Namibia Financial Institutions Supervisory Authority issues governance standard requiring one third independent directors and stricter board and auditor tenure limits

The Namibia Financial Institutions Supervisory Authority has issued a governance standard under the Financial Institutions and Markets Act, 2021 for regulated entities. The standard sets board-level and operational governance requirements covering ethical leadership, board composition, independence, conflicts of interest, internal controls, risk management, information technology governance, reporting and disclosure. It requires boards to include executive, non-executive and independent directors, with one-third of members independent, and requires the chairperson to be independent. The measure also formalizes director appointment procedures, mandatory induction and ongoing training, and annual performance evaluations for the board, its committees, individual directors and the principal officer. Independent directors are subject to detailed eligibility restrictions, including limits on recent employment, business relationships and family links. Non-executive directors may serve no more than three consecutive terms of up to three years each and then face a three-year cooling-off period, while external auditors may serve no more than five consecutive years unless the regulator approves otherwise and must wait at least three years before reappointment. Boards must maintain governance policies, oversee risk through a documented policy reviewed at least every three years, consider whether to establish a risk-based internal audit function, and retain accountability for outsourced functions, including information technology and other service providers. The standard states that non-compliance may trigger enforcement action under Part 6 of Chapter 10 of the Act.