Approval for supervisory board members of a credit institution

Published: 31/1/2015 Modified: 15/3/2019
Only a person meeting the criteria prescribed by the Credit Institutions Act who has obtained a prior approval from the Croatian National Bank may be appointed member of the supervisory board of a credit institution. Listed in this document are the criteria for supervisory board members of a credit institution, the documents to be enclosed with the application for granting approval, the decision-making procedure regarding the application for granting approval and the reasons for annulment and revocation of the decision on approval to perform the function of a member of the supervisory board of a credit institution.

Criteria for the appointment of supervisory board members of a credit institution

The Croatian National Bank shall grant prior approval to perform the function of a member of a credit institution's supervisory board to a person it assesses as suitable. A person shall be considered as suitable if he/she:

  • meets the criteria laid down in Article 45 of the Credit Institutions Act and
  • ensures, in accordance with Article 35, paragraph (3) of the Credit Institutions Act, that the supervisory board collectively has sufficient knowledge, skills and experience to perform its duties independently and without undue influence from other persons, and that it has a sufficiently diversified structure.

In accordance with Article 45, paragraph (1) of the Credit Institutions Act, members of a credit institution's supervisory board shall at all times meet the following criteria:

  1. they are of good repute;
  2. they possess adequate knowledge, skills and experience required to perform their functions and, together with other supervisory board members, they meet the requirements referred to in Article 35, paragraph (3) of the Credit Institutions Act;
  3. they are not in a conflict of interest in relation to the credit institution, shareholders, supervisory board members, key function holders and senior management of the credit institution;
  4. they are able to commit sufficient time to perform their functions; and
  5. they can be appointed to the supervisory board under the provisions of the Companies Act.

The supervisory board of a credit institution shall have at least one independent member, while the supervisory board of a credit institution which is significant in terms of its size, internal organisation and the nature, scope and complexity of its activities and the supervisory board of a credit institution the securities of which are admitted to trading on a regulated market as determined by the act regulating the capital market shall have a sufficient number of independent members.

The criteria, the procedure for granting prior approval, the documentation to be enclosed with the application for granting prior approval to perform the function of a member of the supervisory board of a credit institution and the criteria for determining the independence of a member of the supervisory board and sufficient number of independent members of the supervisory board are specified by the Decision on the assessment of the suitability of the chairperson of the management board, members of the management board, members of the supervisory board and key function holders in a credit institution.

Application for granting prior approval to perform the function of a supervisory board member

The application for granting prior approval to perform the function of a member of the supervisory board of a credit institution is to be submitted by the credit institution no later than three months before the expiry of the term of office of the member of the supervisory board, for a term of office not exceeding four years.

The application is to be submitted on the form for the application for granting prior approval for the appointment of the chairperson or members of the management board or members of the supervisory board, enclosing:

  1. a decision on the appointment of a candidate for a member of the supervisory board;
  2. the results of the suitability assessment carried out by the credit institution, including the statement of grounds with information on the persons who carried out the suitability assessment shown in the form set out in Appendix 4 of the Decision on the assessment of the suitability of the chairperson of the management board, members of the management board, members of the supervisory board and key function holders in a credit institution;
  3. a certified copy of the identity card or a certified copy of the passport for foreign nationals;
  4. a certified copy of the diploma or a translation of a foreign university diploma certified by a certified court interpreter;
  5. for candidates who, at the time of application, do not perform the function of the chairperson, a member of the management or supervisory board of a credit institution in the Republic of Croatia, a certificate issued by the legal person in which the candidate has acquired the experience referred to in Article 8, paragraph (2) of the Decision on the assessment of the suitability of the chairperson of the management board, members of the management board, members of the supervisory board and key function holders in a credit institution, specifying the type of function and its position in the hierarchy, the knowledge that the candidate has acquired in that function, the nature and complexity of the candidate's previous business activities, including the organisational structure in which these activities were performed, the scope of his/her competences, decision-making powers and responsibilities and, where appropriate, the number of subordinates;
  6. a completed Questionnaire for the candidate for the chairperson or a member of the management board or a member of the supervisory board of a credit institution (Appendix 2 of the Decision on the assessment of the suitability of the chairperson of the management board, members of the management board, members of the supervisory board and key function holders in a credit institution);
  7. where available, references given by immediate superiors of the employer at least for the last three years;
  8. a statement that the candidate for a member of the supervisory board of a credit institution has not committed a criminal offence or a misdemeanour, and that no criminal or misdemeanour proceedings have been initiated against him/her;
  9. a statement by the credit institution on the existence of circumstances which might lead to a conflict of interest and the measures taken to mitigate or eliminate it shown in the form set out in Appendix 4 of the Decision on the assessment of the suitability of the chairperson of the management board, members of the management board, members of the supervisory board and key function holders in a credit institution;
  10. an excerpt from criminal history records and misdemeanour records:
    • for the nationals of the Republic of Croatia, the statement issued by a municipal court on whether criminal offence proceedings have been initiated against the candidate, not older than three months; and
    • for foreign nationals, information showing that the candidate has not been convicted of a misdemeanour, if criminal offence or misdemeanour proceedings have been initiated against the candidate and if the candidate has been convicted by a judgement with final force and effect of any of criminal offences, not older than three months, and where this is not possible, a statement to that effect; and
  11. a list of short-listed candidates or an explanation why it has not been submitted.

Decision-making procedure

In the course of decision-making procedure regarding prior approval, the Croatian National Bank may request from the candidate and the credit institution to supply additional documents or information necessary to assess the suitability of the candidate to perform the function of the supervisory board member of a credit institution.

The decision on the application for granting prior approval to perform the function of a member of the supervisory board of a credit institution is adopted by the Governor of the Croatian National Bank, within 60 days of the delivery date of a valid application. The Croatian National Bank shall issue this approval for the duration of the proposed term of office, but should it consider it appropriate, the approval may be issued for a shorter term.

A person who has been granted prior approval to perform the function of a credit institution's supervisory board member is obligated, before being reappointed to the same office with the same or another credit institution, to obtain a new prior approval from the Croatian National Bank.

Annulment and revocation of the decision

The Croatian National Bank shall revoke legal approval to perform the function of a member of a credit institution’s supervisory board:

  1. where a member of the supervisory board no longer meets the criteria for membership in the supervisory board of a credit institution referred to in Article 45 of the Credit Institutions Act;
  2. where a member of the supervisory board breaches the provisions on duties and responsibilities of supervisory board members referred to in Articles 48 and 49 of the Credit Institutions Act;
  3. where the designated person does not assume the office to which the approval relates within six months of the approval;
  4. where the term of office to which the approval relates expires, on the date of expiry of the term of office;
  5. where a member of the supervisory board obtained approval by providing false or inaccurate documentation or through false presentation of data relevant for performing the function of a member of the supervisory board.

The Croatian National Bank may revoke legal approval to perform the function of a member of the credit institution's supervisory board where conditions for early intervention in accordance with Article 235a of this Act are met.