The International Monetary Fund (IMF) confirms that they support the increase of non-executive members on the Board of the National Bank of Georgia (NBG).
The point is that Paata Kvizhinadze, chairman of the Finance and Budget Committee at the Parliament of Georgia told BMGTV, that the number of members on the NBG board might increase to 11 due to the IMF's will.
The IMF did not directly respond to BMG's question on the increase of non-executive positions on the NBG Board but explained why it was better to add non-executive positions on the board.
According to the Organic Law on the National Bank of Georgia (NBG), the board consists of 9 members, but currently, there are 5 members on the board. Of which, three are executives (Vice-Presidents: Natia Turnava, Natia Mikabadze and Eka Galdava) and only two are non-executive members - Nana Keinishvili and Teimuraz Khomerik.
According to IMF, the executive majority weakens the independence of the board in performing its oversight role.
"Although the NBG governing board consists of five non-executive and four executive positions, vacancies among the non-executive positions have resulted in extended periods where the board has operated with an executive majority. An executive majority weakens the independence of the board in performing its oversight role.
One way to try to ensure a non-executive majority is to add two more non-executive positions and increase the board quorum from five to nine. In this way, the board would have a non-executive majority when making decisions, even if all executives were present and two non-executive positions were vacant. These measures should be complemented by a requirement to fill, within a few months, any board vacancies with independent and qualified members", - Andrew Jewell, Resident Representative for Georgia at the International Monetary Fund told BMG.
