Opening speech
Dr. Joseph Torbey
Chairman
Association of Banks in Lebanon
Corporate Governance
Institute of International Finance
Le Bristol - Beirut
21/3/2012
His Excellency Mr. Riad Salameh, Governor of the Central Bank of Lebanon
Mr. George Abed, Senior Counselor, International Institute of Finance, IIF
Excellencies, Presidents, Board Members, General Managers and distinguished guests
Ladies and Gentlemen,
I am very pleased to welcome you all today to the Corporate Governance Conference, organized in collaboration with the International Institute of Finance (IIF) and our Association of Banks in Lebanon. I also welcome His Excellency Mr. Riad Salameh, Governor of the Central Bank of Lebanon, Dr. Usama Mikdashi, Chairman of the Lebanese Banking Control Commission, as well as all distinguished attendees and eminent international speakers from the US and Europe, who came to share with us their expertise in this field.
Ladies and Gentlemen,
In a context where increasing complexity and uncertainty have become essential characteristics of the business environment, the banking sector in Lebanon together with the Lebanese banking regulatory and supervisory authorities remain driven by the same firm commitment of keeping Lebanon an eminent financial center in the Middle East.
Drawing on lessons learned following the global financial crisis, and given the important role of our resilient Lebanese banking sector which continues to be the backbone of the national economy, the Association of Banks in Lebanon issued in 2011 the “Corporate Governance Guidelines for Banks Operating in Lebanon” based on international best practices, namely those publications issued by the Basel Committee on Banking Supervision, and publications of the International Accounting Standard’s Board (IAS and IFRS).
The various financial crises underscored how insufficient attention to fundamental corporate governance concepts can have devastating effects on an institution and its continued viability. The obvious lesson is that banks need to improve their corporate governance practices and supervisors must ensure that sound corporate governance principles are thoroughly and consistently implemented.
ABL Corporate Governance Guidelines involve, as you well know, a set of relationships between the Bank’s management, its Board, its shareholders, and other stakeholders, with a clear definition of powers and responsibilities of each of them. ABL Guidelines also cover in details the Role of the Board, which includes approving and overseeing the implementation of the bank's risk strategy taking into account the bank's long-term financial interests and safety; Guidelines also highlight the importance of an independent risk management and audit functions, with sufficient authority and resources. The principles also stress the importance of the Board's active oversight of the compensation system's design and operation.
Each bank operating in Lebanon is required to produce its own Corporate Governance Code according to its particular needs and principles, in a manner consistent with applicable national Laws, such as the Code of Commerce, the Code of Money and Credit, and the regulations issued by the Central Bank and the Banking Control Commission of Lebanon. Careful implementation of these principles by banks, along with rigorous supervisory review and follow-ups will enhance banks safety and soundness as well as the stability of the financial sector in Lebanon, so much needed in the current conjuncture.
Over the coming days of our Corporate Governance Conference organized with the IIF, our distinguished speakers and participants will focus on the roles of audit and risk committees of the Board, in view of creating accountability and protecting investors' best interests.
I wish you all a fruitful and most interesting conference and wish to welcome again IIF and our speakers to Beirut.
Thank you
