Financial Statements 2011 - Investing In Africa

Statement On Corporate Governance (Continued)
Board and Strategy Meetings
The Board and its committees meet regularly in accordance
with business requirements.
The Board Work Plan together with the calendar of meetings
for 2011 was fixed in advance and provided to all directors.
Adequate notice was given for each meeting and directors
received in good time detailed papers on the issues to be
discussed. In 2011 four scheduled Board meetings were held,
in addition to a special Board meeting convened to review and
approve the implementation of a new core banking computer
system.
During 2011 the full Board also attended a two day retreat to
review the achievements of the 2009/2011 Strategic cycle and
also develop the 2012/2014 Strategic Plan.
The Board has ownership over the Group’s strategic direction.
At each Board meeting progress towards the targets of the
approved business plans is reviewed and guidance provided to
senior management as appropriate. The Board receives regular
reports and presentations from the Group Managing Director
on the macroeconomic environment and the impact on banking
business, a review of the financial services industry and the
regulatory environment, strategy and business development
and the financial performance of the banking industry.
The summary of the Board meetings and attendance is shown
on page 26.
Directors’ External Activities and Conflicts of Interest
Directors have a statutory duty to avoid situations in which
they have or may have interests that conflict with those of the
Group. Business transactions with all parties, directors or their
related parties are carried out at arms’ length.
In 2011 the directors submitted their annual declarations of
interests which included:-
• An acknowledgement that should it come to the attention of
a director that a matter concerning the Bank may result in a
conflict of interest, they are obliged to declare the same and
will exclude themself from any discussion or decision over
the matter in question.
• An acknowledgement that should the director be appointed
to the Board or acquire a significant interest in a business
competing with the Group, the director will be obliged to
offer their resignation.
• An acknowledgement that the foregoing also applies to
interests of the immediate family members of the directors.
Business transactions with the directors or their related parties
are disclosed on page 92.
Board Structure
The Board operates under a comprehensive structure made
up of committees established to assist it in discharging its
responsibilities and obligations. The committees assist the
Board in carrying out its functions and ensuring that there is
independent oversight of internal control and risk management.
The Board has determined the purpose and number of
committees required to support it in carrying out its duties and
responsibilities and in guiding management. These committees
have been established with sets of specific terms of reference,
which were reviewed and updated in 2011. The appointment
of the members to these committees draws on the skills and
experience of individual directors.
The Board committees namely: Audit; Credit Risk; Executive;
Human Resources & Compensation; Nominations and
Risk Management are supported by five key management
committees: Executive Management (Excom), Management
(Mancom), Assets and Liabilities Management (ALCO), Credit
Risk Management and Senior Risk Committees.
At every meeting of the Board the chair of each committee
presents an update of its activities, decisions and
recomendations of their respective committees since the
previous Board meeting.
Membership of the various Board committees is shown on page
20.
The Group Company Secretary sits in all the Board and
committee meetings and is responsible for monitoring and
coordinating the completion and dispatch of Board and
committee agenda, papers and other briefing materials.
Management and external service providers and experts attend
by invitation as circumstances dictate. Directors’ attendance of
these committees is provided on page 26.
Details of these committees are given here below.
• Audit Committee
The committee plays a vital role in ensuring the integrity of
the financial statements prior to the review and approval
by the Board. The committee continually evaluates the
effectiveness of the internal control systems and receives
reports on the findings of the internal and external auditors
and management’s corrective actions in response to the
findings.
The committee meets quarterly and the external auditors
are invited to attend whenever necessary but at least once
in a year.
• Credit Risk Committee
The committee reviews and oversees the overall lending
policies of the Group and approves credit applications that
are above the approval limits for management. It ensures
that there are effective procedures to identify and manage
irregular and problem facilities, minimize credit loss and
maximize recoveries.
22 • NIC Bank Limited • Annual Report & Financial Statements 2011