Plurality of mandates

According to Articles 61 and 62, § 1 of the Banking Law, members of the statutory governing body, members of the management committee, senior managers and persons responsible for independent control functions must devote sufficient time to the exercise of their functions in the institution. This general availability principle is specified in §§ 1 to 9 of Article 62 of the Banking Law and in the Regulation of the NBB of 9 November 2021 on the exercise of external functions by managers and persons responsible for independent control functions of regulated companies.

In summary, institutions should adopt and comply with internal rules on external functions with a threefold objective: (i) to safeguard availability, (ii) to prevent conflicts of interest, and (iii) to ensure disclosure of the external functions. Institutions should carry out an assessment in concreto of the impact of the external functions on the function/mandates performed by managers and the persons responsible for independent control functions. In this context, prior approval must be granted by the statutory governing body or the management committee on the basis of a dossier of which the minimum content is laid down in the Regulation of 9 November 2021. Institutions are obligated to disclose external functions (except those exercised by the persons responsible for independent control functions) through their annual report or on their website, and should notify the NBB through the fit & proper forms “New appointment” or “New elements”[1].

For significant institutions within the meaning of Article 3, 30° of the Banking Law, the said Law also contains specific quantitative restrictions on plurality of mandates. For more information on the application of these quantitative restrictions and on the method for calculating mandates, please refer to point 2.1.2. of Communication NBB_2022_19 of 12 July 2022.

For the other rules on the exercise of external functions, please refer to the Regulation of the NBB of 9 November 2021 and to Communication NBB_2022_19 of 12 July 2022.

 

[1]  More specifically, Article 62, § 8 of the Banking Law provides that the NBB must be notified without delay of external functions performed by directors and senior managers, with the exception of senior managers at “N-1” level (and not of functions performed by persons responsible for independent control functions). In practice, this notification requirement may be waived only for the notification of new external functions performed during the exercise of another function (via the “New elements” form). This restriction is also without prejudice to the institutions’ obligation to update the eManex platform, which is intended to provide an overview of all external functions performed by directors, senior managers and persons responsible for independent control functions.