Control Environment

The risks of the Bank failing to achieve its goals can only be mitigated through the presence of an effective internal control system. Effective internal control is ensured through the establishment of sound managerial oversight and a culture of control (the control environment). The control environment at the Bank is a set of standards, processes, and structures that provide the foundation for carrying out internal controls across the organization.

• The Bank’s control environment is based on the following principles:
• The Board of Directors, the Management Board, and the Bank’s leadership lead by example in demonstrating a commitment to integrity and ethical values.
• The Board of Directors maintains independence from the Management Board and oversees the development and effectiveness of the internal control system.
• The Management Board establishes the organizational structure and reporting lines and appropriately allocates the relevant authority and responsibility to achieve the Bank’s objectives.
• The Bank demonstrates its commitment to attracting, developing, and retaining qualified personnel aligned with the Bank’s goals.
• The Management Board formally assigns responsibility for the functioning of the internal control system among all stakeholders.
• Managerial oversight and the control culture reflect the general attitude, awareness, and practical actions of the Board of Directors and the Management Board aimed at establishing and ensuring the effective functioning of the internal control system.

The control environment is shaped by the Bank’s Board of Directors and Management Board through adherence to ethical principles, professional standards, and corporate governance practices. Together with their legally defined duties and responsibilities, these elements ensure an appropriate level of oversight from the Bank’s governing bodies.