Management and governance

Good governance forms the foundation for solid relations between shareholders, the Board of Directors, executives, employees, customers and other stakeholders, and encourages objectivity, integrity, transparency and responsibility in the management of the Bank.

Board of Directors of Landsbankinn

The Board of Directors is ultimately responsible for the Bank’s activities as provided for by law, regulations and its Articles of Association. The Board of Directors formulates the Bank’s general strategy and shall ensure that the Bank’s organisation and activities are adequate and effective at all times. The Board of Directors also monitors the Bank’s general activities and ensures that control of accounting and financial management is satisfactory. The Board of Directors is elected at the Annual General Meeting (AGM) for a one-year term and consists of 7 regular members and 2 alternates.

There are four sub-committees to the Board of Directors: The Audit Committee, the Risk Committee, the Remuneration Committee and the Strategic Development Committee. Amongst other duties, the committees prepare the Board’s discussion of certain aspects of the Bank's activities and follow up on related matters.

More information about the Board of Directors

Helga Björk Eiríksdóttir

Chairman

Berglind Svavarsdóttir

Vice-chairman

Einar Thór Bjarnason

Board member

Guðbrandur Sigurðsson

Board member

Sigríður Benediktsdóttir

Board member

Thorvaldur Jacobsen

Board member

Alternates to the Board of Directors are Guðrún Ó. Blöndal (from March 2018) and Sigurður Jón Björnsson (from April 2019).

Hersir Sigurgeirsson resigned from the Board of Directors in November 2020 as he started work on new projects he considered incompatible with continued directorship.

Executive Board

The Executive Board is comprised of the CEO and managing directors of all divisions. The Bank’s CEO is responsible for the Bank’s day-to-day operations and is authorised to take decisions on all matters not entrusted to others by law, the Bank’s Articles of Association or decisions by the Board of Directors. The CEO shall ensure that the Bank's operation complies with law, regulations and the Articles of Associations, and with Board decisions. She shall ensure that the Bank’s accounting complies with law and good business practice and that handling of the Bank’s assets is secure.

More information about the Executive Board

Lilja Björk Einarsdóttir

Chief Executive Officer

Arinbjörn Ólafsson

Managing Director of Information Technology

Árni Thór Thorbjörnsson

Managing Director of Corporate Banking

Helgi Teitur Helgason

Managing Director of Personal Banking

Hrefna Ösp Sigfinnsdóttir

Managing Director of Corporate Banking

Hreiðar Bjarnason

Managing Director of Finance & Operations

Perla Ösp Ásgeirsdóttir

Managing Director of Risk Management
Kristín Baldursdóttir

Kristín Baldursdóttir

Chief Audit Executive of Landsbankinn
Þórður Örlygsson

Thórdur Örlygsson

Compliance Officer of Landsbankinn

Corporate Governance Statement

Landsbankinn complies with recognised guidelines on corporate governance and publishes an annual statement on its governance practices in its annual report, including information on the Bank’s compliance with such guidelines.

In August 2020, Stjórnvísi renewed the recognition of Landsbankinn as a model of corporate governance for the period 2019-2020 based on a review undertaken by external advisors of the Bank's governance practices in March 2020.

Organisation of Landsbankinn

Landsbankinn’s organisation aims to ensure solid and effective operation while creating opportunities for successful collaboration between departments and groups. Emphasis is placed on ensuring that employees can cooperate on projects across departments and divisions, sharing and enjoying the benefits of diverse expertise. We work as a team, guided by the interests and satisfaction of our customers. Changes were made to the Bank’s organisational structure in 2020, to sharpen the roles of its various divisions and encourage internal collaboration. These changes also aimed to enhance asset management and the division formerly called Markets is now Asset Management & Capital Markets.

Personal

Personal Banking tends to financial services for private individuals and small and medium-sized enterprises in rural Iceland, in close cooperation with Corporate Banking. The focus is on providing first-rate service based on utilisation of the Bank’s data and that customers can both seek advice and tend to their own business through digital service channels, as well as in the Bank’s branches.

Corporate

Service and financing of corporates, municipalities and institutions lies with the Corporate Banking division. We are sharpening our focus on digital service, especially for small and medium-sized enterprises, and self-service solutions. Specialised account managers attend to the needs of companies and legal entities in all sectors. Corporate Finance is part of Corporate Banking and provides, among other services, comprehensive and professional advice on the purchase, sale and merger of companies.

Asset Management & Capital Markets

Asset Management & Capital Markets offers services in securities brokerage, FX and derivatives to institutional investors and larger customers. The division provides extensive services in the fields of private banking and asset management for individuals, companies and institutional investors. The division was previously called Markets. With organisational changes that took effect in late 2020, its name was changed to Asset Management & Capital Markets to better reflect its role. Emphasis is placed on personal service, responsible advice and informed decisions.

Finance & Operations

The Bank’s funding, bond issuance, market making and treasury functions all fall under the scope of the Finance & Operations division. Settlement, accounting and business plans are also under Finance & Operations, along with loan administration and transaction services, and management of the Bank’s property.

Information Technology (IT)

The IT division is responsible for the operation, security and development of digital infrastructure and services. The activities of IT are based on multidisciplinary teams and collaboration with the Bank’s other units in order to provide and develop first-rate tech solutions and digital services. There is a strong focus on leveraging data in all levels of the Bank’s operation and to ensure that the Bank continues to lead the way in utilising information technology in the domestic financial market.

Risk Management

Risk Management is responsible for the effectiveness of the Group’s risk management framework. The division is also responsible for information disclosure on risk exposure to various departments and units within the Bank, and external regulators.

Five departments operate across the Bank

In addition, there are five departments that operate across the Bank’s divisions, directly under the CEO, along with her staff. These are Human Resources, Marketing & Public Relations and Economic Research, collectively referred to as Community, and Compliance and Legal Services.

Internal Audit

Internal Audit is an independent and autonomous function directly responsible to the Board of Directors. The role of Internal Audit is to improve and protect the Bank’s value with risk-focused and objective verification, consultation and insight. Internal Audit evaluates and improves the effectiveness of risk management, control measures and governance processes through systematic and disciplined practices.

Clear policy on sale of assets

Landsbankinn has adopted a clear policy on the sale of assets, intended to promote transparency and credibility in the sale of assets and build confidence in the Bank. The policy forms a foundation on which to build quality internal governance procedures for the sale of assets and to limit the operational and reputational risk such sale may entail. Assets are sold on commercial grounds, so that a fair price is obtained for the assets.

Assets sold in 2020*

In 2020, Landsbankinn sold 496 appropriated assets, two vehicles, shareholdings in two unlisted companies and 108 pieces of art.** The total sales value of these assets amounted to ISK 4,478 million. All these assets were sold in an open sale process.

Assets sold in 2020NumberTotal sales value
Residential apartments9350,100,000
Commercial housing150,000.000
Building sites754,650,000
Land1215,000,000
Building sites for cottages2332,100,000
Vehicles and equipment454447,626,929
Shares in unlisted companies23,285,210,000
Other11143,613,200
Total6084,478,300,129
*Securities and other financial instruments listed for trade on a registered market are sold on the market and that process is considered an open sale process. Such transactions are not included in the table above.

**The Bank owns around 2,200 pieces of art, mainly paintings, but also ceramic art, reproductions, photographs and more. In 2009, the Ministry of Education, Science and Culture commissioned a professional valuation of the Bank’s collection. It was suggested that pieces in category I would become public property, that category II pieces should not be sold without consulting with the National Gallery of Iceland and that category III pieces would be offered on loan to cultural institutions. Other pieces were marked as uncategorised and the Bank was made free to dispose of them without any conditions. Since the valuation, pieces owned by savings banks that merged with Landsbankinn have been added to the collection and undergone a similar appraisal. Around 1600 pieces are valued as uncategorised and only such pieces have been or will be sold. The sale value of the pieces sold in 2020 totalled ISK 5.6 million, having regard for sales commissions. Sale took place via open sale process (online auction).

Assets for sale at year-end 2020

A total of 368 assets appropriated by the Bank were held for sale as at 31 December 2020. Their book value was around 991 milljónir króna. In addition, four real estate properties, previously Bank premises, were listed for sale at year-end 2020.

At year-end 2020, sale processes for holdings in 11 unlisted companies were on-going. These holdings are variously owned by Landsbankinn or Hömlur fyrirtæki ehf., a subsidiary of the Bank. Information about these holdings have been disclosed on the Bank's website.

Appropriated assets listed for sale at year-end 2020
Residential aparments 4
Commercial housing 1
Building sites for residential apartments and commercial housing 23
Building sites for cottages 211
Land 5
Vehicles and equipment 124
Total 368

More robust measures to prevent money laundering

In 2020, we continued to build our defences to prevent money laundering and terrorist financing. The Bank’s control systems were enhanced, processes strengthened even further and work to develop digital solutions to enable customers to complete due diligence online continued.

A risk assessment was carried out on Landsbankinn’s operation, its customers, and products and distribution channels that employees look to during control and decision-making. At the same time, the Board of Directors approved a new policy on measures to combat money laundering and terrorist financing.

Monitoring of international payments was enhanced in 2020 for the purpose of mitigating even further the risk of money laundering and terrorist financing, corruption and bribery. Landsbankinn has set itself a policy against bribery and corruption that is in the implementation phase.

In 2020, the Financial Action Task Force (FATF), removed Iceland from its list of countries that have declared their willingness to implement an action plan for remedy of the situation. The impact on the Bank’s operation and services was limited, with the Bank benefiting from solid business relations with non-domestic banks, and the short time it took for Icelandic authorities to have the country removed from the list.

Emphasis on data protection

As before, we emphasise responsible and secure handling of the personal data of customers, employees and others in our operation and comply with laws on data protection and the processing of personal data, and the EU General Data Protection Regulation (GDPR). The Bank's Privacy Policy was updated in 2020 and we will continue to update and improve processes, rules and information in the field of personal data protection, including in electronic solutions, with an eye to safeguarding customer rights.

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