The Banking Supervision Department today is publishing amendments to Proper Conduct of Banking Business Directive no. 301 on the “Board of Directors” and Proper Conduct of Banking Business Directive no. 301A on the issue of “Remuneration Policy in a Banking Corporation”, with the goal of strengthening the board’s standing and independence, as well as enhancing the effectiveness of its work. As part of this, the Banking Supervision Department seeks to strengthen the standing of the Board’s Chairperson as part of the board, and to distinguish the Chairperson from the bank’s management, through emphasizing the board being a collective entity and the responsibility of each member of the board.


The amendment includes a requirement that the board is to define the functions and authorities of the Chairperson in accordance with the functions and authorities ascribed to the Chairperson by law, and such that they will not be enough to derogate or change the functions of the board and also will not reduce the functions and responsibilities of the other directors. In addition, the directive strengthens the existing principle, according to which the Chairperson’s remuneration is to be established relative to that of the other directors. In addition, the amendment makes it possible to compensate the Chairperson, even in a case of a banking corporation without a controlling core, in a manner that is appropriate to what is asked and what is required of the Chairperson, taking note, among other things, of the other various characteristics of the function compared to those of the other directors.


In July 2021, draft directives were published within the framework of the regulation and a press release on this issue was published on July 13, 2021 (LINK​). Due to the comments received, various changes were made in the draft directives, but the Banking Supervision Department’s general approach as reflected in the drafts did not change.​