SWIFT is a cooperative society under Belgian law and is owned and controlled by its shareholders. SWIFT shareholders elect a Board composed of 25 independent Directors which governs the Company and oversees management. The Executive Committee is a group of full-time employees led by the Chief Executive Officer.
Board Director nominations
SWIFT’s Board composition is designed to reflect usage of SWIFT messaging services, ensure SWIFT’s global relevance, support its international reach and uphold its strict neutrality.
Each nation’s usage of SWIFT’s messaging services determines both SWIFT shareholding allocations and the number of Board Directors that each nation is entitled to.
SWIFT shareholdings are determined by a set formula, and the nomination process and the composition of the Board follow rules set out in SWIFT’s by-laws. Shares are reallocated based on the financial contribution of shareholders for network based services. This ensures that the composition of the Board reflects SWIFT’s shareholders around the world. Depending on a nation’s shareholder ranking, it may propose one or two Directors to the Board or join other nations to collectively propose a Director:
- For each of the first six nations ranked by number of shares, the shareholders of each nation may collectively propose two Directors for election. The number of Directors proposed in this way must not exceed 12.
- For each of the ten following nations ranked by number of shares, the shareholders of each nation may collectively propose one Director for election. The number of Directors proposed in this way must not exceed 10.
- The shareholders of those nations which do not qualify under 1. or 2. above may join the shareholders of one or more other nations to propose a Director for election. The number of Directors proposed in this way must not exceed 3.
The total number of Directors cannot exceed 25.
Once the proposed Director nominees have been vetted, they are elected as Board Directors by SWIFT shareholders at the Annual General Meeting for a renewable three-year term. Every year the Board elects a Chairman and a Deputy Chairman from among its members. It meets at least four times a year.
Members of the Board do not receive any remuneration from SWIFT. They are reimbursed for the travel costs incurred in the performance of their mandate. SWIFT reimburses the employer of the Chairman of the Board for the share of the Chairman’s payroll and related costs that represent the portion of the time dedicated to SWIFT.
The Board has seven committees. The Committees provide strategic guidance to the Board and the Executive Committee and review progress on projects in their respective areas.
- The Audit and Finance Committee (AFC) is the oversight body for the audit process of SWIFT’s operations and related internal controls. It commits to applying best practice for Audit Committees to ensure best governance and oversight in the following areas:
- Accounting, financial reporting and control
- Legal and regulatory oversight
- Budget, finance and financial long term planning
- Ethics programmes
- Risk management (in cooperation with the Franchise Risk Committee (FRC))
- Audit oversight
The AFC meets at least four times per year with the CEO, CFO, General Counsel and the Chief Auditor, or their pre-approved delegates.
The AFC may request the presence of any member of SWIFT staff at its discretion. External auditors are present when their annual statements/opinions are discussed and whenever the AFC deems appropriate.
- The Franchise Risk Committee (FRC) assists the Board in its oversight of the Company’s management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks. The FRC’s role includes oversight of risk management of SWIFT. The FRC coordinates with the Chairs of the AFC and TPC, and focuses on risks not covered by those committees. The FRC is chaired by the Chairman of the Board, and includes the Vice- Chairman and the Chairs of the AFC, TPC and BSC. The Committee meets at least three times a year, out of the normal Board cycle.
- The Human Resources Committee (HRC) oversees executive compensation. It assesses the Company’s performance and decides on the remuneration packages for members of the Executive Committee and other key executives. It monitors employee compensation and benefits programmes, including the provisioning and funding of the pension plans. It also approves appointments to the Executive Committee and assists in the development of the organisation, including succession planning. The Board Chairman and Deputy Chairman are routinely members of the HRC, which meets at least four times per year with the CEO, the Head of Human Resources and the CFO on financial and performance measures. The HRC has delegated powers from the Board in these matters. The HRC also meets without SWIFT executives several times a year.
- The Technology & Production Committee (TPC) covers technology and production developments.
- The Banking & Payments Committee (BPC) and the SWIFT Securities Committee (SSC) focus on segment specific developments, while the Banking Services Committee (BSC) focuses on Standards, Data and APIs (principles of business architecture).
SWIFT’s Chief Auditor has a dual reporting line: a direct functional reporting line to the Chair of the AFC and also a direct administrative reporting line to the CEO. Given the sensitivity of external auditors performing consultancy work for management, the AFC annually reviews spending and trends related to external audit fi rms. To ensure objectivity, the mandates of the external auditors, as well as their remuneration, are approved by the AFC.
Two mandates for external audit:
- Ernst & Young, Brussels has held the Financial Audit mandate since June 2000. Their mandate was renewed in June 2015 and runs to June 2018. Their financial Audit Report can be found in the 2016 Consolidated Financial Statements.
- PwC, London has held the Security Audit mandate since September 2003. In 2016 their mandate for third-party assurance reporting (ISAE 3000) was renewed for three years, to end in 2019. For the 2016 calendar year, SWIFT is providing standalone ISAE 3000 Type 2 reports for SWIFTNet and FIN, T2S and Alliance Lite2. Each report includes PwC’s opinion on the design adequacy and operating effectiveness of the control activities that help achieve the control objectives in the areas of risk management, security management, technology management, resilience and user communication (in line with CMPIIOSCO’s Expectations for Critical Service Providers). ISAE 3000 is an international standard enabling service providers, such as SWIFT, to give independent assurance on their processes and controls to their customers and their auditors. The ISAE 3000 reports for SWIFTNet and FIN and Alliance Lite2 are made available to shareholding institutions or registered SWIFT users on request. Click here to request an electronic copy of SWIFT's ISAE 3000 reports. The ISAE 3000 report for T2S is restricted to the Eurosystem and T2S Directly Connected Actors.
SWIFT maintains an open and constructive dialogue with its oversight authorities. SWIFT is overseen because of its importance to the smooth functioning of the worldwide fi nancial system, in its role as provider of messaging services. SWIFT is overseen by the central banks of the G-10 countries. Under an arrangement with the G-10 central banks, the National Bank of Belgium, the central bank of the country in which SWIFT’s headquarters is located, acts as lead overseer. In 2012 this framework was reviewed and a SWIFT Oversight Forum was established, through which information sharing on SWIFT oversight activities was expanded to a larger group of central banks. The issues to be discussed may include the five High Level Expectations that relate to risk identification and management, information security, reliability and resilience, technology planning, and communication with users.
SWIFT’s National Member Groups and National User Groups help to provide a coherent global focus by ensuring a timely and accurate two-way flow of information between SWIFT and its users. The National Member Groups comprise all SWIFT shareholders from a nation, and propose candidates for election to the SWIFT Board of Directors. They act in a consultative capacity to the Board and Management, and serve the interests of their nation’s shareholders by coordinating their views. Each National Member Group is chaired by a representative who is elected by the SWIFT shareholders of that nation. National User Groups comprise all SWIFT users from a nation and act as a forum for planning and coordinating operational activities. Each National User Group is chaired by a representative who is a prime line of communication between the national user community and SWIFT.