PERU Law and Practice Contributed by: Andrés Kuan-Veng and Luis Ernesto Marín, Rubio Leguía Normand
directors are subject to a maximum tenure of ten years. The Regulations introduce the Compensation Committee as a new mandatory board com - mittee, in addition to the Audit and Risk Com - mittees. Regarding remuneration systems, the regulations specify that companies’ compensa - tion structures must align with their business strategy and policies while avoiding potential conflicts of interest. Furthermore, the Regulations require compa - nies to identify potential conflicts of interest and implement policies and procedures for their management, monitoring and control. They must also establish systems for the timely reporting of questionable practices within their organisa - tions. 4.2 Registration and Oversight of Senior Management The Peruvian Banking Law establishes specific requirements for the registration and oversight of senior management within financial institutions. These regulations ensure that individuals in key leadership positions meet certain standards of competence and integrity. Directors’ and Senior Managers’ Designation and Regulatory Approval The Banking Law mandates that directors of financial institutions must meet both techni - cal and moral suitability requirements. These requirements include the following. • Qualifications: directors are expected to possess relevant educational backgrounds, professional experience and skills necessary for their roles. This ensures that they have the requisite knowledge to make informed
decisions that affect the financial institution’s operations. • Disqualifications: there are several disqualifi - cations (impediments) that may prevent indi - viduals from serving as directors. These could include legal issues, past financial miscon - duct, or other factors that might undermine their ability to fulfil their duties responsibly. The same suitability requirements applicable to directors extend to senior managers and execu - tives. Their appointments must be reported to the SBS within one business day of the appoint - ment. The SBS conducts a thorough assessment of these individuals, which includes evaluating their fitness and propriety through a detailed review process. This may involve: • Fitness assessments: evaluating the profes - sional qualifications, experience and expertise of the candidates. • Propriety assessments: assessing the moral character and integrity of the individuals to ensure they have a clean record and are capable of upholding the institution’s ethical standards. Screening Requirements The screening requirements for directors and senior management include the following. • Background checks: comprehensive back - ground checks are conducted to verify the information provided by the candidates, including their professional history, any previ - ous legal issues, and compliance with regula - tory standards. • Regulatory filings: financial institutions are required to submit relevant documentation to the SBS regarding the qualifications and backgrounds of their directors and senior
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