The Bank applied the methodology for managing conflicts of interest that makes it possible to identify and assess compliance risk connected with a specific conflict, choose appropriate measures to prevent or minimize negative consequences, eliminate conflicts of interest and monitor them.
Ethics and corporate governance
Conflict of Interest Management
GRI[
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GRI[
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2-15
The current Pekao Group conflict of interest management policy (hereinafter: “Policy”) sets out the principles for managing conflicts of interest and defines the circumstances that cause or may cause conflicts of interest in the Bank’s operations. The Policy should be applied together with the detailed rules of conduct set forth in the Regulations for Managing Conflicts of Interest in the Pekao Group (hereinafter: “Regulations”).
The Bank defines circumstances in which conflicts of interest are most frequently identified, taking into consideration both areas potentially at risk of a conflict of interest and types of relations concerning the Bank, employees, entities from the Pekao Group and third parties, especially customers and trading partners of the Bank.
The identified types of conflicts of interest and the measures to manage them that should be applied by Employees identifying conflicts of interest are included in the Conflicts of Interest Matrix.
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Its organizational structure and consist in:
- establishing information barriers (Chinese walls),
- splitting duties by separating various business units of the Bank and Group entities in physical and competence terms in the case of actions that can cause a conflict of interest, including in particular the separation of the Bank’s business units,
- implementing structural independence by allocating defined competences, method description, types of actions and operations to each business unit of the Bank to let it make independent decision and supervise the Bank’s employees,
- preventing simultaneous or consecutive involvement of the Bank’s employees in service provision if such involvement can adversely affect the effective management of conflicts of interest.
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Internal regulations providing for remuneration rules in relation to the Bank’s employees by defining:
- principles for remuneration that do not have a negative impact on the stakeholder’s interest and eliminate direct dependencies between a variable part of remuneration and business goals,
- entering into proprietary transactions, putting in place procedures to prevent abuse associated with the execution of own transactions on financial instruments by establishing limitations to such transactions in relation to an employee or the Bank,
- transferring the Bank’s employees to other jobs if a reporting relationship arises between partners or relatives,
- Introducing and adhering to ethics and corporate culture by employees and conducting appropriate training.
If, despite of the application of all possible measures to manage conflicts of interest, there is a risk that the interests of the stakeholder to which the conflict refers to will be violated or there is a significant reputation risk, the conflict of interest is disclosed to the stakeholder. The disclosure always includes the description of the underlying conflict of interest adjusted to the stakeholder’s knowledge and experience, which enables the stakeholder to make a well-informed decision concerning a specific service, as well as information about measures applied by the Bank to manage the conflict of interest and limit related risks. The disclosure of the conflict of interest does not release the Bank from its obligation to apply all possible measures connected with the management of conflicts of interest.
The Bank ensures public disclosure of relevant information regarding the Policy adopted at the Bank. These disclosures, in accordance with the Regulations, should include information on how the Bank manages material conflicts of interest and conflicts that could arise due to the Bank’s membership in a capital group or the Bank’s transactions with other entities in the capital group. Public disclosure may not include protected information: constituting personal data, bank secrecy or business secrecy. The above information, as well as information on the existence of such potential conflicts at the Bank and their extent, should also be reported to the Polish Financial Supervision Authority. In addition, with regard to potential conflicts of interest arising from the existence of controlling shareholders, the Bank has and applies the regulation Principles of Conduct with respect to disclosure obligations related to the acquisition or disposal of significant blocks of shares.
Conflict of interest management training is mandatory training for all Bank employees and includes new employees.