Corporate governance in NLB Bank means how business is managed in a transparent and responsible way and how we communicate with stakeholders.
The non-executive Supervisory Board governs the executive Management Board that is responsible for managing NLB Bank and NLB Group. NLB's external communication flows are carried out in compliance with central bank and stock exchange regulations, with the objective of providing all Stakeholders with relevant, timely and transparent information about business operations and results.
NLB Bank exercises control of NLB Group through different means. As a shareholder, NLB Bank participates at general meetings to influence important decisions such as appointing members to each Group company's supervisory boards and consequently influences the selection of their management boards. NLB Bank also appoints an auditor for each financial year, regulates remuneration of members of supervisory bodies, adopts strategic plans and approves annual plans. Additionally, it centralized the control of treasury activities and risk management standards by signing contracts on co-operation with all bank members of the Group.
The Supervisory Board supervises governance and monitors NLB Bank's performance. If the Companies Act does not define differently, the Supervisory Board is in quorum, when summoned in accordance with procedure and at least half of its members are present or represented, including the president or his deputy.
All Supervisory Board members conclude their mandate at the same time. Jože Lenič tendered his resignation on the July 30, 2003 and Herman Agneessens on January 1, 2004.
In 2003 the Supervisory Board had six meetings and an additional eleven correspondence meetings with the objective of improving efficiency and professionalism of operations and to enable more effective analysis. The Supervisory Board introduced working bodies at its annual meeting in 2002, a development committee and an audit committee were established:
- The Supervisory Board Development Committee follows strategic issues and prepares proposals on information system development, product development, operations on domestic and foreign markets and organization of NLB Bank.
- The Supervisory Board Audit Committee follows and prepares suggested decisions in the area of internal audit and compliance with legislation, internal and external audit reports and in evaluating audit procedures.
Marjan Kramar, president of the Management Board is responsible for strategic development of NLB Group, financial and risk management, human resources development, internal audit and business compliance.
Andrej Hazabent is responsible for NLB Group liquidity management, investment banking and corporate finance, asset management and management of the Group's capital investment strategy.
Matej Narat is responsible for corporate banking including the profitable growth of key market segments in the market.
Borut Stanič is responsible for international banking, payments, operations, informational technology and business support.
Pierre Van Keirsbilck is responsible for retail banking including the small and medium enterprises sector and electronic banking.
With the purpose of appropriate and effective management, the Management Board created a system of adequate risk management, internal audit and corporate management.
Working bodies of the Management Board include:
- Credit Committee whose role is to accept decisions on grading classifications, set exposure limits and approves loans in commercial banking.
- Asset and Liability Committee (ALCO) analyse balance sheet positions, changes and trends and forms decisions to achieve the balance sheet structure in line with the business policy. Its role includes overseeing that normal banking activity and targeted goals are set and achieved.
- Audit Committee executes independent and objective audits and coordinates the supervisory function in NLB Bank and the NLB Group.
- Development Committee is a coordinating and advisory body on establishing and supervising implementation of NLB Bank and NLB Group development.
- Cost Committee is a professional and coordinating body for the preparation and supervision of implementation of the cost budgeting policy for NLB Bank and NLB Group.
- Compliance Office supervises and encourages regulatory compliance and managing business with the intention of reducing operating risk.
General Meeting of Shareholders
Shareholders exercise their rights at NLB Bank's Annual General Meeting of Shareholders. The Management Board or the Supervisory Board summons Assemblies at least once a year and within six months after the end of each business year. Announcements need to be published at least one month before the date of the General Meeting.
Shareholders can exercise their rights at the General Meeting of Shareholders either in person, by legal representative or by proxy. Participation requires submitting to NLB Bank appropriate documentation verifying identification. Shareholders are obliged to announce their participation on NLB Bank's General Meeting of Shareholders at least 3 days prior to the meeting, and declare the total number of their shares to be used when voting at the Assembly.
Shareholders, who own at least 5% of nominal capital, can submit a written demand that the Supervisory Board summons a General Meeting of Shareholders or that a certain issue is put on the agenda at the Assembly.
Decrees at the Assembly can be enforced by a majority vote of Shareholders, unless the law or the Statute states otherwise.
In 2003 two regular Assemblies were convened. On the General Meeting on June 23 the owners were presented with NLB Bank Annual Report for the business year 2002 and the Supervisory Board report. The General Meeting of Shareholders accepted the Management and Supervisory Board's proposed resolutions on distributing profit. Alain Pilloux replaced Victor Pastor as the EBRD representative on the Supervisory Board. The auditing firm PricewaterhouseCoopers d.o.o. was appointed auditor of NLB for the year 2003.
On the Assembly, held on July 30, 2003 an initial decree (proposed on the meeting on June 23, 2003) on the distribution of profit was replaced by a new decree.
Shareholders' Information
NLB Bank's nominal capital amounts to 15,364,030,000 tolars. It is divided between 7,682,015 shares in the nominal value of 2,000 tolars each. All shares are ordinary shares and carry equal voting rights. Shareholders' names are written in the Share Register in accordance with regulations and the transfer of ownership or other changes due to legal relationships are also recorded in the register. The Share Register is available for public inspection.
At the end of 2003, ten largest shareholders held 92.3% of all NLB Bank shares.
In June 2003 on the regular General Meeting of Shareholders a dividend of 2,512,053,230 tolars from NLB Bank's 2002 profit was proposed and accepted representing an amount of 327 tolars gross per share.
On July 7, 2004 NLB Bank's Supervisory Board will propose a dividend payout of 2,197,363,570.60 tolars from the 2003 profits to the General Assembly Meeting. This will represent a dividend payout of 286 tolars per share.
