Featured Product

    EBA Publishes Benchmarking Report on Management Bodies in Banks

    February 03, 2020

    EBA published a benchmarking report on the diversity practices reported by competent authorities to EBA under the Capital Requirements Directive IV (CRD IV). Article 91(11) of CRD IV requires competent authorities to collect information disclosed on the diversity policy, monitor the extent to which these objectives and targets have been achieved in accordance with Article 435(2)(c) of the Capital Requirements Regulation (CRR), and use the collected information to benchmark diversity practices. The results of the benchmarking exercise reveal that, based on data as of September 2018, the overall representation of women in management bodies in their management function improved slightly while their representation in management bodies in their supervisory function improved significantly. However, the representation of women in management bodies is still relatively low and many institutions do not have a gender diverse board.

    More diverse management bodies can help improve decision-making regarding strategies and risk-taking by incorporating a broader range of views, opinions, experiences, perceptions, values and backgrounds. All institutions are required to adopt a policy promoting diversity within their management bodies. The issue of diversity is not limited to gender; it also concerns the age, professional and educational background, and geographical provenance of the members of the management body. Despite the legal requirements, a significant proportion of institutions have still not adopted a diversity policy and not all institutions that have adopted a diversity policy promote gender diversity by setting a target for the under-represented gender. EBA calls on institutions and member states to consider additional measures for promoting a more balanced representation of both genders and on competent authorities to ensure institutions’ compliance with the requirement to adopt diversity policies.

    The gender representation in institutions’ management bodies continued to differ significantly between member states. EBA analyzed whether there was, in 2018, a correlation between the profitability of a credit institution and the composition of the executive directors within the management body. Credit institutions that have executive directors of both genders seem to have a higher probability of a return on equity at or above the average of 6.42% than credit institutions with executive directors of only one gender. While 54.70% of the credit institutions with more gender-balanced management bodies in their management function have the return on equity at or above 6.42%, only 40.69% of those with executive directors of just one gender reach that return on equity level. EBA also collected data on remuneration for the management body to establish if there is a gender pay gap and found that the remuneration of male members of the management body is higher than that for female members.

    Under the relatively recently revised Capital Requirements Directive or CRD5, EBA is mandated to benchmark gender-neutral remuneration practices and will carry out further work in this area. Therefore, EBA has revised and clarified its benchmarking methodology. Since the last exercise, benchmarks regarding employee representatives have been added and, as part of the 2019 exercise, EBA has performed a first benchmarking of the gender pay gap at the level of the management body. 

     

    Related Links

    Keywords: Europe, EU, Banking, Benchmarking Exercise, CRR/CRD, Operational Risk, Governance, Remuneration Practices, Disclosures, EBA

    Featured Experts
    Related Articles
    News

    APRA Plans to Assess Climate Risks and Develop Prudential Guidance

    APRA published a letter that outlines its plans to undertake a climate change vulnerability assessment and develop a prudential practice guide focused on climate-related financial risks.

    February 24, 2020 WebPage Regulatory News
    News

    APRA to Transition to Annual Stress Testing of Large Banks in 2020

    APRA published key findings of the stress testing assessment conducted on authorized deposit-taking institutions.

    February 21, 2020 WebPage Regulatory News
    News

    IAIS Statement on Monitoring Period of Insurance Capital Standard

    IAIS published a statement from its Secretary General Jonathan Dixon on the Insurance Capital Standard (ICS) monitoring period.

    February 21, 2020 WebPage Regulatory News
    News

    EC Consults on Review of Non-Financial Reporting Directive

    EC is launched a consultation on the review of the Non-Financial Reporting Directive or NFRD (Directive 2014/95/EU, as part of its strategy to strengthen sustainable investment in Europe.

    February 20, 2020 WebPage Regulatory News
    News

    EIOPA Consults on Standards for Supervisory Reporting Under PEPP Rule

    EIOPA is consulting on the implementing technical standards for supervisory reporting and cooperation, as mandated by the Pan-European Personal Pension Product (PEPP) Regulation (Regulation 2019/1238).

    February 20, 2020 WebPage Regulatory News
    News

    ECB Report on Transfer of Liquidity from EONIA Products to €STR

    ECB published a report on the transfer of liquidity from the cash and derivatives products of the Euro Overnight Index Average (EONIA) to the Euro Short-Term Rate (€STR).

    February 19, 2020 WebPage Regulatory News
    News

    ESRB Publishes Report on Systemic Cyberattacks

    ESRB published a report that explores systemic implications of cyber incidents, such as cyberattacks.

    February 19, 2020 WebPage Regulatory News
    News

    FSB Chair Sets Out Key Deliverables for G20 Presidency of Saudi Arabia

    FSB published a letter from the Chair Randal K. Quarles to the G20 finance ministers and Central Bank governors ahead of the meetings in Riyadh on February 22-23.

    February 19, 2020 WebPage Regulatory News
    News

    CFTC Proposes Rules on Derivative Position Limits and Swap Execution

    CFTC approved a proposed rule on position limits for derivatives and a proposed rule amending requirements for certain Swap Execution Facilities and real-time reporting.

    February 19, 2020 WebPage Regulatory News
    News

    BIS Appoints Heads of Innovation Hubs in Singapore and Switzerland

    BIS announced key personnel appointments to the Innovation Hubs in Singapore and Switzerland.

    February 19, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4717