COSTA RICA Law and Practice Contributed by: Douglas Soto, Miguel Elizondo-Soto and Osvaldo Madrigal Méndez, Zurcher, Odio & Raven
for corporate governance, including the instru - ments of the Bank for International Settlements, the Basel Committee on Banking Supervision, the International Association of Insurance Super - visors, the Financial Stability Board (FSB), the International Organization of Securities Commis - sions (IOSCO) and the OECD/G20 Principles of Corporate Governance. It deals with the different characteristics and capacities of regulated insti - tutions by allowing proportionality in its applica - tion, as its rules can be adapted to the size and nature of the institution. Most public and private banks and financial institutions have their own corporate govern - ance code, which must be in accordance with the conditions and terms defined by the Regula - tion of Corporate Governance issued by SUGEF. 4.2 Registration and Oversight of Senior Management Banks are authorised to define their applicable rules for the members of the management body and senior management, and their roles and responsibilities, all according to the best inter - est of the entity. The law also requires the board of directors of an entity to have a minimum of five members. The Regulation of Corporate Governance, CONASSIF 4-16, has a more comprehensive set of governance rules covering the following:
• risk management; • audits;
• remuneration; • transparency; • subsidiary governance; and • shareholder rights.
The Regulation on Suitability of Members of the Management Body and Senior Management, CONASSIF 15-22, complements the Regulation of Corporate Governance with more specific assessment duties for the regulated entity before appointing a director and/or senior manager, including the subsequent performance assess - ment. Pursuant to this regulation, the regulated entities must approve a suitability policy and apply an assessment test for such positions, as follows. • The suitability policy must include a valuation of the following items: (a) honesty, integrity and reputation – this analysis should include at least the fol - lowing factors – (i) if the person has been convicted of a crime – special attention will be given to crimes of fraud, financial crimes or a crime under the legisla - tion relating to financial and non- financial institutions, money launder - ing and the financing of terrorism, market manipulation and the use of inside information for profit; (ii) if the person has held a key posi - tion in an organisation that has been sanctioned or has entered into insolvency, bankruptcy, liquidation or intervention while said person was in office; and (iii) if the person or entity in which
• board member duties; • board responsibilities; • board composition; • board member profiles; • nomination processes; • documentation; • board evaluations; • conflicts of interest; • committees;
they have held a key position has a pending petition for a declaration of
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