Bishkek, Dec. 22, 2017 / Kabar /. The IFC (International Financial Corporation), a member of the World Bank Group, held a practical conference “New Trends and Prospects for Development of Corporate Governance in the Financial and Banking Sector of the Kyrgyz Republic”. The event was a part of the IFC Central Asia Corporate Governance Project implemented with the financial support from Swiss and United Kingdom governments.
Financial institutions play a crucial role in developing entrepreneurship, maintaining economic and social stability in the society and supporting the state’s international standing. One of the effective ways to enhance sustainability and reliability of the financial and banking system is improving corporate governance system to create necessary preconditions for adequate risk assessment, improving transparency of credit institutions, and enhancing integrity of the financial and banking sector.
Corporate governance, including in the financial and banking sphere, represents a system of interaction among key management bodies, the key pillar of which is the Board of Directors, which, representing the shareholders’ interests, is assigned to determine the strategy and supervise management’s activities.
The purpose of the conference was to discuss innovations in banking legislation related to regulation of corporate governance issues in commercial banks, namely, attracting more independent directors, improving efficiency of the Board of Directors through the work of their committees, strengthening the functions of the corporate secretary, etc. Moreover, the conference provided an opportunity to discuss challenges faced by banks in meeting regulatory and legal requirements, to exchange experience in overcoming them and consider, which initiatives could help to bring the corporate governance practice in financial and banking institutions to a new level.
During the event leading corporate governance experts and representatives of financial and banking sector of the Kyrgyz Republic also discussed a range of corporate governance specific issues, trends in international practice and prospects for development of corporate governance in the financial sector of the country.
The main sessions of the conference were built around the issues related to the work of the Broad of Directors, which is one of the key pillars of a proper corporate governance system setting the tone ‘from the top’. The quality and efficiency of its work has an influence on the formation of the whole system and the commitment of the management and the staff.
“Commercialbankshavealwaysbeenmoreprogressiveintermsofapplyingbestpracticesofcorporategovernance, which, on the one hand, is explained by the tighter regulator’s requirements as the banking activities are linked to high risks and, on the other hand, due to the need to attract investments to finance their operations,” – noted Yuliya Kholodkova, coordinator of the IFC Central Asia Corporate Governance Project.
Recent amendments to legislation are mainly based on recommendations of best practices in corporate governances, including recommendations by the Basel Committee on Banking Supervision and are aimed at enhancing the efficiency of banks’ management bodies and reducing risks. In addition, adhering to international standards will enable banks to become integrated into the global financial system and attract resources on more favorable terms.
“I hope that at this Conference we shall be able to discuss not only the problems faced by banks when adopting legal requirements, but exchange experiences and plan the steps to be undertaken to make the implementation not only official, but beneficial for each financial institution,”- added Yuliya Kholodkova.