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Implementation of the Banking Code
The Dutch Banking Code, which was adopted by the Dutch Banking Association (NVB) in September 2009, came into effect on 1 January 2010. This new code is applicable to all banks that have a license to operate as such under the Dutch Financial Supervision Act (Wft). The Code is a self-regulation of the banking sector to address and implement the guidelines in the “Restoring Trust” report prepared by the Advisory Committee on the Future of Banks in the Netherlands on corporate governance, remuneration, risk management and audit issues.
The Code imposes a comply-or-explain principle which is one of the key elements of EU corporate governance framework. Therefore, any deviations from the Code have to be explained in the annual report of banks in the Netherlands.
After the Banking Code came into effect, Akbank N.V. has performed an impact and gap analysis in order to determine the existing status and the areas of improvement required to achieve full compliance with the Code. Brief information about the implementation process within the Bank is given in the following part with a reference to each chapter of the Code.
Supervisory Board
All members of the Supervisory Board have profound knowledge and experience in various fields of the banking business. A new Risk Committee at the Supervisory Board level has been established in February 2010. A lifelong education program is being designed for both the Supervisory Board and the Managing Board. The charter of the Supervisory Board is being revised and profile shall be prepared for vacancy positions. Annual self-evaluation is under development and independent assessment once every three years will be introduced.
Managing Board
Members of the Managing Board have signed the moral and ethical conduct declaration as defined in the Code. The charter of the Managing Board is being revised. The Code of conduct applicable for all employees in day-to-day business activities and employment agreements for new employees are being updated in line with the Code.
Risk Management
There are two risk management committees within the Bank; one at Supervisory Board level and the other at local management level. The risk management function is under the responsibility of one member of the Managing Board who does not bear direct responsibility on commercial business lines. Supervisory Board regularly supervises the risk policy and risk appetite of the Bank. The Bank has a product approval policy and process in place.
Audit
The Bank mainly complies with the Code’s requirements with regard to audit. The arrangement of the tripartite talks among internal audit, external audit and DNB is under consideration.
Remuneration
The Bank has a moderate and conservative remuneration policy which is being revised in line with the Code.
Akbank N.V. will report details on the implementation process of the Banking Code in the Annual Report 2010 of the Bank.
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