Albaraka Bank Board Of Directors

The Board of Directors is responsible for the establishment and oversight of the Group’s business strategy and priorities, for setting its high-level policies and for overall management, and is accountable to shareholders for the financial and operational performance of the Group.

It is responsible for the raising and allocation of capital, monitoring of Executive Management and its conduct of the Group’s operations, for making critical business decisions and for building long-term shareholder value. The Board ensures that the Group manages risk effectively, through approving and monitoring the Group’s risk appetite and identifying and guarding against the longer term strategic threats to the business.

The Board is also responsible, inter alia, for:

setting and reassessing periodically the Group’s corporate goals and objectives;
establishing policies to further the achievement of the Group’s corporate goals and objectives;
establishing and regularly reviewing the management structure and responsibilities and monitoring the effectiveness of Executive Management including its ability to plan and execute strategies;
holding Executive Management accountable for results;
putting in place adequate policies and processes for approving budgets and reviewing performance against those budgets and against key performance indicators;
ensuring that an adequate, effective, comprehensive and transparent corporate governance framework is in place;
establishing and approving policies and procedures designed to ensure ethical behaviour and compliance with laws and regulations, auditing and accounting standards and the Group’s own corporate governance policy;
ensuring that ABG and its subsidiaries’ operations are supported by an appropriate control environment i.e. that internal audit, compliance, risk management and finance and reporting functions are well resourced and structured;
ensuring that the Group’s operations are supported by a reliable, sufficient and well integrated information system;
recognising and communicating to Executive Management the importance of the internal audit function at ABG and its subsidiaries, periodically reviewing internal control procedures and taking measures to enhance the function of internal audit and to act in a timely and effective manner on its findings;
approving the writing off of credit facilities and investments where appropriate, in accordance with the Group’s policies and procedures;
approving strategic investments by ABG and its subsidiaries;
monitoring potential conflicts of interest and preventing abusive related party transactions;
approving material transactions outside the normal course of business or in excess of the limits of approval authority delegated to Executive Management;
ensuring the preparation of financial statements which accurately disclose the Group’s financial position, on a regular and consistent basis, and for reviewing and approving for dissemination its periodic financial statements and annual reports;
approving all significant changes in the Group’s accounting and reporting policies;
ensuring compliance at all times with all relevant requirements of Shari’a and Islamic Accounting Standards issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI);
ensuring that the Group establishes and maintains an approved employee Code of Conduct and is in compliance therewith;
ensuring that the control environment maintains necessary client confidentiality and that clients’ rights and assets are properly safeguarded;
convening and preparing the agenda for shareholder meetings;
ensuring the equitable treatment of all shareholders including minority shareholders; and
performing any other functions required of the Board of Directors under applicable laws and regulations.

In its regular review of the Group’s strategy, the Board reviews the Group’s business plans and the inherent level of risk in those plans; assesses the adequacy of capital to support the business risks of the Group; sets performance objectives; and oversees major capital expenditures, divestitures and acquisitions.

The Board of Directors has overall responsibility for the Group’s system of internal control and its effectiveness and for defining and enforcing standards of accountability that enable Executive Management to achieve the Group’s corporate objectives. The Board ensures that the systems and controls framework, the Board structure and the organisational structure of the Group are appropriate for the Group’s business and associated risks and regularly assesses the systems and controls framework to that end. There are established and ongoing procedures in place for identifying, evaluating and managing significant risks faced by the Group, which are regularly reviewed by the Board. The Group’s system of internal control provides for a documented and auditable trail of accountability and applies across its operations, is designed to ensure effective and efficient operation and compliance with all applicable laws and regulations, and seeks to manage risk with a view to avoiding material errors, losses and fraud.

In meeting its responsibility to ensure efficient governance in all matters related to ABG, the Board has established a written compliance policy governing the Group’s compliance with all laws and regulations, in particular those enunciated by the Central Bank of Bahrain (CBB) and other local regulators. The Board has delegated responsibility for monitoring compliance to the President & Chief Executive, which responsibility is carried out through a dedicated Compliance Department, whose mandate covers all aspects of compliance including: formulation of effective policies and processes for the management of the Group’s compliance risk; assisting Executive Management and staff in managing risk; advising on laws and regulations and applicable compliance standards; disseminating compliance policies and providing guidelines to ABG staff members; ensuring an effective compliance methodology; providing periodical reports to the Board in connection with compliance controls; and establishing operational controls and a robust Know Your Customer (KYC) and Anti-Money Laundering (AML) framework. ABG is in the continuous process of enhancing its compliance framework and that of each of its subsidiaries.

In 2010 the CBB introduced new requirements to be met by all licensees under Volumes 2 and 6 of Module HC of its Rulebook, with respect to corporate governance principles in line with the Principles relating to the Corporate Governance Code issued by the Ministry of Industry & Commerce of the Kingdom of Bahrain, international best practice corporate governance standards set by bodies such as the Basel Committee for Banking Supervision and related high level controls and policies. In 2014 the CBB introduced further requirements addressing the matter of remuneration of Approved Persons and Material Rick Takers (see below), which requirements were duly adopted by ABG. ABG conducts annually detailed internal assessments to ensure compliance with these requirements and, in the event that any shortfall is identified, sets specific milestones for implementation of measures to address the shortfall. The CBB, ABG’s shareholders, the Board of Directors and Executive Management are all kept fully apprised of such shortfalls if any and the milestones set. In accordance with this procedure, ABG earlier applied for and received the consent of the CBB to the appointment of the Chairman of the Board of Directors notwithstanding that he is not an independent director as defined in the CBB Rulebook.

The Board Audit and Governance Committee members possess adequate awareness of Shari’a principles in relation to Islamic banking transactions and are therefore competent to oversee the audit of Shari’a-related governance issues.

ABG ensures on a continuous basis that the minority shareholders of the Group are well represented on the Board of Directors through the independent directors, who have additional responsibility for protection of the rights of minority shareholders.

The Board of Directors meets regularly (at least four times a year) and has a formal schedule of matters reserved to it, considering key aspects of the Group’s affairs referred to it for decision. The Board reviews the Group’s strategy and financial plans, all proposed material changes to the Group’s policies, structure and organisation, reports provided to it on the operations of the Group (with emphasis on organisational, risk management and information technology development) and the performance of Executive Management. All Directors attend all Board meetings whenever possible and in any event not less than 75% of meetings in any year, and maintain informal contact between themselves in between meetings.

The Chairman is responsible for leadership of the Board and for its efficient functioning. He ensures that all members receive an agenda, minutes of prior meetings and background information in writing before each Board meeting and between meetings when necessary. The Board and its Committees are supplied with full and timely information to enable them to discharge their responsibilities. In this respect, the Board, its Committees and all Directors individually have access to Executive Management, external legal or other professional consultants and advisors at the Group’s expense, and to the Board Secretary, who is responsible for ensuring that the Board procedures and applicable rules and regulations are observed. The Board encourages participation by members of Executive Management at Board meetings if appropriate regarding matters which the Board is considering and where the President & Chief Executive believes management should have exposure to the Board.

Under ABG’s Articles of Association the Board of Directors shall consist of no fewer than five and no more than fifteen members. Members of the Board of Directors hold office for a three-year renewable term, although the term of office may be extended at the request of the Board for a period not exceeding six months with the approval of the Minister of Industry & Commerce of Bahrain.

There is no maximum age limit at which a Director must retire from the Board of Directors. Each Director’s membership of the Board shall terminate upon the expiry of his/her term, or upon the resolution of the shareholders in General Meeting, or as a result of one of a number of specified events or circumstances, including:

the original appointment being found to be contrary to the provisions of ABG’s Articles of Association;
abuse by the individual of his/her position as director or failure to comply with the provisions of his/her appointment or the terms of the Charter of the Board or of its Committees;
the individual’s failure to attend three consecutive Board meetings without lawful excuse notified in writing to the Board;
upon the individual’s formal resignation from the Board following reasonable prior notice; or
occupation of any other remunerative office within ABG unless specifically approved by the Board of Directors.

When an announcement is made requesting nominations for the position of membership of the Board of Directors to replace those members whose three year term is due to expire, such nominations must be submitted to the Chairman of the Board within the time frame provided in the announcement then to the Board Affairs and Remuneration Committee for it to make its recommendations to the Board. As part of the nomination process, each nomination must comply with local rules and regulations and must be submitted for approval to the CBB in order to ensure compliance with the CBB’s â€œFit and Properâ€‌ criteria. The names of all nominated individuals so approved by the CBB are then submitted to the shareholders at the next AGM for consideration and election. Election of ABG Directors takes place in accordance with the rules and procedures set out in the Commercial Companies Law and ABG’s Articles of Association.

In line with best corporate governance best practice, there is a succession plan for the Board of Directors. This is reviewed annually and submitted to the CBB.

Each new Director elected to the Board has a written appointment agreement with ABG, detailing the powers, duties, responsibilities and obligations of that director and other relevant terms and conditions of his appointment.

There are currently 13 Directors on the Board. They have varied backgrounds and experience and are, individually and collectively, responsible for performing the responsibilities of the Board, and for exercising independent and objective judgement. No individual Director or group of Directors has unfettered powers of decision making or dominates the Board’s decision making. Other than the President & Chief Executive, all Directors are nonexecutive and fully independent of management, and are individually responsible for scrutinising and challenging management decisions and performance. The posts of Chairman, Vice Chairman and President & Chief Executive are held by different Directors, and the President & Chief Executive has separate, clearly defined responsibilities. The size and composition of the Board and its Committees are regularly assessed, while the effectiveness, contribution and independence of individual Directors are assessed annually in light of interests disclosed and conduct. The independence or nonindependence of Directors is, likewise, reviewed annually.

All directors are remunerated solely by means of an annual retainer fee and sitting fees paid for each meeting attended, in addition to reimbursement of travel expenses as appropriate.

The Board of Directors has adopted a formal Code of Business Conduct and Ethics applicable to Directors and Executive Management, officers, employees and agents, consultants and others representing or acting for the Group. Details of the Code are provided in the Additional Public Disclosures section of this report.

In line with international best practice and the CBB Rulebook, the Board has instituted corporate governance measures to ensure that the interests of the shareholders are protected, including the appointment to the Board of more than one third of directors as independent directors as defined in the CBB Rulebook.

In 2016 the members of the Board were:

Non-Executive Directors

Shaikh Saleh Abdullah Kamel- Chairman
Mr. Abdullah Saleh Kamel – Vice Chairman
Mr. Abdul Elah Sabbahi
Mr. Yousef Ali Fadil Bin Fadil
Mr. Mohyedin Saleh Kamel
Mr. Khaled Abdulla Ateeq

Independent Directors

Mr. Abdulla A. Saudi – Vice Chairman
Mr. Saleh Al Yousef
Mr. Ebrahim Fayez Al Shamsi
Mr. Jamal Bin Ghalaita
Dr. Bassem Awadallah
Mr. Saud Saleh AlSaleh

Executive Director

Mr. Adnan Ahmed Yousif – President & Chief Executive

All current Directors were elected for a 3-year term on 20 March 2017.

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