Terms of Reference for the Board of Directors |
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| CreditBank s.a.l. Tel: (01) 501600 Fax: (01) 485245 |
1. Purpose of these Terms of Reference These Terms of Reference set out the authority, responsibilities, and membership of the Board of directors of CreditBank sal (the Bank). 2. Authority The Board comprises the directors of the Bank, and derives its authority to act from the Bank's Articles of Association, and other Lebanese laws and regulations governing companies and banks. 3. Role of the Board The role of the Board is to provide strategic guidance for the Bank and effective oversight of its management. 4. Board composition The Board will comprise directors with a broad range of commercial skills and experience, general understanding of banking activities, or with appropriate professional qualifications, and who are able to bring useful expertise to the Board's discussions and decisions. Board Directors must have the ability and capacity to make meaningful contributions to Board strategy and policy and be able, through questioning and analysis of reports, to participate in the overseeing of the proper functioning of management. The size of the Board, currently six Directors, will be determined in accordance with the Bank's constitutional documents and the repartition of the shareholding. It is the Bank's intention to include in addition to its executive and non-executive Board Directors, other independent Directors. 5. Chairman The Chairman of the Board will be elected by the Board in accordance with the Articles of Association for the same period as the Board's mandate. 6. Board committees The Board will establish committees as it considers appropriate to assist it in carrying out its responsibilities. The Board shall, as a minimum, establish the following Board committees: - Board committee on Audit. - Board committee on Corporate Governance. - Board committee on Risk Management. The Board may also appoint temporary committees. 7. Delegation to management The Chairman delegates to the General Manager the authority and power to manage the day to day business affairs of the Bank subject to such specific delegations and limits as set in the Lebanese governing laws and the Articles of Association. Also, the Chairman may delegate such authority and power to the Deputy General Managers as he shall determine from time to time. The Board delegates to the Management Committees and to the Management Team necessary authority and power as he shall deem adequate. 8. Responsibility of the Board The Board responsibilities are set in articles 42 and 43 of the Articles of Association. Moreover, the Board is responsible for: 8.1 Governance - establish, review and monitor processes for corporate governance throughout the Bank, with due regard to all of the Bank's stakeholders and its role; - build trust in the Bank through consistent behaviour, transparency and accountability; - monitor and influence the culture, reputation and ethical standards of the Bank; 8.2 Strategy - develop an in-depth understanding of each part of the Bank's business; - review, approve and monitor the Bank's budget, business and strategic plans, and review the assumptions and rationale underlying them; - make suggestions to the General Meeting concerning the Bank's capital structure; - review, approve and monitor major investments and strategic commitments; 8.3 Reviewing Key Performance Indicators - review business results and monitor budgetary control; - review, approve and monitor any necessary corrective actions and processes; 8.4 Integrity of external reporting - review and monitor the processes, controls and procedures which are in place to maintain the integrity of the Bank's accounting and financial records and statements; - monitor and receive reports from the Audit Committee in relation to internal controls, compliance with prudential regulations and requirements, and internal and external audit reports; - review and monitor the reporting to shareholders to ensure that it is objective, comprehensive and factual; 8.5 Risk management - establish, monitor and review the risk management processes with the guidance of the Risk Management Committee; - review and monitor processes for the maintenance of adequate credit quality; - review and monitor processes for the documentation and regular review and updating of the Bank's risk profile; 8.6 Management oversight and executive review - approve key executive appointments and monitor and review the business continuity plan; - review and monitor the performance of the General Manager and senior management; - approve all appointments of representatives within subsidiaries and other controlled entities; 8.7 Board performance - monitor and review processes to assist directors in having sufficient time to devote to Board matters to ensure that they discharge their duties effectively; and - review these Terms of Reference and their continuing adequacy from time to time. 9. Board meetings 9.1 Attendance Directors are expected to prepare adequately, attend, and participate at Board and committee meetings. Directors will be provided with adequate materials on topics to be discussed at Board meetings sufficiently in advance of the meeting date. 9.2 Board agendas Board agendas will be structured throughout the year to ensure that each significant responsibility of the Board is addressed. As part of the agenda, the Board will review strategy and the achievement of financial and other goals. The Board will receive a detailed overview of the performance and significant issues, including risk factors of each business field. The Board will receive from the General Management, on a regular basis, Key Performance Indicators and detailed financial reports; management will be invited to answer the Board s inquiries thereto. The Board will review the Bank's long-term strategic plans and the major issues that it expects the Bank to face in the future. The Board will review the Internal Audit reports during at least one board meeting each year. 10. Directors' remuneration The Annual General Meeting decides of the annual remuneration recommendations of directors. All reasonable expenses induced by Directors in carrying out their duties as defined in the Lebanese governing law and the Article of Association will be covered by the Bank. 11. Independence of directors A director will be considered to be independent for the purposes of service on the Board and Board Committees of the Bank if the director satisfies the standards adopted by the Board from time to time to assist it in its regular' independence' determinations. These standards will reflect appropriate independence requirements under best practice recommendations. An independent director must be independent of management and free of any business relationship that could materially interfere with - or could reasonably be perceived to materially interfere with - the exercise of his objective and independent judgment. 12. Appointment and re-election of directors All Board Directors are elected by the General Meeting amongst the shareholders holding at least 100 shares in accordance with applicable Lebanese laws and regulations and the Bank s Articles of Association. The Bank will provide a formal letter of appointment for each director setting out the key responsibilities and authorities as Director of the Board. The process for re-election of a director is in accordance with the Bank's Articles of Association, which requires that a director's term of office shall be for three years, subject to re-election by the Annual General Meeting. 13. Performance and evaluation The Board will annually review and evaluate the performance of the Board committees, the senior management of the Bank, the relationship between the Board and management, and matters of general corporate governance. 14. Access to management In order to conduct properly their duties, Board Directors will have open access to Directors of management during scheduled Board sessions. In line with best practice, such access is exclusively limited to Boar meetings. As an intrinsic part of the Board's responsibility of management oversight, Board committees, specifically, will have access to and mandatory meetings with individual senior management. 15. Board Secretary All directors shall have direct access to the Board Secretary. 16. Code of Ethics The Code of Ethics applies to all senior executives and employees of the Bank, as well as to directors, temporary workers and other independent contractors and consultants when engaged by or otherwise representing the Bank and its interests. In addition, this Board Terms of Reference also governs the conduct of the Board and each director. 17. Confidential information and Banking Secrecy The internal control systems are monitored and employee integrity is fostered to ensure that banking secrecy is at all time fully respected and confidential customer information is not improperly disclosed outside the Bank or used for individual personal gain. When the directors are serving on the boards of other companies and undertaking private transactions, they are to have regard to their confidentiality obligations at all times. 18. Conflicts of interest Directors are expected to avoid any action, position or interest that conflicts with an interest of the Bank, or gives the appearance of a conflict. A director who has a material personal interest in a matter that relates to the affairs of the Bank must give the Board of Directors notice of such interest. Such notice should be provided in writing to the Chairman and Board secretary, who are to ensure that the notice is brought to the attention of the other directors. When a potential conflict of interest arises, the director concerned will take no part in discussions nor exercise any influence over other Directors of the Board. Banking services may be provided to directors under terms and conditions that would normally apply to the public. The granting of banking facilities to a director is subject to the prior approval of the General Assembly according to all Lebanese applicable laws and regulations. Moreover, any deal concluded between the Bank and the directors is subject to the prior approval of the General Assembly whether this deal is transacted directly or indirectly. The Bank will include in its annual report the transactions concluded with the directors. The Board and Bank s external auditors shall establish a special report in this regard, and the General Assembly shall give its approval in light of these reports. 19. Shareholding requirements Directors are required to hold at least 100 shares in the Bank. 20. Restrictions on share dealings by directors All Directors, being shareholders, are subject to the terms contained in all applicable Lebanese laws and regulations on subscribing to and acquiring shares or other possible financial products of the Bank. Directors must not trade in the shares of any other entity if inside information on such entity comes to the attention of the director by virtue of holding office as a director of the Bank. 21. Communications The Board confirms that the Chairman, or any other person designated by the latter, is the sole spokesperson for the Bank. Individual Board Directors are expected to consult with the Chairman before any communication with various constituencies who are involved with the Bank that might engage it or interfere with its activity or affect its reputation. 22. Publicly available information The following information will be made publicly available, and updated as required, by posting the material on the Bank's website: - the Code of Corporate Governance - the Terms of Reference for the Board of Directors - the Code of Ethics - the names and details of the qualifications of the Directors of the Board - the number of meetings of the Board and the names of those attending This edition of Terms of Reference has been prepared on May 2009 and approved by the Board on August 13, 2009. |