Circular dated November 11, 2021 amending some governance provisions regarding the formation of the Council

Cairo on: November 11, 2021

Dear Mr. Chairman of the Board of Directors,

Greetings,

With reference to the Bank Governance Instructions issued on August 23, 2011, which addressed some of its provisions regarding the formation of banks' boards of directors and the necessity of having a suitable number of qualified members for their positions, while considering appropriate diversity in capabilities, skills, expertise, and knowledge,

And the importance of achieving balance and independence between executive and non-executive members of the Council, as well as independent non-executive members, while considering that the majority of Council members must be non-executives.

And in line with international best practices in this regard, which ensures the enhancement of governance practices followed by banks and strengthens

Banks' boards of directors' supervision of executive management's operations,

The Board of Directors of the Central Bank, in its session held on October 26, 2021, has decided the following:

First: Amendment of the following provisions of the Bank Governance Instructions issued on August 23, 2011, effective from the date of expiration of the current term of the Board of Directors:

1. Amendment of Item No. (1-2-2) within Item (2-2) regarding the formation of the Board of Directors, to read as follows:

"The Bank's Board of Directors should consist of a suitable number of qualified members for their positions as members of the Board of Directors or its subsidiary committees, and they should have sufficient understanding of their tasks, with appropriate diversity in capabilities, skills, expertise, knowledge, and age group. It should be considered that there is a member representing the Board of Directors to represent minority shareholders if their total shareholding is 5% or more of the total shareholdings. It should also be considered that the representation of women in the Bank's Board of Directors should not be less than two members at least."

2. Amendment of Item No. (3-2-2) within Item (2-2) regarding the formation of the Board of Directors, to read as follows:

"There must be a complete separation between the responsibilities and tasks of the positions of the Chairman of the Board of Directors and the Chief Executive Officer (Managing Member). The same person shall not hold the position of Chairman of the Bank's Board of Directors and the duties of the Chief Executive Officer. The competencies and responsibilities of each shall be determined and documented in writing and approved by the Board of Directors, with the Chairman of the Board of Directors being a non-executive member."

3. Amendment of Item No. (2-5-2-2) within Item (5-2-2) regarding balance and independence, to read as follows:

"The Council's composition must include a maximum of two executive members, and the remaining members must be non-executives, with at least two independent non-executive members among them. The responsibility of supervising the performance of senior management lies with the non-executive members. It should be considered that the term of membership of the Board of Directors for a non-executive member shall not exceed two terms with a maximum duration of six consecutive or separate years, and it may be extended for one additional term (three years) for strong reasons and with the approval of the Central Bank."

Second: It is requested that the Chairmanship of the Board of Directors' committees be held by non-executive members, with the allowance for a single independent member to chair more than one committee, except for the Audit Committee, such that an independent non-executive member who chairs the Audit Committee shall not chair any other committee.

Please be kind enough to direct towards compliance with the aforementioned decision.

Accept our highest regards,

Tarek Amer