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NLB Group

NLB corporate governance

NLB corporate governance

NLB, as the parent bank and in line with established business principles, provides corporate governance for the NLB Group by following fundamental doctrines of corporate governance and supervision, and other standards that ensure effective business supervision.

Management Board

NLB’s Management Board leads, represents and acts on behalf of the Bank, independently and at its own responsibility, as provided for by law and the Bank’s articles of association. In accordance with the articles of association, the Supervisory Board may nominate and appoint three to six members (a president and up to five members) to the Management Board. The president and the members are appointed for a term of five years, and may be reappointed or recalled before their term expires in accordance with the law and the Bank’s articles of association. The terms of Božo Jašovič, David Benedek and Claude Deroose expire on September 30, 2014, July 17, 2014 and July 15, 2012, respectively, while the terms of Marko Jazbec and Robert Kleindienst expire on November 30, 2014.

 

Collective decision-making bodies

  • The NLB Credit Committee determines credit ratings, sets debt ceilings and approves commercial banking investments. The committee’s decisions are made in accordance with the NLB Rules on Mandates and Authorizations. The committee meets once a week. The committee comprises four members of the Management Board (all members of the Management Board except the member responsible for retail banking and operations with sole traders and SMEs). The chairman of the committee is the member of the Management Board responsible for corporate banking. The committee achieves quorum when at least three members of the Management Board are present.
  • The NLB Retail Credit Committee decides on the approval of loans and other investment proposals, the conditions of which deviate from normal banking products and services, and exceed the business network’s director’s authorization as determined by a Management Board decision. The committee’s decisions are made in accordance with the NLB Rules on Mandates and Authorizations. The committee meets once a week and comprises five members. The chairman of the committee is the member of the Management Board responsible for retail banking and operations with sole traders and SMEs. The committee achieves quorum when at least three members of the committee are present, of which at least one must be a member of the Management Board.
  • The NLB Assets and Liabilities Committee monitors conditions on the financial markets and analyses the balance, changes and trends in the Bank’s assets and liabilities. It also adopts decisions with respect to achieving the desired balance sheet structure that are in line with business policies and that facilitate normal operations and the implementation of established plans. The committee meets once a month, and comprises five members. At least three members of the Management Board must be present at meetings. The chairman of the committee is the member of the Management Board responsible for financial markets and treasury and IT. The committee achieves quorum when the majority of its members are present.
  • The NLB Group Assets and Liabilities Committee monitors and discusses the operations of the NLB Group companies whose majority owner is NLB and the operations of all NLB Group companies involved in leasing and factoring and, to a lesser extent, the operations of other NLB Group companies. Meetings are convened at a minimum quarterly, but typically every two months. The committee comprises four members. At least two members of the Management Board must be present at meetings. The president of the Management Board serves as the committee’s chairman. The committee achieves quorum when the majority of its members are present.
  • The NLB Information Technology Committee is responsible for confirming the Bank’s annual development plans by setting priorities. It is also responsible for approving changes to priorities for overall control of development in areas tied to the realization of established objectives by the envisaged deadlines and in line with the planned budget. The committee generally meets five times a year and comprises 12 members. The chairman of the committee is the member of the Management Board responsible for financial markets and treasury and IT. The committee achieves quorum when the majority of its members are present.
  • The NLB Operational Risk Committee is a collective decision-making body of the Bank’s Management Board responsible for monitoring, guiding and supervising operational risk management at NLB, and for transferring this methodology to NLB Group companies. Meetings are typically convened every two months. The committee comprises 15 members. The chairman of the committee is the member of the Management Board responsible for the assessment of investments and property, intensive care and recovery, financial management, risk management, and payment systems and back-office services.

 

Decision-making and advisory bodies of the Bank’s Management Board
  • The NLB Cost Committee is a decision-making and advisory body responsible for monitoring the allocation and approval of all operating costs at NLB.
Advisory bodies of NLB’s Management Board
  • The NLB Price Policy Committee is the Management Board’s coordinating and advisory body responsible for drafting resolutions regarding commercial interest rates and tariffs in line with NLB’s business policy and objectives.
  • The NLB Trading and Marketing Risk Committee is the Management Board’s coordinating and advisory body responsible for defining, adopting and supervising the implementation of policies and the Bank’s methodologies in the area of trading.
  • The College of the Bank is the advisory of the Management Board where ideas and suggestions regarding matters that fall under the decision-making authority of the Management Board are shared.
  • The Strategic Conference of the NLB Group is a special advisory body of the Management Board. It is typically convened once a year. The NLB Group’s strategic and business objectives for the coming year are discussed at the meeting.
  • The Business Conference of the NLB Group is typically convened once a year. The NLB Group’s strategic and business objectives are discussed at the meeting.

Supervisory Board

NLB’s Supervisory Board monitors and supervises the management and operations of the Bank. It carries out its tasks in accordance with the provisions of the laws governing banks and companies and NLB’s articles of association, which define the Supervisory Board’s responsibilities in Article 24. Unless otherwise stipulated in the articles of association, the Supervisory Board achieves quorum when properly convened and when at least half of its members are present or represented, including the chairman or deputy chairman.

In accordance with the articles of association, the Supervisory Board has 11 members appointed and recalled by the Bank’s General Meeting of Shareholders from candidates proposed by the shareholders or Supervisory Board.

At the general meeting of 30 June 2009, a new Supervisory Board was appointed for the period until the conclusion of the Bank’s annual general meeting, which approves the annual report for the fourth financial year from its appointment. The Chairman of the Supervisory Board is Dr. Marko Simoneti.

 

Responsibilities of the Supervisory Board

The responsibilities of the Supervisory Board are:
  • to monitor and supervise the management and operations of the Bank, and to propose measures to eliminate identified irregularities;
  • to review the reports of the Management Board and supervise its management of the banking group, and to propose measures to eliminate identified irregularities;
  • to report to the Bank’s General Meeting of Shareholders with regard to its work and findings as necessary, or at a minimum, when the annual report is released, and to approve measures to improve operations;
  • to discuss reports regarding internal supervision and audits, and to propose the adoption of direct measures on the basis of these reports;
  • to approve the adoption of the Bank’s general acts as determined by the articles of association, except for acts that require approval by the General Meeting of Shareholders, or acts based on laws or valid resolutions adopted by the General Meeting of Shareholders;
  • to approve decisions of the Management Board as required by regulations or the articles of association;
  • to draft proposals for the Bank’s General Meeting of Shareholders and carry out the tasks defined thereby, unless otherwise stipulated by regulations;
  • to examine and approve the annual report and proposals for the use of the distributable profit, and to prepare a written report for the General Meeting of Shareholders regarding the results of its examination;
  • to approve the Bank’s strategy, annual financial plan and business plan;
  • to discuss and monitor interim reports on the Bank’s operations;
  • to set credit and guarantee limits, and other limits related to the Bank’s operations;
  • to approve all activities that involve changes in the status of companies and other legal entities under the Bank’s majority ownership;
  • to set the Bank’s long-term borrowing limit;
  • to appoint and recall members of the Management Board;
  • to adopt rules of procedure regarding its work;
  • to define remuneration criteria for members of the Management Board and continuously verify their fulfillment;
  • to conclude contracts with members of the Bank’s Management Board, whereby the Bank is obliged to disclose data regarding individual remuneration of Management Board and Supervisory Board members in the Bank’s annual report, including notes to the criteria under the preceding indent; and
  • to approve changes to the articles of association that relate to the coordination of its wording with valid decisions adopted by the Bank’s General Meeting of Shareholders or Management Board pursuant to the articles of association.
Committees of the Bank’s Supervisory Board
  • The Strategy and Development Committee monitors issues regarding the Bank’s strategic objectives and development, and drafts proposals concerning Supervisory Board decisions, primarily by discussing, reviewing, and assessing the entire medium-term or longterm strategic plan of NLB and the NLB Group, and the more important elements of the Bank’s strategic and development plans. It discusses the adequacy of NLB’s and the NLB Group’s organization and corporate governance, discusses sales and purchases of participating interests in the NLB Group from a strategic viewpoint, and discusses the annual financial and business plans of NLB and the NLB Group on the basis of the adopted mediumterm/ long-term strategy and development. The Strategy and Development Committee comprises the following members: Rasto Ovin, chairman; Marko Simoneti, member; John Hollows, member; Boris Škapin, member; and Jurij Detiček, member.
  • The Audit Committee monitors and drafts proposals for Supervisory Board decisions concerning internal audits and the legal compliance of the Bank’s operations. For external and internal audit reports, it assesses auditing procedures, assesses and adopts recommendations or decisions related to the documents of external regulators, assesses internal controls, and assesses and recommends IT standards and policies to be applied at the Bank. The Audit Committee comprises the following members: Andrej Baričič, chairman; Riet Docx, member; John Hollows, member; and Sergeja Slapničar, external independent member.
  • The Risk Committee monitors and drafts proposals for Supervisory Board decisions concerning all areas of risk relevant to the Bank’s operations. The Risk Committee comprises the following members: Igor Masten, chairman; Riet Docx, member; Andrej Baričič, member; Stojan Petrič, member; and Boris Škapin, member.
  • The Remuneration and Appointment Committee monitors basic strategic issues and drafts proposals for Supervisory Board decisions concerning the appointment and dismissal of Management Board members, determines the methods of recruiting and selecting Management Board candidates, concludes and oversees the content of individual employment contracts with members of the Management Board, oversees the remuneration of Management Board members and sets remuneration criteria. The Remuneration and Appointment Committee comprises the following members: Marko Simoneti, chairman; Boris Škapin, member; John Hollows, member and Jurij Detiček, member.

General Meeting of NLB Shareholders

The General Meeting of NLB Shareholders meets and makes decisions at regular and extraordinary meetings, where it adopts resolutions in accordance with the law and the Bank’s articles of association. The responsibilities of the General Meeting of NLB Shareholders are stipulated by the Companies Act, the Banking Act and NLB’s articles of association.

The General Meeting of Shareholders makes decisions regarding:
  • the discharge of the Management Board and the Supervisory Board;
  • changes in the Bank’s share capital;
  • annual limits and characteristics of the issue of securities convertible to shares, and the Bank’s equity securities;
  • the appointment and recall of Supervisory Board members;
  • the remuneration of Supervisory Board members, and participation in the Bank’s profits by members of its Supervisory Board, Management Board and employees;
  • the organization that will carry out the audit of the Bank’s financial statements; and
  • changes in status, mergers and the discontinuation of the Bank’s operations.
The General Meeting of Shareholders adopts:
  • the Bank’s articles of association and amendments thereto;
  • the General Meeting of Shareholders rules of procedure; and
  • the annual report, if not adopted by NLB’s Supervisory Board or if the Management Board and the Supervisory Board defer the decision on the adoption of the annual report to the General Meeting of Shareholders.

Representatives of NLB shareholders met at the 15th General Meeting of Shareholders on June 30, 2010. A total of 81.31% of the shareholders were represented. Shareholders were briefed on the 2009 Annual Report and the Supervisory Board’s report on the findings of its verification of the 2009 Annual Report, and the report of the Internal Audit Center. Shareholders were informed that distributable profit for 2009 amounted to zero, and that the Bank generated a loss EUR 23,621,302.09. Net loss for the financial year was covered by charging profit reserves during the compilation of the financial statement. Shareholders conferred official approval upon the Management and Supervisory Boards for the 2009 financial year. A proposed change to the articles of association relating to authorized capital, which was solely the result of the fulfillment of the Bank’s obligations to the Republic of Slovenia arising from the issue of government guaranteed bonds, was not adopted by the required majority of votes. Shareholders appointed Jurij Detiček to the Supervisory Board on November 16, 2010 due to the resignation of Stanislava Zdravec Caprirolo, and set the session fees of the Supervisory Board members. The shareholders present at the General Meeting appointed PricewaterhouseCoopers as auditor for the 2010 financial year.

Representatives of NLB shareholders met at the 16th General Meeting of Shareholders on November 25, 2010. A total of 83.81% of the shareholders were represented. Shareholders approved, with 66.22% of votes, the counter-proposal of the Capital Assets Management Agency of the Republic of Slovenia by which the Management Board, with the consent of the Supervisory Board, would increase the Bank’s capital in the planned amount of EUR 250 million with the aim of improving the Bank’s capital strength and meeting the need for a higher level of regulatory capital. The basis for the capital increase is the Management Board’s statutory powers regarding authorized capital conferred at NLB’s General Meeting of Shareholders of June 30, 2009. Shareholders appointed Anton Macuh to the Supervisory Board on July 18, 2010 due to the resignation of Gregor Dolenc.

NLB does not have any shareholders with special controlling rights.

NLB has no limitations on voting rights, as voting rights are attached to all NLB shares (except to treasury shares) in accordance with the law.

 

NLB Group corporate governance

NLB, as the parent bank in the NLB Group, provides corporate governance for the NLB Group in accordance with the laws of the Republic of Slovenia and the laws of the countries in which NLB Group companies operate.

NLB's Management Board adopted the Corporate Governance Policy of the NLB Group, which comprehensively regulates the governance and supervision of the Group as one of its core business functions, and defines the roles, competencies and responsibilities of individual bodies and organizational units to ensure that they function cooperatively and harmoniously in their efforts to achieve the Bank’s business objectives.

NLB has a well-developed system of governance and supervision within the NLB Group that is implemented:

  • in accordance with fundamental corporate rules through various bodies of NLB Group companies:
    • through voting at the general meetings of shareholders of NLB Group companies;
    • by appointing NLB representatives to supervisory bodies;
    • by proposing executive appointments for NLB Group companies; and
    • through NLB’s participation in various committees and commissions of NLB Group companies.
  • through appropriate mechanisms for effectively monitoring operations, harmonizing business standards and disseminating information within the Group:
    • by business area (i.e. according to the "businessline" principle), meaning the principle of commercial and professional coordination within the NLB Group;
    • through the NLB Group Assets and Liabilities Committee;
    • by convening strategic conferences (where all NLB Group companies discuss the development priorities of the Group); and
    • by convening regional meetings at which all companies of the NLB Group in a particular country gather to discuss and coordinate the Group’s development priorities for specific markets.

NLB’s Internal Audit Center and external supervisors (e.g. the Bank of Slovenia and external auditors) provide additional supervision for the NLB Group.

In addition to the NLB Group Assets and Liabilities Committee, the NLB Group Corporate Governance Directorate was established at NLB with the aim of implementing corporate governance within the Group. In addition to established forms of corporate governance, the Directorate also performs corporate governance by individual areas and companies. The Directorate provides the technical bases for implementing the governance and supervisory role of NLB’s Management Board within the NLB Group, and plays a coordinating and supervisory role to achieve the harmonization of operations and synergies.

NLB Group
Annual Report 2010