A court has strongly criticised Bank of Valletta for paying “lip service” to EU law by allowing the company’s directors to assess each other’s suitability to contest the board of directors election, rather than the test being carried out by an independent committee.

George Portanier – who has served on BOV’s board of directors since 1992 –opened a court case after he was deemed by his fellow directors to no longer be suitable to contest the post following a self-assessment exercise by the board of directors.

Madam Justice Jacqueline Padovani Grima noted that instead of having a nomination committee independent from the board of directors, chairman John Cassar White had decided to draft a questionnaire so that directors could assess themselves and other candidates on their suitability to re-contest the posts.
Such a procedure enabled the directors themselves to decide who to exclude from contesting the elections for directorship.

The court observed that if a serving director did not get along with a particular person, the directors could bar that person from contesting.

This, the court said, was the precise “antithesis” of the European Banking Authority guidelines because it precluded transparency.

Minutes of a board meeting held on 25 September – the day the results of the questionnaires were released – showed that Mr Cassar White himself acknowledged that better procedures needed to be put in place.

The judge noted that by eliminating Mr Portanier from the running, the board of directors had effectively negated the need for an election as the amount of available posts tallied with the amount of candidates for those same posts.

The court accepted Mr Portanier's request that BOV nullifies the self-assessment carried out by the directors.

BANK SAYS IT FOLLOWED BANKING SUPERVISORS' INSTRUCTIONS

In a reaction, Bank of Valletta said it had followed Bank of Valletta followed the Banking Supervisors' instructions on directors' suitability assessment. 

"As from this year, the bank like other banks being supervised by the ECB was instructed by the Banking Supervisors to implement changes in the way the directors of the bank are assessed," the bank said. The changes were introduced in Maltese law earlier this year. 

See the BOV statement in full on pdf below.