Sunday, 07 November 2010 17:19
In a bid to address possible fraud and collusion in family-controlled banks, the Bangko Sentral ng Pilipinas (BSP) has rationalized rules on officer positions within the second degree of consanguinity.
In a statement, BSP Governor Amando Tetangco Jr. said the revised rules particularly “focus on prohibition to those officerships involving conflicting responsibilities and where the check-and-balance mechanism will likely be eroded.”
Second degree relatives are not allowed to have positions at the same level of a specific function like decision-making and senior management namely chairman, president, chief executive officer (CEO), chief operating officer (COO), general manager, and chief financial officer (CFO) other than the treasurer or controller.
Other positions included in the new rules are those involved with treasury function like treasurer and vice president-treasury; record-keeping and financial reporting such as controller and chief accountant; safekeeping of assets like chief cashier.
Also, those involved in risk management function like chief risk officer, compliance function like compliance officer, and internal audit function like internal auditor.
Tetangco, on the other hand, said “the prohibition shall not apply to any of the said positions within the same category.”
“Thus, a relative within the second degree of consanguinity or affinity of any person holding the position of Chairman is not disqualified from holding the position of President, CEO, COO, General Manager, or CFO other than the Treasurer or Controller,” he said.
“In the case of bank branches, the prohibition against related officership applies to the positions of Manager, Cashier, and Accountant,” he also said.
Tetangco cited that the new rules regarding the segregation of duties among bank officers was made to prevent the possibility of abuse of power “which may result in poor governance if unchecked or unrestrained.”
“At the same time, the revised rules allow enough management flexibility so as not to hamper succession planning especially in family-controlled banks,” he added. (PNA/ PIA ZC).
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