ABA Reviews Banking Corporate Governance Regulation
Date: December 20, 2015
Good corporate governance practices help support and strengthen corporate decisions aimed at achieving the corporate objective, especially those decisions that have an important impact on shareholders. The Bank’s principal corporate objective and goals, like that of any corporate business entity, is to perpetuate its business while protecting and enhancing, over the long term, the value of the investments of its shareholders in the Bank.
Corporate governance involves a set of relationships amongst the bank’s management, its board of management, board of supervisors, shareholders, its audit committee and other stakeholders. These relationships, which involve various rules and incentives, provide the structure through which the objectives of the banks are set, and the means of attaining these objectives as well as monitoring performance are determined. Thus, the key aspects of good corporate governance include transparency of corporate structures and operations; the accountability of board of management, board of supervisors to board of shareholders; and corporate responsibility towards stakeholders.
For better governance of Afghan banking sector, on 14th December 2015, Da Afghanistan Bank (Central Bank of Afghanistan) shared with ABA the draft version of Corporate Governance Regulation for further review and comments of member banks. Thus, ABA formed a working group and shared the corporate governance regulation with all its members. After depth review through working group, necessary changes consistent with international practices were suggested, compiled and officially submitted to Da Afghanistan Bank for consideration.
