strategic goals – should taking into account the bank’s long term financial interests, level of risk tolerance and ability to manage risks effectively – should be implemented with clearly defined responsibilities and accountabilities
  3. 3. Governance Structure• Setting strategic goals – adopt policies, procedures and systems commensurate and suited to the risk profile and scope of operations of the bank
  4. 4. Governance Structure• Exercising objective judgment – select board of directors from a broad pool of candidates – have a sufficient number of non-executive directors in the board – minimum number of independent directors: at least 20% but not less than 2 of the members of the board, rounded up to the nearest whole number
  5. 5. Governance Structure• Exercising objective judgment – adopted “5-2-5” rule of the SEC director can only serve as such in the same company for 5 consecutive years the term may be extended for another 5 consecutive years only after a 2-year cooling off period after serving for 10 years, the independent director shall be perpetually barred from being elected as such in the same company
  6. 6. Governance Structure Audit Committee  CEO, CFO and/or Treasurer shall not be appointed as members of the audit committee Risk Oversight Committee  Shall be chaired by a non-executive member of the board  Shall have at least 1 independent director as member Corporate Governance Committee  Shall be chaired by an independent director
  7. 7. Governance Structure• Exercising objective judgment – non-complex banks specifically, thrift; rural and cooperative banks, may constitute at a minimum, the audit committee
  8. 8. Governance Structure• Strengthening checks and balances systems – Banks should have appropriate and effective checks and balances systems in place – non-executive members of the board of directors should conduct regular meetings with the heads of internal audit, compliance and risk management functions and the external auditor
  9. 9. Governance Structure• Strengthening checks and balances systems – internal controls and internal audit comprise the primary line of defense of banks against abusive practices – opinion of external auditors lends credibility to the financial statements prepared by the bank – the compliance system contributes to a strengthened control environment and increase in franchise value of banks.
  10. 10. Compliance function• Elements of the compliance system – compliance program duly approved by the board of directors; – a constructive working relationship of the BSP; and – a clear and open communication lines within the bank to educate and address compliance matters
  11. 11. Compliance function• simple banks may designate a non-executive member of the board of directors to serve as the chief compliance officer in a concurrent capacity
  12. 12. Overcoming ChallengesMa. Dolores B. Yuvienco Assistant Governor

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