One of the concerns triggered by the 2008 financial crisis was the need for appropriate corporate governance in financial institutions. Indeed, corporate governance is one of the cornerstones of a properly functioning corporate sector and financial and economic system.


Credit institutions rely on public savings and make long-term commitments that require a high degree of confidence in their stability and solvency. Weaknesses in corporate governance in a number of institutions have contributed to excessive and imprudent risk-taking in the banking sector, which has led to the failure of individual institutions and systemic problems at European and global level. Companies must therefore commit to taking all measures necessary to ensure their business is governed well, not only in the interest of their own management but also to preserve the confidence of their customers, the public and market players in individual institutions and the financial system as a whole.

In line with international developments in the field of sound governance, both from the point of view of the supervisory authorities (new guidelines from the Basel Committee and the European Banking Authority (EBA)) and from the perspective of European regulations, Belgium in 2014 adopted a banking law[1] that specified the various rules on sound governance. These rules have since been reviewed on multiple occasions.

This Manual has two objectives: on the one hand, to bring together in a single text the legal and regulatory texts on sound governance that underpin the prudential supervision of credit institutions and (mixed) financial holding companies in Belgium (without replacing the underlying documents) and, on the other hand, to specify the NBB’s prudential expectations regarding governance by highlighting new elements resulting from the latest regulatory developments in this area.

To ensure compliance with the governance rules, the Banking Law grants the supervisory authority a broad range of measures: prudential measures in the context of Pillar 2 supervision (Article 149), recovery measures (Articles 234‑238), penalties (Articles 345‑346) and administrative fines (Article 347). Additionally, certain infringements are criminally sanctioned (Articles 348‑352).


This Manual applies to the following institutions[2]:

  • credit institutions established in Belgium[3];
  • branches established in Belgium of credit institutions governed by the law of a non-Member State of the European Economic Area[4]; and
  • financial holding companies and mixed financial holding companies governed by Belgian law[5].


This Manual aims to list all texts containing governance requirements (the Banking Law and its explanatory memorandum, regulations, royal implementing decrees, circulars, communications, European legislation and EBA guidelines) and, where appropriate, to provide further clarifications regarding these documents. This Manual, which was initially introduced via Circular NBB_2015_19, thus aims to specify the NBB’s prudential expectations regarding governance for a series of subjects. In addition, the Manual also addresses topics that are, as such, not covered by specific policy documents. Evidently, policy documents that are not covered by this Manual will continue to apply. Furthermore, the Manual is without prejudice to the governance powers of other supervisory authorities (e.g. the FSMA).

The Manual does not replace the relevant policy documents. If such a policy document is amended, the Manual will be adapted and should be interpreted in a dynamic manner in the interim. As the Manual is in principle an online publication, it is intended to be a living document that remains applicable without every amendment requiring a change in its title or reference, as is the case for example with circulars that are not published in a web format. Any amendments made will, however, always be notified to the institutions. Additionally, they will be explained in a specific section, with an indication of the date of the amendment.

Insofar as possible, the structure of the Manual follows that of the Banking Law and of the EBA Guidelines of 2 July 2021 on internal governance (EBA/GL/2021/05).

It should be noted that for the purposes of the Manual, the Single Supervisory Mechanism should also be taken into account[6]. In this respect, “supervisory authority” should be understood to mean either the ECB or the NBB, depending on the circumstances. Although the ECB is competent for “important”[7] credit institutions within the meaning of the SSM Regulation, it is the task of the national competent authorities to assist the ECB in its supervisory activities. The NBB offers such assistance in the context of the ’Joint Supervisory Teams’, which are the institutions’ first point of contact.

The Manual covers the following topics: (i) qualities required of shareholders or partners; (ii) suitability of the management and of the independent control functions; (iii) appropriate organisation of the business; (iv) governance at group level; and (v) prudential reporting and transparency.


Article 21, § 2 of the Banking Law provides that institutions’ internal governance arrangements must be proportionate to the nature, scale and complexity of the risks inherent in the institution’s business model and operations.

Under the principle of proportionality, the institutions falling within the scope of this Manual may take into account criteria such as the nature, scale and complexity of the risks inherent in the institution’s business model and operations in order to determine the level of governance requirements applicable to them. For the purpose of proportionality, it is also allowed to adjust the reporting frequency, as is the case for the senior management’s report on the assessment of internal control (transmission every 2 years for credit institutions not subject to direct supervision by the ECB and every year for institutions subject to direct supervision by the ECB, pursuant to Article 59 of the Banking Law).

For more information on proportionality and the criteria to be taken into account, please refer to paragraphs 16 to 18 of Guidelines EBA/GL/2021/05.


The terms used in this Manual have the same meaning as in Article 3 of the Banking Law or in Guidelines EBA/GL/2021/05. For the purposes of this Manual, the following definitions apply:

Directors”: all members of the statutory governing body of an institution falling within the scope of this Manual, both the executive and non-executive directors.

ECB”: the European Central Bank.

NBB”: the National Bank of Belgium.

CAC”: the Companies and Associations Code, as introduced by the Law of 23 March 2019.

Senior managers”: the persons who take part in the institution’s senior management[8], i.e.:

Institution responsible for the group”: a parent credit institution, a designated credit institution or an approved or designated (mixed) financial holding company responsible for ensuring compliance with prudential requirements on a consolidated basis.

Diversity”: the situation whereby the characteristics of the members of the statutory governing body, including their age, gender, geographical provenance[9] and educational and professional background, are different to an extent that allows a variety of views within the statutory governing body.

Independent control functions”: the risk management function, the compliance function and the internal audit function[10].

Banking Law”: the Law of 25 April 2014 on the legal status and supervision of credit institutions.

Furthermore, where the Manual uses the term “institution”, it should be read as referring to the institutions falling within the scope described above. Similarly, the term “supervisory authority” should be understood to mean either the ECB or the NBB, as the case may be.


[1] Law of 25 April 2014 on the legal status and supervision of credit institutions and stockbroking firms.

[2] The governance manual also applies by analogy to custodian banks and institutions supporting a central securities depository, insofar as the prudential expectations specified in the manual correspond to the legal provisions governing their respective statutes.

[3] Whether they are subject to the direct supervision of the ECB or the NBB, and whether or not they are considered significant within the meaning of Article 3, 30° of the Banking Law (see point 1:10 below).

[4] Taking into account Article 333 of the Banking Law.

[5] The governance rules for financial holding companies and mixed financial holding companies are set out in chapter 5 “Governance at group level” of this Manual.

[6] Pursuant to Article 6(4) and (5), point (b) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (Single Supervisory Mechanism Regulation or SSM Regulation), important credit institutions as defined in that Regulation are subject to the direct supervision of the ECB.

[7] The term “important” as used in the SSM Regulation should not be confused with the notion of “significant” as referred to in Article 3, 30° of the Banking Law, which aims to formalise the application of the principle of proportionality with regard to governance requirements.

[8] See the definition of “senior management” in the Regulation of the NBB of 9 November 2021 on the exercise of external functions.

[9] The term “geographical provenance” refers to the region where a person has gained a cultural, educational or professional background. This aspect is particularly important for institutions that are active internationally.

[10] In Belgium, these three mandatory independent control functions constitute “key functions”  as referred to in Guidelines EBA/2021/05.