The Board of Directors – Between Present and Future
By Andreea Lupu
In a constantly changing environment, CEC Bank reaffirms its role as a leader in innovation and social responsibility in the Romanian banking sector. With a deep commitment to financial inclusion, sustainability, and digital transformation, the bank combines tradition with cutting-edge technology to meet the diverse needs of its clients. Mirela Iovu, Vice President of CEC Bank, and Simona Andrei, Vice President of CEC Bank, emphasize the importance of solid governance, social responsibility, and strategic investments, confirming CEC Bank’s position as a cornerstone of the Romanian banking system.
This interview is part of the “Future of Boards” campaign launched by Envisia | Boards of Elite, the first business school in Romania dedicated to board members. The initiative addresses systemic topics that shape modern corporate governance. Through in-depth discussions and practical examples, the campaign highlights the critical role of boards of directors in managing the challenges companies face in a continuously changing world. Complementing this vision, Envisia | Boards of Elite, through its specialized programs, is committed to providing its members with educational opportunities, events, and informational support, thereby fostering professional excellence and personal growth.
What are the main challenges facing the board of directors, and what will be their future impact on their evolution, both generally and specifically in the banking sector? What changes are necessary in board operations to address these challenges?
One of the aspects that are becoming increasingly significant when discussing boards of directors is social responsibility. Board members are becoming more aware of issues related to their responsibility towards society.
In recent times, boards of directors have been more involved than ever in calibrating and balancing the policies of the companies they manage and in developing sustainable strategies that adhere to the best social and environmental practices, guided by corporate governance codes. Moreover, corporate social responsibility goes beyond board members or shareholders and increasingly includes all stakeholders influenced by the bank’s activities. Their interests must be considered more thoroughly in the financial institution’s decisions.
How will the profile of a board member evolve? What new skills will need to be developed and brought to the boardroom?
Each board member must continuously enhance their skills necessary to evaluate the company’s operations and policies. For this reason, all board members should have extensive experience in business and social domains.
Future trends may include regular performance evaluations and reviews conducted by board members. Another aspect could be that board members will be more frequently involved in campaigns of charitable organizations.
How can boards ensure that they make decisions that bring long-term value to the organization? How will they balance short-term and long-term objectives?
By making decisions that promote timely and balanced shareholder information on all important company matters. All interested parties must have equal and timely access to material information about the company, including its financial condition, performance, assets, and governance. The information must be factual and presented clearly and equitably.
The Board of Directors respects shareholder rights and facilitates the effective exercise of these rights. To this end, the board has the responsibility to ensure satisfactory dialogue with shareholders based on effective communication and easy access to balanced information about the bank. Moreover, shareholder participation in general meetings must be facilitated.
Even in economically developed countries, there are still companies with a flawed perception of corporate social responsibility, limiting it to charity and philanthropic actions. The truth is that corporate social responsibility is becoming one of the key factors of good corporate governance, contributing to enhancing a bank’s reputation and trust.
What is the board’s role in promoting a culture of responsibility and transparency within the organization?
A constructive organizational culture fosters trust, cooperation, and personal achievement. In such environments, employees are encouraged to take responsibility, exceed their limits, and develop their skills. Furthermore, such a culture values open communication, constructive feedback, and encourages decisions based on analytical and creative thinking.
The role of the board in promoting a culture of responsibility and transparency within the organization is that, in the medium and long term, this will lead to the formation of a strong team with motivated and dedicated employees ready to adapt to business challenges and changes. This, in turn, leads to positive organizational outcomes such as increased performance, productivity, and profitability.
How important is continuous professional training for a board member and the entire board as a team?
We believe that continuous training of board members and executive managers is necessary, both in hard skills (finance, strategy, governance) and in areas like leadership, negotiation, and communication. Companies in developed countries have made significant strides in professionalizing boards, and local entrepreneurs can learn from these good practices.
To what extent do you consider educational programs for boards important in ensuring solid governance systems and improving board efficiency?
Educational programs for boards are crucial for ensuring solid governance systems and improving board efficiency. Emerging trends include concerns such as the need for efficient and impartial boards, emphasizing governance for all stakeholders, focusing on diversity and inclusion in member recruitment, creating competitive compensation and bonus structures, and adapting to digitalization and cybersecurity.
What are the main challenges you see in implementing continuous education plans at the board level in Romania? What initiatives would be needed to professionalize the role of a board member?
Some companies have reached a development stage that requires the corporatization of their boards. This implies that board members must be capable of making increasingly complex and sometimes risky decisions.
Special emphasis should be placed on the dynamics of relationships among board members and between them and the executive leadership, as well as on the ethical aspects of their activity and the board’s responsibility towards organizational culture and corporate social responsibility.
What is CEC Bank’s competitive advantage in the Romanian banking system?
We are, I believe, the only bank in Romania that has financial inclusion as part of its mission. We support this mission by maintaining over a thousand territorial units, in many places where no other banking unit exists. We strongly believe in the success of this hybrid model, which combines human interaction with the power of technology, allowing us to be faster.
Moreover, we are one of the few banks currently undergoing a major digital transformation program. As a result of accelerated digitalization, this year, we managed to triple the number of clients who accessed banking products and services through digital flows available online and in our territorial network. CEC Bank aims to surpass 90% of banking products accessed through digital methods across all its over 1,000 branches next year. Already, in the first six months of this year, the bank saw over a 60% growth in lending to individuals, with a digital flow usage rate exceeding 70% in rural areas. With these flows, clients can secure a loan in about 30 minutes.
At the same time, sustainability remains a constant focus for CEC Bank. The bank pays attention to the continuous development of IT infrastructure and technological solutions that will help us capture and measure sustainability indicators, as well as automate data processing, preparing us to meet various ESG reporting requirements.
What are CEC Bank’s future projects according to its board-approved strategy?
CEC Bank’s strategy focuses on client needs, and the entire transformation program is developed in this direction. The Transformation Program includes the following projects:
- Implementation of CRM (Customer Relationship Management).
- FIS Quantum: a modern platform for treasury and balance sheet management with new client-dedicated functionalities.
- ERP (SAP platform): updated financial accounting platform.
- A new Core Banking System to replace the current Core Banking with a modern and robust system capable of meeting the bank’s development requirements.
- A new Data Center located in a modern facility with Data Center features, ensuring operational resilience.
CEC Bank is pursuing an organic growth strategy, with a focus on product diversification, technology and infrastructure investments, hybrid distribution models, and alternative lending. It is important to continue strengthening our market position in the face of strong dynamics and competition.
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