Corporate Governance Guideline by Central Bank of Trinidad and Tobago
The Central Bank of Trinidad and Tobago has issued a Corporate Governance Guideline to provide a framework for financial institutions to maintain effective corporate governance practices.
Communication with the Central Bank
Effective communication is crucial between financial institutions and the Central Bank. This can be achieved through various methods, including:
- Scheduled meetings
- Emails
- Phone calls
- Video/ audio conferences
- Other communication methods
The purpose of communication is to facilitate timely and open dialogue on issues such as:
- Strategies
- Performance
- Business model
- Risks
- Risk management
- Corporate governance
- Culture
- Management
- Succession planning
- Compensation frameworks
- Supervisory findings
Board Responsibilities
The Board plays a critical role in ensuring the effective corporate governance of financial institutions. Some key responsibilities include:
Overseeing Business Continuity and Disaster Recovery
- The Board should approve the business continuity and disaster recovery policy/frameworks for the financial institution.
Challenging Management and Holding Them Accountable
- The Board should challenge management and hold it to account as necessary.
- The Board is expected to comply promptly and fully with requests for information from the Central Bank.
Corporate Culture and Values
A strong corporate culture and values are essential in promoting integrity and ethical behavior within financial institutions. Some key responsibilities include:
Setting Professional Standards and Corporate Values
- The Board should set professional standards and corporate values that promote integrity.
- The code of ethics should define acceptable and unacceptable behaviors.
Establishing a Code of Ethics
- The Board should establish standards of business conduct and a code of ethics for directors, senior management, and other personnel.
- The code of ethics should promote zero tolerance for illegal activity, ethical behavior, and timely discussion of problems.
Risk Management
Effective risk management is critical in maintaining the stability and integrity of financial institutions. Some key responsibilities include:
Approving an Enterprise-wide Risk Framework
- The Board should approve an Enterprise-wide Risk Framework that sets out basic goals, benchmarks, and limits with respect to the financial institution’s risk appetite.
- An effective risk governance framework includes a strong risk culture and well-defined responsibilities for risk management.