PORTUGAL Law and Practice Contributed by: Pedro Cassiano Santos, Francisca César Machado, Chen Chen and Natalia Fedorova, VdA
sound and prudent risk management, and man - agement and supervisory bodies composed of members whose reputation, professional quali - fications, independence, and availability ensure the sound and prudent management of the credit institution. In terms of corporate bodies, credit institutions in Portugal can be organised as follows: • board of directors and supervisory board; • board of directors, including a supervisory board, and statutory auditor; and • executive board of directors, general and supervisory Board, and statutory auditor. Diversity in Management and Supervisory Bodies Portuguese credit institutions must implement internal policies for the selection and evaluation of management and supervisory body members that promote diversity in the qualifications and skills necessary for these roles, setting objec - tives for the balanced representation of men and women and designing a strategy aimed at increasing the number of individuals from the underrepresented gender. Soft Law and Industry Initiatives The European Banking Authority’s Guidelines of 2 July 2021 on internal governance serve as the primary reference for the internal governance structure of credit institutions. These guidelines cover a wide range of topics to ensure the robust internal governance of credit institutions. Credit institutions that are members of the Por- tuguese Banking Association ( Associação Portu - guesa de Bancos ) must comply with the Associ - ation’s Code of Conduct, which establishes rules of conduct for banks in Portugal, particularly regarding their professional ethics standards.
Additionally, many credit institutions in Portugal are also members of the Portuguese Institute of Corporate Governance ( Instituto Português de Corporate Governance – IPCG). This Institute has a Corporate Governance Code that sets forth rules regarding: (i) a company’s relation - ship with its shareholders, stakeholders, and the community in general; (ii) the composition and functioning of the company’s corporate bodies; (iii) shareholders and general meetings; (iv) man - agement; (v) performance evaluation, remunera - tion, and appointments; (vi) internal control; and (vii) information and statutory audit of accounts. 4.2 Registration and Oversight of Senior Management Board members (and supervisory board mem - bers) are selected and appointed by the general meeting of shareholders in accordance with the Portuguese Companies Code. Potential members of the management and supervisory bodies of credit institutions are sub - ject to a suitability assessment prior to the exer - cise of their duties and throughout their entire mandate. They must always meet the require - ments of suitability, professional qualification, independence, and availability. The start of their functions is also subject to prior authorisation from Banco de Portugal. Once authorisation from Banco de Portugal has been obtained, the registration of the members of the management and supervisory bodies must be requested. This request must indicate the starting date of their functions and, in cases requiring prior authorisation, be accompanied by a copy of the minutes with the resolution appointing them. Positions which, despite not being part of the management or supervisory bodies, entail the
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