Corporate Governance Requirements in Swedish Banking Regulations

Overview

The Swedish Financial Supervisory Authority (SFSA) sets forth specific guidelines for corporate governance in banks licensed in Sweden. This guide outlines key requirements, including registration and oversight of senior management, accountability, and remuneration policies.

Registration and Oversight of Senior Management

• The SFSA assesses the suitability of candidates for senior management positions.
• The board is responsible for ensuring that:
  • The entire board has sufficient expertise and experience to run the company.
  • The board composition reflects a balance of skills, experience, and perspectives.

Accountability

• The board is accountable for ensuring compliance with banking regulations.
• Members can be held accountable for infringements, which may result in intervention or damages compensation.

Remuneration Requirements

• Banks have strict policies regarding remuneration structures, including:
  • Sound risk management to counteract excessive risk-taking behavior.
  • Balanced fixed and variable components of employee remuneration.
• Special attention is given to “specially regulated staff,” including:
  • Senior managers
  • Employees in control functions
  • Those whose professional activities can significantly impact the firm’s risk level

Conclusion

This guide provides a comprehensive understanding of corporate governance requirements in Swedish banking regulations. Compliance with these rules ensures stability and integrity within the financial sector, highlighting the importance of effective board oversight, accountability, and remuneration policies.