Corporate Governance, Compliance and Banking Boards in Latvia: the Results of Survey


  • Arnis Lagzdins BA School of Business and Finance


banks, Latvia, coorporate governance, compliance, risk management


Purpose – After the recent financial crisis, Basel Committee on Banking Supervision (BCBS) and European Banking Authority (EBA) have called attention to the need to improve corporate governance of financial entities and issued new guidelines endorsed by local regulators. The purpose of the paper is to analyze how banking boards in Latvia fulfill compliance oversight function.

Design/methodology/approach – The empirical study consisted of survey and interviews with experts in compliance risk management who are the members of the Compliance Committee of the Latvian Commercial Bankers Association. To carry out the empirical research, a web-based survey was conducted from December 2011 through January 2012 to collect information about relation between compliance function and banking boards in Latvia.

Findings – The benchmarking approach has been used to compare results from banks in Latvia with similar survey in US. In general, banking boards in Latvia use the similar tools and methods to oversee compliance function as the banks in the US. The level of support to compliance function from boards differs in both countries.

Research limitations – For this paper, only banks are reviewed, which may result in an incomplete picture of compliance function in Latvia’s financial sector.

Practical implications – The results of the researh are used by the Compliance Committee of the Latvian Comercial Banking Association.

Originality/value – Latvia implemented a compliance regulatory framework in 2007. The value lies in the fact that compliance risk management has never been subject of research in Latvia before.