Corporate governance

ARARATBANK 's corporate governance is an integral system of guidelines, standards and rules to regulate the relations between the shareholders, Board of Directors, Executive Board and stakeholders of the Bank.

ARARATBANK has set up its corporate governance system and continues to work towards its enhancement guided by the world’s best practices and international standards.

ARARATBANK believes that good corporate governance is a keystone to the continued and sustainable development of the Bank and attraction of potential investments as well as an additional security for its partners and investors.

Our corporate governance standards allow to ensure a fair balance between the interests of our shareholders, investors and customers, building higher consumer confidence towards the Bank and positively influencing its further development.

We believe that holding leading positions in the Armenian banking system obliges the bank not only to deliver high quality service but also to mainstream optimum standards in its business culture, social responsibility and corporate governance practices.

ARARATBANK's corporate governance guidelines

Corporate governance includes general management of the Bank's operations and is exercised by the General Meeting of Shareholders and the Board of Directors through the Executive Body of the Bank.

ARARATBANK's management bodies ultimately responsible for a strong and sustainable corporate culture operate within the prescribed guidelines:

• Shareholder's right to participate in the Bank’s governance process
• Shareholder's right to nominate candidates to the Board
• Board Remuneration Policy
• Shareholder's right to receive dividends
• Equal treatment for shareholders of the same class
• Protection of minority shareholders from the abuse of power by majority shareholders or shareholders with a controlling interest
• Development of the Bank under the guidance of an effective and constructive Board able to play its role of contributing to the long-term sustainable success of the Bank, creating value for shareholders and delivering support to the Bank's stakeholders
• Establishment of corporate values that create expectations for running the entire business based on legitimate ethical considerations and exercise of oversight over the application of those values by senior top management and other employees
• Transparent formation of the Board and level of its professionalism
• Proper risk management
• Ensuring unhindered and transparent activities of the Internal Audit Department, Compliance Assurance Group and Risk Management Department

ARARATBANK's corporate governance bodies 

The Bank's corporate governance bodies are:
• General Meeting of Shareholders,
• Board of Directors, 
• Executive Body – the Chief Executive Officer (Chairman of the Executive Board) and the Executive Board.

ARARATBANK's General Meeting of Shareholders is the supreme body of the Bank’s corporate governance. The following parties are entitled to participate in the General Meeting of Shareholders:
• Owners of the Bank's common (ordinary) shares with voting rights equaling one vote per share, as well as nominee shareholders, if they produce documents confirming the names of shareholders they represent and the number of shares owned by the shareholders,
• Members of the Board of Directors, members of the Executive Body with an advisory vote,
• Members of the Internal Audit Department in an observer capacity,
• External auditor of the Bank in an observer capacity (if his/her opinion report is included in the meeting agenda),
• Representatives of the Central Bank in an observer capacity,
• Other managers and employees of the Bank based on the decision of the Board of Directors.

Annual General Meeting of Shareholders of the Bank

The Annual General Meeting of Shareholders of the Bank is convened within a 6-month period following the end of the fiscal year.
Other General Meetings held in addition to Annual General Meetings are considered Extraordinary.

Board of Directors
The Board of Directors is in charge of the general management of the Bank's operations and may consist of at least 5 and no more than 15 members. Board Members are elected at the Annual General Meeting of Shareholders by shareholders present in person and, in the event of early termination of powers of a Board member – at the Extraordinary Meeting by shareholders present in person.

Citizens of the Republic of Armenia or foreign citizens who meet the requirements specified by the laws of the Republic of Armenia and regulations of the Central Bank are entitled to membership in the Board of Directors. Members of the Board of Directors should be unrelated. Members of the Board of Directors and members of the Executive Body may not be related to each other. Board members shall serve a term of 1 year and shall be immediately eligible for reelection.

The Chairman of the Board of Directors is elected by the Board from among its members.
To enhance the efficiency of its activities, the Board of Directors may set up committees, which may include Board members and other managers or employees of the Bank. Board committee decisions are advisory in nature.

Board members are expected to have complementary competencies, education, expertise and possess the knowledge relevant to the implementation of the Bank's strategy. The Bank shall ensure the diversity and independence of the composition of the Board membership for ensuring the effectiveness of the Board's activities and an objective and balanced decision-making process.

Official evaluation of the activities of the Chairman and members of the Board, as well as of the committees attached to the Board shall be implemented on an annual basis. Each member of the Board shall also undertake an annual self-evaluation and shall report on his/her annual work results.

The day-to-day operations of the Bank are managed by the Executive Body of the Bank - the Executive Board and the Chief Executive Officer. Members of the Executive Board are appointed by the Board of Directors. The Executive Board ex-officio includes Chief Executive Officer, Deputy Chief Executive Officers, Chief Accountant.

The Board, at its meeting, shall examine the reports of the Internal Audit Department, Chief Executive Officer and Chief Accountant of the Bank at least once a quarter, in accordance with the procedure and manner specified by the Board of Directors.

On an annual basis, the Board shall evaluate the performance of the Executive Body - both of individual members of the executive team and of the Executive Board as a collegial body - with due regard to the professional competence of its members and their ability to cooperate with each other and manage the human resources and risks inherent in the Bank’s operation.
The Head and members of the Internal Audit Department of the Bank are appointed by the Board of Directors. Members of managerial bodies of the Bank, other managers and employees of the Bank as well as persons related to the Executive Body are not entitled to membership in the Internal Audit.

As of 26․11.2024, there are 1084 employees in ARARATBANK.

Code of Corporate Governance