Annual REPORT

ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
1. STATEMENT OF COMPLIANCE
CORPORATE GOVERNANCE STATEMENT
The Board and management of the Bank continue to comply with the Corporate Governance guidelines and Code of Conduct
prescribed by Central Bank of Kenya (CBK) Prudential Guidelines for the banking industry. The Board recognizes the
fundamental role of corporate governance in enhancing the culture and business performance and that high standards of
corporate governance are a key contributor to the long term success of a company, creating trust and engagement between
the company and its stakeholders.
The Group has adequate policies and procedures in place that are reviewed regularly and which include:
a) clearly defined responsibilities and authority of directors, the Managing Director and management
b) established corporate objectives and strategies;
c) recognition of the interests of various stakeholders;
d) alignment of corporate activities and behaviour in compliance with applicable laws and regulations; and
e) protection of the interests of depositors and other creditors
The board in December 2015 updated its Board Charter so as to bring in it line with the key values of the Bank, generally accepted
Principles of Good Corporate Governance and in compliance with the sound corporate governance principles under
the Prudential Guidelines published by the Central Bank of Kenya as well as the Companies Act 2015. The purpose of the
Board Charter is to provide
1. The demarcation of the roles and responsibilities, functions and powers of the Board and management.
2. The relevant principles of the company’s limits and delegation of authority and matters reserved for the Board
3. The policies and practices of the Board in respect of matters such as corporate governance, conflict of interest , board
meetings, composition of the Board, appointment, induction and evaluation
2. RELATIONS WITH SHAREHOLDERS
The Board recognises the importance of good communications with all shareholders. The Annual General Meeting (AGM)
as well as the published annual report is used as an opportunity to communicate with all shareholders. The Company always
gives shareholders the 21 days’ notice of the AGM as provided for in the Kenyan Companies Act and shareholders are
encouraged to submit questions and also appoint proxies to represent them where they are unable to attend. Ad hoc shareholder
requests for information are handled on an on-going basis and also on the floor of the AGM. The Board uses electronic
means to communicate with shareholders and shareholders are encouraged to visit the website familybank.co.ke and
click on investor relations for general information on the Company as well as annual reports. In upholding and protecting
shareholders’ rights, the Board recognises that every shareholder has a right to participate and vote at the general shareholders
meeting. The Board also invites shareholders to seek clarity on the Company’s performance in general meetings.
3. BOARD COMPOSITION
The Group has a competent Board of Directors bringing together diverse backgrounds and expertise necessary to provide
leadership to the bank. The Board comprises of seven non-executive Directors (four of whom are Independent Non-Executive
Directors), two executive directors and one alternate Director. Dr Kabiru Kinyanjui resigned from the board with effect
from 31 March 2015 after serving the Bank for Fourteen years and the Board appointed Mr Francis Mungai with effect
from11th June 2015 to fill in the casual vacancy. He serves this term until the next AGM.
4. BOARD INDEPENDENCE AND CONFLICT OF INTEREST
The Prudential Guideline No 2 prescribes the criteria for independence and minimum ratio of independent directors to the
total Board of Directors as one- third. The Bank is in compliance with these requirements. The Board has set standards to
ensure the Directors’ independence. The fundamental premise of the standards is that any Director is independent of
management and free of any business or other relationship that could materially interfere with exercising their independent
judgement. The Directors are required to disclose their areas of conflict. Directors are required to refrain from contributing
to or voting on matters in which they have such conflict.
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