RWANDA Trends and Developments Contributed by: Molly Rwigamba, Happy Mukama, Dominic Ococ and Erick Mugisha, RR Associates
Tenure limits in the insurance business For insurers, National Bank of Rwanda issued Regula - tion Number 84/2024 of 31 October 2024 on corpo - rate governance, risk management and internal con - trol requirements for the insurance business. Article 20 requires the directors to be appointed for a term of three years, renewable only twice, with renewal sub - ject to approval by the Central Bank. In granting such approval, the Central Bank takes into account con - tinued compliance with the “fit and proper” require - ments, as well as an assessment of the director’s con - tribution to the work of the board. Tenure limit within the Capital Market Framework Within the capital market regulatory framework, Law Number 057/2021 bis of 18 September 2021 Estab - lishing the Capital Market Authority provides that members of the CMA Board serve a four-year term, renewable only once. This means that the maximum term of office is eight years. Whereas for listed companies and issuers of secu - rities offered to the public, the Capital Market Cor - porate Governance Code 2024 takes a more flexible approach: it does not impose strict term limits, but recommends that independent directors should not serve for more than nine years. Where this period is exceeded, the board must justify the continued inde - pendence of the director in the Annual Report. This is a softening relative to the Capital Market Corporate Governance Code of 2012, which recommended that directors not continue for more than six years. Regulation of Artificial Intelligence, Fintech and Digital Assets Corporate Governance Fintech and the governance of digital payments Financial technology and digital payments in Rwanda operate under the supervision of the National Bank of Rwanda, primarily through Law Number 061/2021 of 14 October 2021 governing the payment system. In this area, the central bank has issued several regula - tions, including BNR Regulation Number 74/2023 of 18 September 2023 governing payment services pro - viders. This regulation introduced a risk-based licens - ing framework, strengthened anti-money laundering and counter-terrorist financing requirements, and set governance standards for licensed providers, includ -
The National Bank of Rwanda and the Capital Mar - kets Authority have both introduced fixed and renew - able terms across the institutions they supervise. These limits create regular, structured opportunities for assessing director performance, replacing under - performing members and introducing new expertise, particularly in areas such as artificial intelligence, ESG and risk management, which are rapidly becoming new core board competencies in a well-governed financial institution. Tenure limits in the banking sector The governance structure of the National Bank of Rwanda has been reformed in line with this trend. Arti - cle 13 of Law Number 48/2017 of 23 September 2017 Governing the National Bank of Rwanda provides that, with the exception of the Governor and Deputy Governor, members of the BNR Board of Directors are appointed for a term of four years, renewable only once. This represents a significant shift from the previous framework from the repealed Law Number 55/2007 of 30 November 2007 governing the central bank of Rwanda, under which there was no limit on the number of renewals, effectively permitting indefi - nite reappointment. For other supervised banks, Article 20 of Regulation Number 01/2018 of 24 January 2018 on corporate gov - ernance for banks requires a director to be appointed for a term of three years, renewable only twice. The maximum total tenure is therefore nine years. Renewal is not automatic: it requires the approval of the BNR and is conditional on the director’s continued satisfac - tion of fit and proper requirements and on the assess - ment of their contribution to the board. Banks are further required to conduct annual board and direc - tors’ reviews covering all aspects of board structure, composition, responsibilities and relationships, and to submit compliance reports to the BNR. The similar structure of three-year terms renewable twice applies to deposit-taking microfinance institu - tions in accordance with Regulation Number 58/2023 of 27 March 2023 establishing requirements on corpo - rate governance for deposit-taking microfinance insti - tutions, where directors also serve three-year terms renewable twice.
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