The banking, insurance and pension-fund supervisor (SBS) has put out its Regulation on Corporate Governance and Integrated Risk Management, under Resolution SBS 272/2017, analysed at its bill stage in Progreso 5.

The actual regulation contains matters not in the original bill. It establishes there must be at least one independent director on the boards of companies under its supervision and that companies with six or more board members should have at least two independent directors.

It also creates a mandatory board committee to deal with remuneration. The remuneration committee must pursue a remuneration policy that is in line with the company’s business strategy and policies, avoiding potential conflicts of interest.

It also gives a more detailed description of the companies’ obligation to identify potential conflicts of interest arising within the corporate governance and management bodies. Companies under SBS supervision must implement policies and procedures to deal with these, monitoring and controlling such potential conflicts.

Finally, it includes the updating of some concepts associated to risk management, such as risk capacity, risk appetite and risk ceilings. These are defined in line with the Principles for an Effective Risk Appetite Frameworks from the Financial Stability Forum.

This regulation will come into force on 1st April 2018.