Whereas, prudent and effective corporate governance practices at banks are critical to the
proper functioning of the banking sector and the economy as a whole;

Whereas, good corporate governance plays a vital role in maintaining the safety and
soundness of the financial system while also developing accountability regime that allocates
the powers and responsibilities of a bank among the board and senior management;

Whereas, good corporate governance should lead to balanced risk-taking practices that take
into account the interests of key stakeholders;

Whereas, the National Bank of Ethiopia aims to ensure that banks are soundly and prudently
managed and directed;

Now, therefore, in accordance with Article 13(1/a), Article 14(4/b-d/ and /f/) and Article
66(2) of the Banking Business Proclamation No. 592/2008 (as Amended by Proclamation
No. 1159/2019), the National Bank of Ethiopia has issued this Directive.