Corporate governance

The Superintendencia Financiera de Colombia (the SFC) is fully committed to strengthening corporate governance in the financial system. An adequate corporate governance contributes crucially to the achievement of the objectives of stability, security and trust, promotion and development of the Colombian stock market, and financial consumer protection. This concept paper presents the approach of the SFC against government oversight of their corporate entities supervised. It includes the definition of corporate governance and the elements that compose it.

 The Colombian business sector was not immune to the evolution of good governance practices and now the country is identified as one of the greatest advances both regulatory and volunteers has been generated in recent years on the subject. These developments demonstrate that there is already an established awareness about the value added by good governance at companies and their orderly and successful.

 Of course, the financial sector has not lagged behind in this process of construction and adoption of high standards in the field. Corporate governance of financial institutions is not only an important element for increasing productivity in the sector, but a factor in controlling the levels of risk to which financial institutions are exposed. Good corporate governance practices reinforce the proper administration of the entities, decrease conflicts between stakeholders, mitigate the risks associated with management of the organization, improve the capacity for decision making, reduce the need for specialized supervision by the State and improve the risk rating agencies, among others.

Corporate governance is the system (set of rules and internal organs) by which it directs and controls the management of a legal person, either individually or within a cluster.

Corporate governance provides a framework that defines rights and responsibilities, which interact within the governing bodies of an entity that stand among the highest governing body, the board or board of directors, legal representatives and other administrators, the auditor and the relevant supervisory bodies.

Good corporate governance should provide mechanisms that ensure the existence and implementation of elements that allow a balance between the management of each organ and the control of the management through systems of checks and balances, so that decisions taken in each instance be made with an adequate level of comprehension and understanding, and according to the best interest of the entity, its shareholders and creditors and respecting the rights of financial consumers and other stakeholders.