ARMECONOMBANK OJSC started to implement elements of corporate governance as early as in 1998 when the "corporate governance" term was more characteristic to theoretical and scientific publications representing as a guarantee of effective development of companies.
In 1997, the process of restructuring the activities of ARMECONOMBANK OJSC was initiated by the new key shareholders of the bank. It was aimed at establishing a banking structure under international standards, which required localization and implementation of advanced international practices.
Based on practical evaluation of the international models of effective development of banks, the new management of the bank focused on the importance and perspectives of corporate governance as it restructured the current operations and reshaped the governance to accord the corporate principles.
The following measures should be mentioned among the first processes of introduction of corporate governance principles in ARMECONOMBANK OJSC:
- To increase the role of internal control, the Supervision Department of the bank was re-subordinated to the Board (1998);
- A new methodological base for the development of the bank began to take shape;
- Rules and regulations governing the functions of the bank’s managerial bodies were developed;
- The functions of the Board and executive authority were clearly differentiated;
- The order of summoning general meetings was developed and approved by the General Meeting of Shareholders with a view to clearly define the rights of shareholders to participate in the meetings and, accordingly, in the governance of the bank;
- The order of payment of dividends was developed.
Such regulated and transparent manner of operation of the bank attracted the attention and interest of large international institutional investors, and EBRD, the international institution that most actively cooperated with the bank in 2005, became a strategic shareholder with 25% plus one share.
It is commonly known that corporate governance implies not only management of the bank's operations, transparency, and protection of interests as regulated by law, but also definition of rules and principles characteristic to business ethics and practices. The first such document was adopted by the bank in 2001 and underwent further improvements thereafter. ARMECONOMBANK OJSC Code of Conduct is regularly reviewed in a prescribed manner.
As a key element of corporate governance, effective mechanisms of internal control, risk management, internal audit, and security mechanisms have been developed and implemented.
As a listed company, ARMECONOMBANK OJSC publishes information on observance of and compliance to Corporate Governance Code on its website (Annual Corporate Governance Statement) prior to or parallel with each annual meeting notice.
Along with the development of the legal framework in Armenia, the internal legal framework of the bank is constantly improving to make the existing regulatory documents more targeted at the transparent operating style of the bank, and the most important guarantee for the effective implementation of all the above-mentioned processes is the bank’s sustained and highly qualified professional team.
In order to organize the work of the Bank's Board more efficiently, the Board's commissions operate.
Address: 0002, Yerevan, Amiryan str. 23/1
ARMECONOMBANK OJSC Board