The general corporate governance principles applicable at mBank, i.e. regulations and procedures determining the guidelines regarding the bank’s authorities’ actions, in particular towards stakeholders, arise from statutory regulations, in particular from the Code of Commercial Companies and Partnerships and the Banking Law Act, the provisions regulating the operation of the capital market and the rules laid down in the following documents: “Best Practice for WSE Listed Companies 2016”, “Principles of Corporate Governance for Supervised Institutions” issued by the Polish Financial Supervision Authority on July 22, 2014 and the “Code of Banking Ethics” issued by the Polish Bank Association.
In 2017, the bank applied the corporate governance principles contained in the “Best Practice for WSE Listed Companies 2016”, issued by the Warsaw Stock Exchange by way of Resolution No. 26/1413/2015 of the Supervisory Board of Giełda Papierów Wartościowych w Warszawie S.A. (the Warsaw Stock Exchange) dated October 13, 2015. These principles have been valid as of January 1, 2016.
The text of the “Best Practice for WSE Listed Companies 2016” is available on the website of the Warsaw Stock Exchange, in the section dedicated to the corporate governance of listed companies.
The “Principles of Corporate Governance for Supervised Institutions” are available on the website of the Polish Financial Supervision Authority.
From among the detailed principles of the “Best Practice for WSE Listed Companies 2016”, mBank does not apply principle no. VI.Z.2., which reads as follows: “To tie the remuneration of members of the management board and key managers to the company’s long-term business and financial goals, the period between the allocation of options or other instruments linked to the company’s shares under the incentive scheme and their exercisability should be no less than two years”. The principles for granting variable components of remuneration at mBank are compliant with the Regulation of the Minister of Development and Finance of March 6, 2017, on the Risk Management System, the Internal Control System, the Remuneration Policy as well as the Detailed Method for Banks’ Internal Capital Assessment (Journal of Laws of 2017, item 637) and EBA’s Guidelines on sound remuneration policies (EBA/GL/2015/22) of June 27, 2016, which do not provide for the premise indicated in item VI.Z.2 as a condition for granting a bonus.
In 2017, the bank started to comply with principle II.Z.8., which reads as follows: “The chair of the audit committee should meet the independence criteria referred to in principle II.Z.4.”, in connection with the changes in the composition of the Audit Committee following the appointment of a new Supervisory Board by the 30th Annual General Meeting of mBank S.A. on March 30, 2017. Previously, the bank did not comply with the above principle as the Audit Committee was chaired by a Member of the Supervisory Board who was related with the majority shareholder of mBank.
Moreover, from among all recommendations specified in the “Best Practice for WSE Listed Companies 2016”, mBank does not apply the following recommendations:
The “Principles of Corporate Governance for Supervised Institutions” cover relations with shareholders and clients, issues relating to the organisational structure, ensuring an effective and efficient internal control system, as well as the risks of business activities.
mBank has adopted the “Principles of Corporate Governance for Supervised Institutions”, excluding the principles laid down in Article 8 (4) and Article 16 (1).
The principle in Article 8 (4), which reads as follows: “A supervised institution, when justified by the number of shareholders, should strive for facilitating the participation of all shareholders in the meeting of the General Meeting of the supervised institution, among others, through ensuring the possibility of electronic active participation in the meetings of the General Meeting”, is similar to recommendation IV.R.2 of the “Best Practice for WSE Listed Companies 2016”. As a large part of mBank’s shareholders are represented at General Meetings, with a view to mitigating the risk inherent in active participation in General Meetings with the use of means of electronic communication, mBank has decided that non-compliance with the rule defined in Article 8 (4) was justified.
Likewise, mBank does not comply with the rule defined in Article 16 (1), which reads as follows: “It is proper that meetings of a management body shall be held in Polish. In case of need, necessary assistance of an interpreter should be ensured.”
The non-compliance derives from the fact that all Members of mBank’s Management Board speak fluent English. Communication without an interpreter is more effective as discussions and decisions can be made without the participation of a third party (interpreter). In some circumstances, the participation of an interpreter could make discussions at Management Board meetings more difficult or prolonged due to the complex nature of issues under discussion as well as the specialised language. Furthermore, given that Management Board meetings review information that constitutes the company’s secret, it is legitimate to limit to the bare minimum the participation of non-members of the Management Board in its meetings. At the same time, most of mBank’s Management Board Members speak Polish, which implies that the bank can be represented whenever participation of Management Board Members is required including communication in Polish without an interpreter. Furthermore, minutes of Management Board meetings as well as resolutions of mBank’s Management Board are prepared in two language versions, ensuring compliance with the provisions of Article 16 (2) of the “Principles of Corporate Governance for Supervised Institutions”.
The stand of shareholders as regards the “Principles of Corporate Governance for Supervised Institutions” was presented in resolution no. 31 of the 28th Annual General Meeting of mBank S.A. of March 30, 2015.
In the above resolution, the shareholders undertook:
Apart from the corporate governance principles, mBank has for many years complied with best banking industry practices developed by the Polish Bank Association (ZBP). The currently applicable version of the “Code of Banking Ethics” was approved at the 25th General Meeting of the Polish Bank Association held on April 18, 2013. The “Code of Banking Ethics” is a set of principles referring to banks, their employees and persons acting as intermediaries in banking activities. The “Code of Banking Ethics” includes two parts: the “Code of Best Banking Practice” and the “Code of Employee Ethics”. The “Code of Banking Ethics” is available on the website of the Polish Bank Association.
The bank’s employees apply the Code of Conduct, which establishes the standards applicable in interactions between the bank’s employees and the bank’s business partners. This is meant to contribute to mutual trust. The guidelines related to behaviour include, among others, being guided by mBank’s values, creating a sustainable corporate culture, corporate social responsibility, pursuing a responsible credit policy, treating relationships with clients in a responsible way, honesty in business relationships, applying established standards in relationships with clients and in internal relationships, avoiding conflicts of interest, responsible use of social media and simplifying communication.
It is also worth mentioning that mBank has defined behaviours which are most important from the perspective of the organisation and which facilitate achieving individual and team results as well as contributing to customer satisfaction. The model of values and behaviours applicable at the bank, which sets mBank’s work standard, is based on the following organisational values: “client-centricity”, “looking ahead”, “simplifying”, “commitment” and “professionalism”.
mBank pursues a transparent, open, and reliable information policy, which builds mutual trust and loyalty of investors. When implementing its information policy, mBank complies with requirements arising from provisions related to information confidentiality and security, which it must abide by as a public company and a supervised institution.
The main means applied by the bank in its information policy towards investors relations include:
Feedback from investors provides a basis for drawing conclusions regarding future actions in the area of investor relations, among others, in respect of the scope of information materials. mBank ensures that every group of stakeholders is treated with equal care and attention when it comes to providing information. The bank treats all groups of stock exchange stakeholders equally and aims at providing individual investors with quick access to the material information on the company which can be accessed by institutional investors. It is worth mentioning that in 2017, as part of its actions targeted at individual investors, mBank participated in the WallStreet conference in Karpacz – Poland’s biggest meeting of individual investors.
Open communication with shareholders during the General Meetings manifests itself, among others, in the following aspects: