How to Pass the BoN Fit and Proper Assessment for Directors in Namibia

Learn how to prepare for the BoN fit and proper assessment for directors in Namibia, including fit and proper criteria, required documentation, board requirements, financial soundness, integrity and Bank of Namibia regulatory requirements.

Becoming a director of a banking institution in Namibia involves more than accepting a board appointment. The Bank of Namibia (BoN) applies corporate governance and fitness and probity requirements to people who occupy positions of authority within banking institutions and controlling companies.

The regulatory framework includes BID 1, the Determination on the Appointment, Duties and Responsibilities of Directors, Principal Officers and Executive Officers of Banking Institutions and Controlling Companies. The Bank of Namibia lists the determination among its current determinations.

A successful fit and proper assessment therefore depends on more than having an impressive CV. The candidate must be able to demonstrate appropriate integrity, competence, experience, financial soundness and suitability for the responsibilities attached to the position.

This guide explains the main fit and proper requirements, the documents that may be required, the issues that can affect an assessment and practical steps candidates can take when preparing their submission.

For broader regulatory information, candidates can also review these Bank of Namibia registration guides.

What Is the BoN Fit and Proper Test?

The fit and proper test is a regulatory assessment used to determine whether an individual is suitable to hold a position of responsibility within a regulated banking institution or controlling company.

The BoN’s framework is intended to ensure that people responsible for directing and managing banking institutions have the qualities, knowledge, experience and integrity necessary to discharge their responsibilities properly.

The current regulatory framework distinguishes between different positions, including:

• Directors
• Independent directors
• Principal officers
• Executive officers
• Other senior management positions
• Substantial shareholders and prospective substantial shareholders

The BoN’s 2023 communication on the revised corporate governance determination states that the framework is intended to ensure that only individuals considered fit and proper are placed in positions of authority within banking institutions and controlling companies.

The assessment should therefore be treated as a substantive regulatory review rather than a simple employment background check.

Businesses considering a regulated banking operation should also understand the broader commercial banking licence application process in Namibia.

Who Is Subject to the Assessment?

The assessment can apply to individuals involved in the governance, ownership and management of regulated banking institutions and controlling companies.

Directors

A person proposed for appointment to the board may need to demonstrate that they have the appropriate character, competence, experience and financial standing for the position.

This can include executive and non-executive directors, with additional considerations applying where a person is expected to act as an independent director.

Executive Officers

Executive officers have significant responsibility for the day-to-day management and strategic implementation of a banking institution. Their suitability can therefore be assessed in the context of the responsibilities attached to their particular position.

Substantial Shareholders

The BoN also has a separate framework for the assessment of substantial shareholders and prospective substantial shareholders.

The Bank’s Determination on the Fit and Proper Test for Substantial and Prospective Substantial Shareholders applies to prospective investors and also provides for ongoing fitness and probity considerations for existing substantial shareholders.

This means that fitness and propriety is not necessarily a one-time issue. Relevant information may need to remain current throughout the person’s involvement with the regulated institution.

People considering ownership in a Namibian bank should also understand the regulatory considerations involved in buying shares in a Namibian bank.

What Does the BoN Assess?

A candidate should prepare for questions concerning several broad areas of suitability.

The precise assessment depends on the position and applicable determination, but the central considerations generally include character and reputation, competence and experience, financial soundness and other circumstances relevant to the person’s suitability.

1. Character, Integrity and Reputation

The first area to consider is your personal and professional history.

The regulator may need to establish whether the candidate can be trusted to perform fiduciary and regulatory responsibilities honestly and responsibly.

Relevant matters can include:

• Honesty and integrity
• Professional reputation
• Criminal history
• Regulatory sanctions
• Previous disciplinary matters
• Disqualification from serving as a director
• Misconduct involving dishonesty or fraud
• Material legal disputes
• Previous positions held in regulated institutions
• Accuracy of information supplied to the regulator

The important principle is full and accurate disclosure.

Trying to conceal an adverse event can create a separate concern from the underlying event itself. A candidate should therefore identify potentially relevant matters before submitting documentation and obtain appropriate professional advice where the regulatory consequences are unclear.

Foreign banks exploring a presence in Namibia should distinguish director requirements from the separate rules relevant to opening a foreign bank representative office.

2. Competence and Experience

A fit and proper assessment also considers whether the proposed director or officer has the knowledge and experience required for the position.

The relevant experience should be considered in relation to the responsibilities of the proposed role and the size and complexity of the institution.

For example, a candidate may need to demonstrate experience in areas such as:

• Banking
• Finance
• Accounting
• Risk management
• Corporate governance
• Law
• Economics
• Information technology
• Compliance
• Audit
• Strategic management
• Financial services
• Business leadership

Having a qualification alone does not necessarily demonstrate practical competence. A strong application should connect the candidate’s education and professional history to the actual responsibilities they will undertake.

International regulatory guidance similarly treats fitness and propriety as an assessment of individuals serving in both management and supervisory functions, rather than merely a check of academic qualifications. Guide to fit and proper assessments.

The same governance principles become relevant when institutions introduce new technology or regulated products, such as applications for the BoN fintech sandbox.

3. Financial Soundness

Personal financial circumstances can also be relevant to a fit and proper assessment.

The purpose is not simply to determine whether someone is wealthy. Rather, financial soundness can help the regulator assess whether circumstances exist that could affect the person’s ability to exercise responsible judgment or create inappropriate financial pressures.

Issues that may require explanation can include:

• Insolvency
• Bankruptcy
• Outstanding judgment debts
• Sequestration
• Significant unpaid liabilities
• Serious credit problems
• Undisclosed financial interests
• Material financial disputes

Candidates should make sure that information concerning their financial position is complete, consistent and supported by the required documentation.

The regulatory context is particularly important for directors of businesses operating payment services, including those seeking a payment service provider licence.

4. Conflicts of Interest and Independence

A director must be able to exercise appropriate judgment in the interests of the banking institution and within the applicable legal and governance framework.

Potential conflicts can arise from:

• Other directorships
• Business relationships
• Significant shareholdings
• Related-party transactions
• Family or personal relationships
• Outside employment
• Financial interests
• Previous professional relationships

For an independent director, independence is particularly important because the role involves independent oversight rather than representing a particular shareholder or management interest.

The BoN’s corporate governance determination also introduced limits concerning board tenure, age and the number of boards on which a prospective board member may serve. The Bank stated that board members may generally serve a maximum of ten years, while an independent director and board chairperson may serve until age 70, subject to the applicable rules and exceptions. It also stated that a prospective board member may generally not serve on more than two boards at a time, subject to specified exceptions.

These governance considerations can also matter where an institution operates through specialist regulated entities, such as an e-money issuer.

Required Documentation for the Assessment

One of the most important preparation steps is ensuring that the application contains complete and consistent required documentation.

The exact documents depend on the position, institution and applicable BoN requirements. Candidates should therefore obtain the current requirements directly from the institution and the Bank rather than relying on an old checklist.

Documents can include:

• Completed regulatory forms
• Personal identification documents
• Curriculum vitae
• Academic qualifications
• Professional qualifications
• Employment history
• Directorship history
• Personal financial information
• Declarations
• Police clearance or certificate of conduct
• References
• Information about business interests
• Information concerning legal or regulatory matters

For substantial shareholders, the applicable BoN determination specifies documentation such as identification or company-registration documents, financial information, declarations and a police clearance or certificate of conduct.

The Bank of Namibia banking licence application guidelines also emphasise that proposed shareholders should demonstrate that they are fit and proper to own shares in the banking institution.

Institutions participating in national financial infrastructure may have additional regulatory considerations, including requirements associated with the BoN clearing and settlement system.

Prepare Your CV for Regulatory Review

A regulatory CV should be more detailed than an ordinary employment CV.

It should clearly establish:

1. Your full employment history.
2. Previous and current directorships.
3. Relevant professional experience.
4. Academic and professional qualifications.
5. Experience in financial services or regulated sectors.
6. Senior management responsibilities.
7. Risk, compliance or governance experience.
8. Relevant business interests.
9. Any periods that require explanation.
10. Contact details for appropriate references where required.

Avoid unexplained gaps or inconsistencies.

If the application form says one thing while the CV says another, the discrepancy may require clarification. The safest approach is to reconcile all information before submission.

For institutions developing or introducing new payment products, governance and management competence should also be considered alongside the relevant BoN approval process for a new payment instrument.

Prepare for Financial Disclosure

Financial disclosure can require considerable preparation.

Where personal financial statements or declarations are required, ensure that the information is accurate and up to date.

Review:

• Bank accounts
• Loans
• Mortgages
• Investments
• Shares
• Companies
• Trust interests where applicable
• Guarantees
• Significant liabilities
• Judgment debts
• Insolvency-related matters

Do not assume that an old financial statement will automatically satisfy a current regulatory request.

Directors and shareholders involved in virtual-asset businesses should also distinguish ordinary corporate governance requirements from the separate regulatory framework relevant to a virtual asset service provider licence.

Obtain Police Clearance Early

A police clearance certificate or certificate of conduct can form part of the required documentation.

The applicable requirements may specify the relevant jurisdiction, validity period or certification requirements. If a candidate has lived or worked in multiple countries, additional background documentation may be necessary.

Because police-clearance processes can take time, it is sensible to identify this requirement early rather than waiting until the rest of the application is complete.

Where a proposed business model involves token issuance, the management team should likewise understand the separate legal and regulatory considerations addressed in this guide to issuing crypto tokens in Namibia.

Understand the Board Governance Requirements

Passing a personal assessment is only one part of becoming a director.

The candidate should also understand the responsibilities associated with serving on the board of directors.

These responsibilities can include:

• Strategic oversight
• Risk oversight
• Financial oversight
• Governance
• Regulatory compliance
• Monitoring senior management
• Protecting the interests of depositors and the institution
• Understanding major risks
• Exercising independent judgment
• Attending and preparing for board meetings

The BoN’s revised BID-1 framework places emphasis on governance, succession planning, skills development and competencies within banking institutions.

A useful practical reference is the Directors Nominations Policy, which illustrates how a Namibian banking institution can structure its internal director nomination and fitness assessment process.

Directors should also understand that regulated banking activities can extend beyond conventional deposit-taking, including foreign exchange. Relevant businesses may need to consider an authorised forex dealer licence or the requirements for starting a bureau de change.

Be Careful With Previous Regulatory or Legal Problems

A previous legal or regulatory issue does not necessarily mean that every application will be assessed in the same way. However, candidates should not assume that such matters can simply be omitted.

Prepare a factual explanation covering:

• What happened
• When it happened
• Which organisation was involved
• The outcome
• Whether penalties were imposed
• Whether the matter has been resolved
• What obligations remain outstanding
• Any corrective action taken

Supporting documents should be provided where appropriate.

The objective is to allow the regulator to assess the circumstances based on complete information.

For companies dealing with international transactions, directors should also understand related foreign-exchange compliance issues, including BoN Form A for foreign exchange for imports.

Special Attention to Persons of Prominent Importance

The BoN’s revised corporate governance framework also addresses Persons of Prominent Importance (PPIs).

According to the Bank’s 2023 communication, PPIs are subject to more rigorous due diligence concerning wealth, business ownership and background matters because of potential conflicts of interest.

A candidate who falls within this category should expect additional scrutiny and should ensure that ownership and financial information is properly documented.

Similar attention should be given to transactions involving capital movements outside Namibia, including BoN Form E for capital outflow and emigration.

Check Directorship Limits Before Applying

Before accepting a proposed board position, review your existing directorships.

The BoN stated that the revised determination introduced restrictions on the number of boards on which a prospective banking board member may serve. The stated general limit is two boards at a time, with exceptions provided under the determination.

Candidates should therefore prepare a complete list of current board appointments and determine whether any exception applies before the appointment process progresses.

Businesses and their boards should also understand the regulatory process for BoN approval for outward foreign investment where such transactions fall within applicable exchange-control requirements.

Understand the Difference Between Directors and Shareholders

It is important not to confuse the requirements for a director with those applying to a shareholder.

A director is primarily assessed in relation to governance, oversight, competence, experience and the responsibilities of the position.

A substantial shareholder is assessed under the applicable shareholder fitness and probity framework.

The BoN’s determination specifically states that its shareholder fitness criteria apply to prospective substantial shareholders and existing substantial shareholders on an ongoing basis.

The Banking Institutions Act framework also restricts a person who is not fit and proper from becoming a substantial shareholder of a banking institution, microfinance banking institution or controlling company.

Where a bank or company intends to borrow from foreign lenders, additional exchange-control considerations may apply; see this guide to BoN approval for foreign business loans.

Use the Correct Regulatory Documents

Regulatory requirements can change. A document found online may relate to an earlier version of a determination or an earlier legal framework.

For this reason, candidates should verify the applicable documents against the current BoN regulatory framework.

The Bank of Namibia Determinations page provides access to the Bank’s determinations and identifies current and repealed determinations.

This distinction matters because the BoN’s current determinations page identifies BID 1 and BID 23 separately, covering director and officer responsibilities on the one hand and substantial shareholder fitness and propriety on the other.

The same principle applies when a banking institution proposes changes to its physical network, such as opening a new bank branch or establishing a foreign branch structure through a foreign branch of a Namibian bank.

What Can Cause Problems During the Assessment?

Candidates should pay particular attention to issues such as:

• Missing documentation
• False or incomplete declarations
• Inconsistent employment histories
• Undisclosed directorships
• Undisclosed business interests
• Unexplained financial problems
• Criminal convictions or regulatory sanctions
• Conflicts of interest
• Insufficient relevant experience
• Failure to meet applicable governance requirements
• Expired supporting documents
• Failure to disclose material information

The assessment is not simply about presenting positive information. The regulator needs enough reliable information to make an informed determination.

A Practical BoN Fit and Proper Preparation Checklist

Before submitting a candidate package, work through the following checklist:

• Confirm the exact position being proposed.
• Identify the applicable BoN determination.
• Obtain the latest regulatory forms.
• Update the candidate’s CV.
• Verify all employment dates.
• List every current and previous directorship.
• Compile academic and professional qualifications.
• Obtain the required identification documents.
• Obtain police clearance or certificate of conduct where required.
• Prepare financial information.
• Identify potential conflicts of interest.
• Disclose relevant legal and regulatory matters.
• Review business and shareholding interests.
• Check applicable board tenure and directorship limits.
• Ensure every declaration is complete and accurate.
• Reconcile information across every document.
• Confirm that documents satisfy the current BoN requirements.

For companies with foreign owners or international management, it is also useful to understand the wider Namibia business setup process, including how the underlying corporate structure may affect regulatory documentation.

How to Approach the Assessment

There is no legitimate shortcut for satisfying regulatory fitness and propriety requirements.

The strongest preparation is evidence-based: understand the role, obtain the correct regulatory requirements, disclose relevant information, document professional competence and make sure the submission is internally consistent.

The BoN’s regulatory framework is designed around the governance of institutions that hold and manage public funds. Its current determinations include specific requirements for directors and officers as well as substantial shareholders.

For comparison, the NamFISA Fit and Proper Assessment resources demonstrate that fit and proper assessments are also used in other regulated areas of Namibia’s financial sector. The exact requirements, however, should not be assumed to be identical to those applicable to directors of banking institutions.

The key is to use the requirements that apply to the specific regulated position rather than combining checklists from unrelated financial institutions.

Where the underlying entity still needs to be incorporated, applicants can review information about close corporation registration, private limited company registration or NGO registration, depending on the intended legal structure.

For foreign applicants, the relevant corporate-registration requirements should likewise be considered separately from BoN’s director assessment. Useful resources include registering a business in Namibia, registering a company in Namibia as a foreigner, and remote business setup in Namibia.

Applicants can also review the forms and fees for registering a private company in Namibia and the general requirements for registering a company in Namibia.

Questions about whether a foreign national can establish a Namibian company are addressed in Can a foreigner register a company in Namibia? and the more detailed requirements to register a company in Namibia as a foreigner.

After incorporation, tax and employer compliance can become relevant. Supporting resources include NamRA registration in Namibia, individual taxpayer registration, business income tax registration, and trust registration for tax purposes.

Businesses may also need a NamRA certificate of good standing, registration for non-resident withholding tax on services, or registration concerning non-resident shareholders tax.

Where tax matters are handled through a representative, businesses can also consider assigning a special power of attorney for Namibian tax matters, while businesses employing staff may need to consider PAYE employer registration.

Additional corporate support can include a virtual office in Namibia and company secretarial services.

Frequently Asked Questions

1. What is the BoN fit and proper test for directors?

The BoN fit and proper test is part of the regulatory process for determining whether individuals are suitable to occupy positions of authority within banking institutions and controlling companies. It considers factors relevant to character, competence, experience, financial soundness and governance responsibilities.

2. What documents are required for a BoN fit and proper assessment?

Requirements depend on the position and applicable determination. They can include regulatory forms, identification documents, a CV, qualifications, financial information, declarations and police clearance or certificates of conduct. Candidates should obtain the current checklist applicable to their specific appointment.

3. Can a person with a previous legal or financial problem still be assessed?

A previous legal or financial issue can be relevant to an assessment, but the appropriate treatment depends on the circumstances and applicable regulatory criteria. Candidates should disclose material matters accurately and provide supporting information rather than assuming that the issue can be omitted.

For questions about the applicable services or regulatory preparation, contact our Namibia business setup team.