Guideline 13 Corporate Governance for Commercial Banks in The Gambia

# CENTRAL BANK OF THE GAMBIA

![Central Bank of The Gambia Seal](seal.png)

## Guideline 13: Corporate Governance For Commercial Banks in The Gambia

AUGUST 2022

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## Contents

GENERAL OVERVIEW...................................................5  
1.0 Introduction.....................................................5  
2.0 Purpose of The Guideline........................................6  
3.0 Scope...........................................................7  
3.3 Effective Date..................................................7  
4.0 Interpretations...............................................7  
5.0 Principles of the Guidelines...................................8  
6.0 Tenets of Corporate Governance.................................9  
6.1 Risk Management..................................................9  
6.2 Regulatory Requirements........................................9  
6.3 High Quality Financial Disclosure.............................10  
6.4 Market Discipline..............................................10  
6.5 Effective Internal Audit Functions...........................11  
6.6 Compliance Function............................................11  
PART (B): BOARD OF DIRECTORS......................................11  
7.0 Effective Framework for Board and Management Oversight.....11  
8.0 Role of the Board..............................................12  
9.0 The Responsibilities of the Board............................13  
10.0 Board Meetings...............................................14  
11.0 Board Appointments and Disqualification...................15  
12.0 Board Composition.............................................16  
13.0 Board Secretary...............................................18  
13.1 Functions of the Board Secretary............................18  
14.0 Board Diversity...............................................19  
15.0 Allocation of individual responsibilities..................19  
16.0 Role and Responsibilities of Board Chairperson.............19  
17.0 Performance Orientation and Training of the Board..........20  
18.0 Board Sub-Committees.........................................21  
18.1.0 Audit Committee...........................................22  
18.1.1 Composition of the Audit Committee......................22  
18.1.2 Functions of the Audit Committee........................23  

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## 18.2 Board Credit Committee...................................23  
18.2.1 Composition of the Board Credit Committee..............24  
18.2.2 Functions of the Board Credit Committee................24  
18.3 Board Risk Management Committee...........................25  
18.3.1 Composition of the Risk Management Committee..........25  
18.3.2 Function of the Risk Management Committee.............25  
18.4 Board Remuneration and Appraisal Committee...............26  
18.4.1 Composition of Renumeration and Appraisal Committee...27  
18.4.2 Functions of the Remuneration and Appraisal Committee..27  
18.5 Nomination Committee........................................27  
18.5.1 Composition of Nomination Committee....................28  
18.5.2 Functions of the Nomination Committee..................28  
PART (C): SHAREHOLDERS RIGHT, CONFLICT OF INTEREST & EXTERNAL AUDITORS........29  
19.0 Shareholder Rights..........................................29  
20.0 Conflict of Interest........................................30  
21.0 External Auditors..........................................31  
PART (D): SENIOR MANAGEMENT.....................................32  
22.0 Qualifications..............................................32  
23.0 Composition of Senior Management...........................33  
24.0 Functions of Senior Management.............................33  
25.0 Duties and Responsibilities of Senior Management..........34  
26.0 Appointments and Termination of Senior Management.........35  
27.0 Key senior management Committees...........................35  
27.1 Assets and Liabilities Committee (ALCO)..................35  
27.1.2 Functions of the Assets and Liabilities Committee (ALCO)36  
27.2 Management Credit Committee................................36  
27.2.1 Function of the Management Credit Committee...........36  
27.3 Risk Management Committee..................................37  
27.3.1 Functions of The Risk Management Committee............37  
27.4 Disciplinary Committee.....................................37  
27.4.1 Functions of The Disciplinary Committee...............38  

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## 27.5 Human Resource Committee..................................38  
27.5.1 Functions of Human Resource Committee...................38  
27.6 Management Appraisal Committee.............................39  
27.6.1 Functions of the Management Appraisal Committee........39  
27.7 Information Systems Steering Committee...................39  
27.7.1 Functions of The Information Systems Steering Committee39  
PART (E): TRANSPARENCY...........................................40  
28.0 Corporate Governance Disclosure............................40  
PART (F): REMUNERATION AND CULTURE.............................41  
29.0 Remuneration................................................41  
30.0 Culture.....................................................43  
PART (G) ADDITIONAL FOR ISLAMIC BANKS..........................44  
31.0 Shariah Governance..........................................44  
31.0 Shariah Committee (SC).....................................45  
32.0 Duties and Responsibilities of the Shariah Committee......46  
33.0 Appointments and Termination Shariah Committee Members...47  
34.0 Shariah Committee Meetings..................................48  
35.0 Disclosure of Shariah Non-Compliance......................48  

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## GENERAL OVERVIEW

### 1.0 Introduction

The Central Bank of The Gambia (Central Bank), as regulator and supervisor of banks, has a duty to ensure that licensed banks under Section 34 (3) Banking Act 2009 have good corporate governance standards and practices to ensure that they are managed safely and soundly where risk-taking activities and business prudence are appropriately balanced to protect all stakeholders.

In developing the Guideline, provisions contained in sections 31, 32 and 37 of the BA 2009 have been followed and international best practices¹, where relevant, have been considered. The document addresses corporate governance for both conventional and Islamic banks given their different governance structures.

It is recognised that corporate governance of banks is different from other organisations due to the nature of the banking business, the uniqueness of banks’ balance sheets, the systemic risks caused by bank failures and its impact on the economy. Banks serve conflicting interests from equity holders, borrowers or depositors and good governance is important for balancing these interests.

Islamic banks are financial institutions generating distinct corporate governance challenges. The governance of Islamic banks should be different from that of conventional banks due to the number of parties involved in their scheme. Firstly, Islamic banks must undertake their activities only on the basis of Shariah Law as the risk of Shariah non-compliance can create financial turmoil. Islamic banks are characterised by the existence of the ‘investment account’ which complicates their governance system. The institutional environment in which Islamic banks operate is inherently less transparent with weaker market forces.

¹ Principles for Corporate Governance, October 2010, Basel Committee on Banking Supervision, Bank for International Settlement

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## Therefore, the purpose of corporate governance for Islamic banks is to provide a mechanism that allows fairness to all stakeholders through greater transparency and accountability towards Islamic principles.

The Guideline is mandatory and failure to comply will attract sanctions/penalties in accordance with the Banking Act 2009 or any other applicable law or regulations.

### 2.0 Purpose of The Guideline

2.1 The purpose of this Guideline is to set out a guidance which can be used by each bank to develop and implement sound corporate governance framework.

2.2 Accordingly, Corporate Governance involves the allocation of authority and responsibilities, the manner in which the business and affairs of a bank are discharged by its board and senior management including:

I. Set the bank’s strategy and objectives.

II. Determine the bank’s risk tolerance/appetite.

III. Operate the bank’s business on a day-to-day basis. Clear lines of responsibilities should be enforced throughout the organization.

IV. Protect the interests of depositors, meet shareholders’ obligations, and the interests of other recognized stakeholders.

V. Compensation policies should be consistent with the bank’s long-term objectives.

VI. Align corporate activities and behaviour with the expectation that the bank will operate in a safe and sound manner, with integrity and in compliance with applicable laws and regulations.

2.3 A robust corporate governance ensures that the Board shall, apart from providing guidance and overseeing the bank’s strategic objectives, clearly define areas of responsibility, authority levels and reporting lines.

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## 3.0 Scope

3.1 This guideline is applicable to all banking institutions licensed and supervised by the Central Bank of the Gambia (CBG) and shall be read in conjunction with the Banking Act 2009, Guideline 9 and 12.

3.2 The Guidelines cover a variety of governance related issues; however, it shall be considered as a minimum requirement for banks.

3.3 Effective Date  
This Guideline shall come into effect January 31, 2023.

### 4.0 Interpretations

4.1 The following terms used in the Guideline shall be taken to have the meaning assigned to them hereunder:

‘Corporate Governance’ means the manner in which the business and affairs of a regulated financial institution is governed by its Board and Senior Management, including how its strategy and objectives are set; its risk appetite/tolerance are determined; its day-to-day business is operated; interests of depositors are protected and shareholders obligations are met.

‘Non-Executive Director’ means a member of the Board not involved in the day-to-day management and not a full-time salaried employee of the banking institution.

‘Independent Non-Executive Director’ means a Non-Executive Director who is not a shareholder or his/her representative; has not been employed by the banking institution in any executive capacity for the preceding three financial years, and has no contractual relationship with, or interest in, the banking institution. Appointment is based on person’s expertise and professionalism.

‘Related Interest’ in relation to an individual, includes any company, cooperative, private business corporation, syndicate, or association of persons in which the individual has a significant interest, or is the largest single shareholder, including any person who has entered into an agreement or arrangement relating to the acquisition, holding or the exercising of voting rights in respect of shares in the banking institution in question.

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## ‘Senior Management’ means the Chief Executive Officer (CEO) and Heads of Department and Units in line with Guideline 12.

‘Appointment’ includes a reference to election, re-appointment, and re-election.

‘Board’ refers to the Board of Directors of a financial institution.

‘Board Committee’ refers to any committee of the Board.

‘Financial Institutions’ refers to a licensed person, and a financial holding company.

‘Proxy’ someone empowered to vote on behalf of their shareholders at the Annual General Meeting (AGM)

‘Alternate Director’ individual appointed to attend a Board meeting on behalf of the Director of a company where the principal director would be otherwise unable to attend.

‘Insider Credit’ refers to a loan granted by a bank to its own executive officers or directors.

‘Independent Director’ is a director who brings expertise to the Board and has NOT (i) been an executive of the bank in the past; (ii) been a substantial shareholder of the bank or any of its affiliates; (iii) had a significant business or other contractual relationship with bank or any of its affiliates in the past.

‘Bank’ means the Central Bank of The Gambia.

‘bank’ refers to commercial and other banks.

‘Contractual Relationship’ any legal relationship between the bank and other parties which is evidenced by- (i) a valid Offer and Acceptance; and (ii) a valid consideration.

‘Major Shareholders’ an individual, corporation, partnership, association, joint-stock company, business trust, or unincorporated organization that is directly or indirectly the beneficial owner of more than 10 percent of any class of the bank equity.

### 5.0 Principles of the Guidelines

5.1 The Guidelines set the principles for corporate governance and ensure adoption of sound corporate governance practices for banks.

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## 5.2 The Guidelines specify responsibilities in setting the targets and objectives, means of achieving them, as appropriate for the Shariah Committee and size of their business activities.

### 6.0 Tenets of Corporate Governance

#### 6.1 Risk Management

6.1.1 It is the responsibility of the Board to ensure that a bank’s policies and systems are effective enough to achieve a prudential balance between the risks and returns. Risks ought to be monitored and managed to ensure long term viability of the bank. To discharge this function, a reasonable knowledge of the risks specific to banks is essential.

6.1.2 The primary responsibility for identifying and managing risks lies with the Board of Directors and Senior Management. They must set up a framework of internal controls and practices to govern the operations of the bank and ensure that it functions in a safe and sound manner. Some of the key risks faced by banks include credit risk, market risk, operational risk, reputational risk, interest rate risk and liquidity risk.

6.1.3 The Board must ensure that the bank has a risk management unit/department which is staffed by qualified and experienced individuals. The Board shall carefully review the adequacy of the risk management policies, systems, and procedures of the bank annually.

#### 6.2 Regulatory Requirements

6.2.1 Banks must comply with regulatory and prudential requirements, and various reporting obligations. Therefore, there is a need for all corporate governance frameworks to include systems for ensuring that all statutory and regulatory requirements are adhered to, and that breaches of the rules and regulations and associated penalties are highlighted in the bank’s annual report.

6.2.2 Banks operating in The Gambia whether commercial, Islamic or investment are licensed under the laws of The Gambia, governed by the Banking Act 2009 and

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## Guidelines issued by the Bank. By this Corporate Governance Guideline, they are not branches of PLC but subsidiaries or local banks and the highest governance body is the Board of Directors.

#### 6.3 High Quality Financial Disclosure

An important prerequisite to sound corporate governance is the establishment of a robust financial disclosure mechanism. This is essential as a means of strengthening the accountability of Directors, Senior Management and enhancing the incentives for risk management. It is also essential for market participants, particularly the large creditors of banks, news media, financial analysts, and rating agencies, to effectively monitor the performance and soundness of banks to engender market discipline. In this regard, all banks shall make the following minimum disclosure on their financial statements:

6.3.1 Quantitative Disclosure (in addition to the financial statements and disclosures illustrated in the Financial Reporting Guideline, volume 5):

I. Net Income  
II. Loans to Deposit Ratio  
III. Return on Assets (ROA)  
IV. Return on Equity (ROE)  
V. Earnings per Share  
VI. Gearing Ratio  
VII. Net Interest Margin  
VIII. Insider credit Ratio

6.3.2 Qualitative Disclosures (in addition to the qualitative disclosures listed in the Financial Reporting Guideline, volume 6), shall include:

I. Number of times the Board met within the year; and  
II. The total payments made or related to board sittings.

#### 6.4 Market Discipline

Market discipline plays a key role in promoting financial system stability. When market discipline is working effectively, timely measures can be taken to correct the deficiencies in a bank before it becomes insolvent. Effective market discipline requires financial

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## information to promptly present a true picture of the value of the bank based on Generally Accepted Accounting Principles (GAAP), International Financial Reporting Standards (IFRS) and Prudential benchmarks.

#### 6.5 Effective Internal Audit Functions

6.5.1 Each bank shall have a strong and effective Internal Audit Unit or Department which shall be headed by an ACCA, CIMA, ICAEW, CPA, CIB qualified accountant/auditor or a person with similar qualification and the requisite experience as outlined in Guideline 12.

6.5.2 The internal auditor shall functionally report to the Board Audit Committee directly and copied the MD/CEO for attention.

#### 6.6 Compliance Function

This shall be independent function that identifies, assesses, advises, monitors and reports on the institution’s compliance risk, that is the risk of legal or regulatory sanctions, financial loss, or loss to reputation an institution may suffer as a result of its failure to comply with all applicable laws, regulations, codes of conduct and standards of good practice.

## PART (B): BOARD OF DIRECTORS

### 7.0 Effective Framework for Board and Management Oversight

7.1 An effective system of corporate governance provides the framework within which the Board and Management address their respective responsibilities. Each bank must develop, recognise, and publish the respective roles and responsibilities of the Board and Management. The corporate governance framework shall be designed to:

I. Enable the Board to provide strategic guidance for the company and effective oversight of Management;  
II. Clarify the respective roles and responsibilities of Board members and Senior Executives to facilitate accountability to both the bank and its shareholders;

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## III. Ensure a balance of authority to ensure that no single individual has unfettered powers; and  
IV. Ensure the formulation of a Board Charter that clearly defines the respective roles, responsibilities and authorities of the Board and its sub-committees.

### 8.0 Role of the Board

The Board of Directors shall fulfil the following functions:

8.1 Articulate corporate governance values, codes of conduct with ethical standards for the bank.

8.2 Approve and oversee the implementation of the bank’s capital adequacy assessment process, capital and liquidity plans, compliance policies and obligations and internal control systems.

8.3 Responsible for compliance with prevailing banking laws and regulations and for the establishment of adequate policies to permanently measure and evaluate its financial performance and risk exposure in the various fields of business activities.

8.4 Establishment of compliance and risk strategies, policies, procedures and supervision of their implementation.

8.5 Establishment of corporate governance policies and rules. The governance policies and rules must be approved by the Board.

8.6 Periodical review of the risk policies and procedures, at least annually unless a shorter review is required.

8.7 Decision making on budgets and business plans.

8.8 Establishment of a transparent nomination process for the Board members and disclosure of the process to the shareholders.

8.9 Selection of Board members in accordance with “Fit and Proper” criteria in line with Guideline 12.

8.9 Decision making on selecting, compensating, and monitoring key executives.

8.10 Establishment and supervision of appropriate performance standards for members of the Board and key executives.

8.12 Appointing and removing Senior Management of the bank including the Managing Director, Chief Financial Officer, the company secretary etc.

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## 8.11 Monitoring senior management’s performance and implementation of strategy, and ensuring appropriate resources are available.

8.12 Establishment of continuity plans and supervision of their implementation.

8.13 Approval and supervision of internal control systems, with annual reviews concerning their effectiveness.

8.14 Establishment of policies to regulate the relationship of the bank with its stakeholders.

8.15 Training and development of Board members and key executives for the purpose of enhancing and maintaining their ability to discharge their duties and responsibilities.

### 9.0 The Responsibilities of the Board

9.0 The Board has the ultimate responsibility to adhere and comply with the provisions of Section 31,32 and 33 of the Banking Act 2009, provisions of Guideline 9 and 12 as well as Sections 235, 236 and 241 – 245 of the Companies Act 2013 in addition to any other regulations the Central Bank may issue.

9.1 The Board members have the ultimate responsibility for the business strategy, operations, quality, integrity of accounting, auditing, internal controls, and financial soundness of banks. The Board must have adequate collective knowledge of all types of activities and functions of the bank including granting of loans, accepting deposits, asset management, underwriting and trading with securities, trading in foreign exchange, risk management, internal control, accounting and information technology.

9.2 Ensure the application of the corporate governance in the bank according to its business activities and other relevant economic factors.

9.3 Provide a regulatory framework within the bank, in particular rules concerning the organisation structure and the conduct of business, including allocating the competences to the different bodies within the bank.

9.4 Ensure the integrity and appropriateness of the financial and accounting regulations, inclusive of those relating to preparation of financial reports; (Referencing Financial Reporting Guideline).

9.5 Financial reporting to the shareholders with respect to the business of the bank

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## 9.6 Ensure an appropriate process of disclosure and communication procedures; this includes the appropriate information to the public, creditors, investors and depositors.

9.7 Provide an effective internal control system.

9.8 Provide a system by which information of unlawful or unethical behaviour of the bank can be reported to the Board.

9.9 Provide a clear, efficient, and effective rules, dealing with conflict of interest.

9.10 Submit the required Financial Statements of the bank for approval to the Central Bank before submitting to the Annual General Meeting, Parent Company and the Security and Exchange Commission (for listed companies).

9.11 The Board shall ensure that the bank provides sufficient and timely information about its operations to all its members, to enable them carry out their duties correctly and efficiently.

### 10.0 Board Meetings

10.1 The chairperson, in his/her leadership, is responsible for the effective overall functioning of the Board. In fulfilling this role, the chairperson must—

i. Ensure that appropriate procedures are in place to govern the Board’s operation.

ii. Ensure that decisions are taken on a sound and well-informed basis.

iii. Ensure that all strategic and critical issues are considered by the Board, and that directors receive the relevant information on a timely basis.

iv. Encourage healthy discussion and ensure that dissenting views can be freely expressed and discussed; and

v. Lead efforts to address the Board’s developmental needs.

10.2 A Director must devote sufficient time to prepare for and attend Board meetings, maintain a sound understanding of the business of the financial institution as well as relevant market and regulatory developments. This must include a commitment to on-going education.

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## 10.3 A Director must attend at least 75% of the Board meetings held in each financial year and must not appoint another person to attend or participate in a Board meeting on his/her behalf, unless the person is identified as a proxy and approved by the Bank as an alternate Director.

10.4 A financial institution must ensure that attendance at a Board meeting, by way other than physical presence, remains the exception rather than the norm, and is subject to appropriate safeguards to preserve the confidentiality of deliberations.

10.5 In respect of the quorum for Board meetings, a financial institution must require at least two-third of the Board members to be present.

10.6 The Board must ensure that clear and accurate minutes of meetings are maintained to record their decisions, including the key deliberations, rationale for each decision made, and any significant concerns or dissenting views. The minute must indicate whether any director abstained from voting or excused himself from deliberating on a particular matter.

10.7 The financial institution must provide the Board with access to advice from third party experts on any matter deliberated by the Board as and when required.

### 11.0 Board Appointments and Disqualification

11.1 The appointment of Directors must be in accordance with Section 32 of the Banking Act 2009; Procedures for appointments to the Board shall be formal and transparent as outlined in Guideline 9 and 12. A formal and transparent procedure for the selection and appointment of new Directors to the Board helps promote investor understanding and confidence in that process. Shareholders shall be provided with biographical information of all new directors to be appointed. Such information shall include:

i. name, age, and country of principal residence.

ii. whether appointment is executive and if so the specific area of responsibility.

iii. working experience and occupation during the past ten years.

iv. other directorships (present and for the past five years).

v. shareholding in the corporate body and its subsidiaries.

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## vi. family relationship with any director and/or substantial shareholder of the corporate body or its principal subsidiaries.

vii. any conflict of interest.

11.2 The Board tenure must not be more than five years; the Chairperson and Directors must not serve more than two five-year terms.

11.3 Conditions for the disqualification of Board of Directors are outlined in Section 33 of the Banking Act 2009. Furthermore, a Director will be disqualified if he/she is not cleared in writing by the Bank prior to the appointment in accordance with Guideline 12.

### 12.0 Board Composition

12.1 The number of Board members must comply with section 32 of the Banking Act 2009 and meet the professional requirements as per Guideline 12, based on the complexity of the banks.

12.2 The composition of the Board shall target the strategic objectives of the bank with regards to the promotion of effectiveness and ensuring appropriated representational needs.

12.3 Members of the Board must have adequate professional knowledge and expertise enabling them to assume their oversight functions. They must have the ability to understand and make professional contributions with regards to strategy, operational activities, risk assessment and risk management, compliance with laws and regulations, accounting and financial reporting and communication. The Board shall have at least one Executive Director, any excess should be approved by the Bank.

12.4 New Directors shall be familiarised with the bank’s operations, Senior Management and responsibilities as well as in respect of the Board’s expectations. If new Directors have no Board experience, they shall receive training in their unaccustomed responsibility.

12.5 The Chairperson of the Board shall be a resident and independent non-executive Director. If otherwise, approval should be seek from the Bank.

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## 12.6 The Assessment of Independence shall be based on merit. An independent non-executive Director is independent of management and free of any business or other relationship that could materially interfere with – or reasonably be perceived to materially interfere with – the exercise of their unfettered and independent judgment.

12.8 The Board shall regularly assess the independence of each Director in the light of interests disclosed by them. To accomplish this, each Independent Director shall provide to the Board all relevant information. The tenure of each Director is important to an assessment of independence and shall be disclosed appropriately.

12.9 For the purpose of these guidelines, a Director would be considered independent if he/she:

i. Is not a major shareholder of the bank as per the Banking Act 2009;  
ii. Has not been employed by the bank in an executive capacity for the previous three years;  
iii. Is not a professional adviser or consultant to the bank;  
iv. Is not a significant supplier or customer;  
v. Has not served on the Board for a period which could reasonably be perceived to materially interfere with the Director’s ability to act in the best interests of the company;  
vi. Has no significant contractual relationship with the bank; and  
vii. Is free from any other relationship with the bank, which may interfere with his capacity to act in an independent manner.

12.10 Non-executive Directors shall not accept their appointments if they are of the view that they cannot provide the bank with the time and attention necessary to discharge the duties of office.

12.11 Non-executive Directors shall be persons equipped with the necessary skill and experience to bring an independent judgment to bear on the issues of strategy, performance, and resources, including key appointments and standards of conduct.

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## 12.12 Non-executive Directors of a bank shall not serve in the Board of more than 3 non-financial institutions and the Board of another financial institution unless approved by the Bank.

12.13 A cool off period of at least 2 years is required unless approved by the Bank for Board member to serve in another financial institution.

12.14 Independent Directors shall provide independent viewpoints and assistance to executive Directors.

### 13.0 Board Secretary

13.1 The Board Secretary’s role is indispensable in running the affairs of the Board. He/she shall be the head of the legal Unit/Department. However, if the bank does not have an existing legal Unit/Department, the Head, Risk Management, or Compliance Unit/Department may suffice.

### 13.1 Functions of the Board Secretary

i. The Board Secretary shall serve as a crossing point between the Board and Management and shall support the Chairperson in ensuring the smooth functioning of the Board;  
ii. The Board Secretary shall advise the Board on matters relating to statutory duties of the Directors under the law, disclosure requirements, and company law regulations as well as on matters of corporate governance requirements and effective Board processes;  
iii. The Board Secretary shall ensure that Directors are provided with complete, adequate and timely information prior to Board meetings; and  
iv. The Board Secretary shall be appointed by the Directors for such term and remunerations they may think fit, and may be removed by the Board, but without prejudice to any claim for damages for breach of any contract of service with the bank.

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## 14.0 Board Diversity

14.1 The prerequisite for a Board’s effective work is that its members complement each other’s knowledge, experience, qualifications, and skills.

14.2 The Bank reserve the right to reject a Board members application where the Director’s knowledge, qualification and experience does not enhance Board diversity.

14.3 Consideration should be given to gender diversity in the Board Composition.

### 15.0 Allocation of individual responsibilities

15.1 It is appropriate that Directors clearly understand corporate expectations. Formal letters of appointment for Directors setting out the key terms and conditions related to that appointment shall be issued.

15.2 Each Director shall:

i. Be familiar with the relevant laws and regulations on the bank’s operations;  
ii. Be familiar with the bank’s goals, basic values and strategies, as well as understanding how best to conduct his/her work to help reach these goals;  
iii. Fully understand the function of the Board and have good judgment and intuition;  
iv. Make independent decisions in each instance;  
v. Ensure that internal control is functioning satisfactorily and that the Board receives reliable, timely and accurate information necessary for the performing of its supervisory work, and that all decisions by the Board are adhered to;  
vi. Make certain that all Acts of law, rules and regulations are complied with; and  
vii. Endeavour to inspire good and positive morale amongst the staffs.

### 16.0 Role and Responsibilities of Board Chairperson

16.1 The Chairperson plays a crucial role in ensuring good corporate governance. The Chairperson is responsible for leadership of the Board, for the efficient organization and conduct of the Board functions and for the briefing of all Directors in relation to

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## issues arising at Board meetings. It is important that the chairperson facilitate the effective contribution of all Directors and promote constructive and respectful relations amongst Board members and management.

16.2 The Chairperson is required to:

i. Ensure that the Board meets once every quarter and that meetings are conducted in a proper manner;  
ii. Ascertain the views and/or the decision of the meeting on the issues being discussed;  
iii. Ensure that Directors are encouraged to contribute within their respective capabilities to secure the maximum benefit for the bank;  
iv. Be responsible for the Directors’ receipt of qualitative and quantitative information;  
v. Ensure that any non-executive Director who is not contributing to the deliberations of the Board is either not re-elected or requested to resign or removed; and  
vi. Ensure that the Board develops and implements a process for assessing the effectiveness of the Board, committees of the Board and the contributions of individual Directors.

16.3 In the absence of the Board Chairperson, a Non-Executive Director shall chair the Board meeting.

16.4 There shall be a separation between the roles of Chairperson and Managing Director/Chief Executive Officer of a bank. The two positions shall not be occupied by one person in any bank at the same time.

### 17.0 Performance Orientation and Training of the Board

17.1 Directors and key executives must be equipped with the knowledge and information they need to discharge their responsibilities effectively. The Board shall establish and disclose the process for performance evaluation of its members, Committees, and key executives. The performance of the Board and key executives shall be reviewed regularly against both measurable and qualitative indicators. The strategies, policies,