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Corporate governance • Overseeing and reviewing internal controls and procedures for the financial reporting process and significant accounting and reporting issues, including professional and regulatory pronouncements; • Reviewing the un-audited and audited financial statements in conjunction with the external auditors and management, to ensure that any necessary adjustments are dealt with adequately before formal adoption of the accounts; • Reviewing the effectiveness of systems for monitoring compliance with laws and regulations, and to periodically obtain updates from management and general counsel regarding compliance; and • Reviewing the proposed scope, approach, independence, and performance of the external auditors. Risk Committee In accordance with Basel II requirements, the Risk Committee assists the Board in fulfilling its oversight responsibilities through the formulation and implementation of risk policies in compliance with laws and regulations within an integrated risk management framework. The Committee formulates and recommends to the Board the aggregate risk appetite of the business and ensures that a framework is in place to allow the risk exposures to be measured. Membership and Attendance The Risk Committee consists of 7 Directors nominated by the Board. The Chairman of the Committee is appointed by the Board. Frequency of Meetings Board Risk Committee meetings are held once every quarter or more frequently if deemed necessary. Authority The Committee has complete authority to recommend to the Board, amendments to any risk policy which become necessary in light of changes to the Bank’s operating environment and developments in both domestic and international markets. In addition the Committee has the mandate to ensure compliance with all risk policies, to communicate with internal and external auditors to assess the strength of the risk framework and suitability of policies and to consider and approve extensions to credit facilities above the remit of the management credit committee, upon their recommendation. Roles and Responsibilities The Committee’s specific responsibilities include: a) The effective operation of policies, procedures and processes pertaining to risk management; b) Maintenance of a compliant Internal Capital Adequacy Assessment Process as prescribed by Basel II as it relates to credit, operational and market risk; c) The ongoing review of credit risk management policy formulation, in light of the Bank’s strategic objectives and dynamic operating environment; d) Ensuring the credit approval process is fair and transparent and compliant with the policies set by the Board; e) Ensuring that the quality of credit assets conforms to the credit risk parameters as set by the Bank’s policies; f) Implementing and monitoring a risk management framework that reflects best practice in the industry; g) The review and organization of the necessary critical skills and other resources required to maintain the highest standards of risk management; and h) Reviewing and updating the terms of reference as per the directives of the Board; Nominations & Remunerations Committee Review of the remuneration and incentive packages of the executive management and the Board and ensuring that such packages are consistent with the corporate values and strategy of the Bank has been delegated to the Remunerations and Nominations Committee (BRNC). [42] BMI Bank Annual Report 2011
Corporate governance Composition The BRNC was re-constituted on 15 December 2011, which consists of 4 Directors nominated by the Board of which majority are independent directors. The Chairman of the Committee is an independent director. Frequency of Meetings The Committee shall meet at least twice a year. Duties and Responsibilities The Committee’s specific responsibilities are more elaborately incorporated in its Terms of Reference, which also include: a) Consider and make specific recommendations to the Board on, both remuneration policy and individual remuneration packages for the Directors, CEO and GM and their direct reports in line with the policy guidelines to be used for determining remuneration in individual cases, including relative importance of each component; and specific criteria to be used in evaluating an officer’s performance; b) To evaluate the aggregate performance of all other officers of the Bank in consultation with the CEO and the Chairman of the Board; c) For retaining and overseeing outside consultants or firms for the purpose of determining director or officer remuneration, administering remuneration plans, or related matters; Additionally, with regards to Board membership: a) The Committee shall make recommendations to the Board From time to time as to changes the Committee believes to be desirable to the size of the Board or any Committee of the Board; b) Whenever a vacancy arises (including a vacancy resulting from an increase in Board size), the Committee shall recommend to the Board a person to fill the vacancy either through appointment by the Board or through Shareholder election; c) In performing the above responsibilities, the Committee shall consider any criteria approved by the Board and such other factors as it deems appropriate.; d) The Committee shall also consider all candidates for Board membership recommended by the Shareholders and any candidates proposed by management, and e) The Committee shall identify Board members qualified to fill vacancies on any Committee of the Board and recommend to the Board that such person appoint the identified person(s) to such Committee. Management Committees The Board has delegated the following responsibilities to the Executive Management: • The development and recommendation of strategic plans for consideration by the Board that reflect the longer term objectives and priorities established by the Board; • Implementation of the strategies and policies of the Bank as determined by the Board; • Monitoring of the operating and financial results against plans and budgets; • Monitoring the quality of the investment process against objectives; • Prioritizing the allocation of capital, technical and human resources; • Monitoring the composition and terms of reference of management committees; and • Developing and implementing an effective risk management framework. Several management committees have been constituted to assist in the affairs of the Bank, comprising of Executive Management and various senior managers. The main Committees and their respective summary terms of reference are set out below. All Management Committees are chaired by the Chief Executive Officer except the Executive Risk Committee where the Chief Risk Officer is the Chairman. Committee members are heads of the relevant divisions appointed by the Committee Chairman. Each Committee meets at least once a month except for the Management Remunerations and Promotions Committee which meets annually. BMI Bank Annual Report 2011 [43]
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English - BMI Bank

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