Efficiency review for credit institutions
Review pursuant to Section 25d of the German Banking Act
Credit institutions are required by law to review the efficiency of their management and supervisory boards once a year. This includes a review of the competencies of the board members and the competence profile of the board as a whole. In contrast to the rules of the German Corporate Governance Code, this includes not only an efficiency review of the supervisory body, but also of the management bodies and their members by the supervisory body.
To carry out an efficiency review, the German Banking Act expressly stipulates that companies may take external advice. While the objectivity and independence of such advisors are of great benefit, this also ensures that the evaluation is carried out with the help of a proven methodology. Moreover, a review in line with Section 25d of the German Banking Act must take into account the requirements of the BaFin so that the institutions can furnish proof of the regularity of the review.
