Advice to E-Money and Payment Institutions on Principles of Good Governance Practices

At the end of November, the Bank of Lithuania published the new Dear CEO Letter to heads of electronic money and payment institutions. It provides observations and recommendations related to principles of good governance practices for electronic money and payment institutions (EMI, PI) to follow.

The Dear CEO Letter presents an overview of issues related to the governance system and structure of e-money and payment institutions, competencies and experience of managers and shareholders, management of conflict of interests and independence, internal control, risk management culture, and sustainability matters.

ECOVIS ProventusLaw summarizes principles of good governance practices issued by the Bank of Lithuania.

Governance System and Structure:

  • A robust governance system aligned with activities.
  • A diverse, competent, and efficient board composition.
  • Professionalism, accountability, and transparency in governance.

Competence and Experience of Managers and Shareholders

  • Clear processes for assessing managerial suitability.
  • High standards of qualification and experience.
  • Ongoing assessment and necessary actions for managerial changes.
  • Ensuring professional development of managers and shareholders by organising regular internal and external training in the area of the ongoing developments of financial markets.

Ability of Managers to Devote Sufficient Time

  • Managers of an institution should responsibly assess other professional or personal commitments about other duties and/or activities that they have or plan to take on before becoming a manager of the institution

Management of conflict of interests and independence

  • Effective conflict of interest management.
  • Separation of functions and governance bodies.
  • Independence of heads, promoting informed and independent decisions.

Internal Control

  • Internal controls ensuring sound and prudent Management.
  • Clear policies, procedures, and qualified personnel for effective control.
  • Independence of control function and effective supervision.
  • The institution is responsible for properly designing and implementing internal control measures, including where operational functions are delegated to third parties.

Risk Management Culture

  • Responsible for the determination of risk appetite and tolerance.
  • Continuous identification, assessment, and Management of risks.
  • Regular review and revision of risk measures.

Maturity and Culture

  • Maturity is the ability to prevent operational risks effectively.
  • Compliance culture with core values like fairness and transparency.

Focus on sustainability

  • EMIs and PIs should responsibly assess their performance in terms of sustainability, including environmental impact and contribution to environmental protection, as well as social responsibility and impact on society. Integrating ESG elements into an institution’s business strategy is a potential strategic advantage.

Need training for shareholders and managers on regulatory developments and best governance practices – our team of ECOVIS ProventusLaw together with partners are ready to help!

If you need consultation on complying with good governance practices, please do not hesitate to contact us.


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