The Basel Committee of the Bank for International Settlements (BIS), whose standards for the prudential supervision of banks are applied worldwide, recently published its revised Corporate Governance Principles. Although not legally binding, the Principles are important reference points for legislators and regulators. The revision emphasises the critical importance of effective corporate governance for the safe and sound functioning of banks and stresses the importance of risk governance as part of a bank's overall corporate governance framework. In particular, the revision was intended to increase the collective oversight and risk governance responsibilities of the board of directors (in a one-tier governance structure) or the supervisory board (in a two-tier governance structure) by means of, among other things, the "three lines of defence" model.
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