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Board Committees - Terms of Reference

Click to on the titles for more details:
  • Executive Committee Terms of Reference
  • Audit Committee Terms of Reference
  • Nomination, Remuneration & Corporate Governance Committee Terms of Reference
  • Risk Committee Terms of Reference

1. INTRODUCTION

The Risk Committee (the Committee) is a committee of the BBK Board of Directors. The Committee serves as a link between the Bank’s Management and the Board of Directors in fulfilling its oversight responsibilities in respect of the risks inherent in the businesses of the Bank and the control processes with respect to such risks. The Committee takes necessary decisions regarding matters under its authority and/or raises recommendations to the Board of Directors for approval/ratification as per the specializations, powers and responsibilities assigned to it by the Board of Directors.

2. PURPOSE & DEFINITIONS:

2.1 Purpose: The objective for the formation of the Risk Committee is to facilitate the business/operations of the Bank by establishment of an effective risk management framework through appropriate risk policies /processes, to monitor risk profile of the Bank to ensure that it is in accordance with risk appetite of the Bank and, to provide the support necessary to enable the Management to perform their assigned duties and responsibilities in an effective manner.  

2.2 Definitions: The ‘Bank’ means BBK, ‘BBK Group’ means BBK, its overseas branches and subsidiaries and the ‘Board’ means BBK Board. The ‘Chairman’ means the Chairman of the Committee. The terms ‘Independent’, ‘Non-Executive’ have the same meaning as defined under the CBB Rule Book and classified accordingly. 


3. COMPOSITION, MEETINGS AND FRAMEWORK:
3.1 Membership: The Committee will consist of no less than 4 members. The committee may include one ‘independent’ member, if required. The members of the committee can be changed/removed at the discretion of the Board of Directors at anytime. 

3.2. Tenure: The tenure of the committee shall be of one year. The tenure of the Director who joins in between would be for the remaining period of the year.

3.3 Meetings: The Committee will meet not less than 4 times per year. The Chairman may convene a meeting of the Committee at any time on reasonable notice. Participation in the meeting through video / tele conferencing is permitted in keeping with the provisions of the Board Charter. Attendance by Proxies is not permitted.

On an exceptional basis, the Committee will convene at the summons of its members or at the request of Management to discuss matters of urgency in order to avoid any delay to the business interests of the Bank. The number of members present for such meetings should be more than half of the members of the Committee. The convening of such meeting shall be done by the Chief Executive (to be coordinated by the Board Secretary) or, in his absence his delegate, and the present Committee members. 
 
3.4 Quorum: The quorum shall be of more than half of the members and must include the Chairman or the Deputy Chairman. The decisions/resolutions shall be adopted by simple majority of the participating members.  The Chairman shall have a casting vote. 

3.5 Chairman: The Chairman and Deputy Chairman must be a Director and appointed by the Board or alternatively elected by the members of the Committee in its first meeting after the appointment of its members. 

3.6 Secretary: The Board Secretary shall be the secretary to the Committee and attend all meetings of the Committee.

3.7 Resources: The Committee will be supported by the Board Secretary and the Management.

3.8 Minutes: The minutes of each meeting will be circulated by the Board Secretary to all members and additionally to other attendees, as appropriate. The Chairman will report/brief to the Board, if required. The minutes of each meeting will be circulated after being approved by the Committee to the Board of Directors and will be part of the agenda of the Board under items for information. 

3.9 Disclosure: The membership of the Committee, description of its duties and activities and attendance during the year may be disclosed in the Annual Report/ The Bank’s official website and to the shareholders.   

3.10 Attendees: The following 6 permanent invitees shall attend all meetings of Committee to assist the Committee in its proceedings – Chief Executive, Deputy Chief Executive (if any) , GM-Whole Sale banking and GM- Retail Banking  Chief Risk Officer , Chief Financial Officer and Head – Risk Management Department. These invitees shall not have any voting rights. Other Directors, members of Management or persons may also attend the meetings at the invitation of the Chairman. All invitees should withdraw from the meeting if required to do so by the Chairman. 

3.11 Training: The Committee shall make available to its new members a suitable induction and ongoing training where appropriate, as discussed with the Committee.

3.12 Resolutions by circulation: The Committee may adopt resolutions by correspondence, including mail, electronic or fax correspondence, provided that in order for resolutions taken in this manner to be valid, they shall be approved by all the members. Any member to whom a proposed resolution is sent and who fails to respond within three working days following the date on which the proposed resolution is sent to him shall be considered to have approved the resolution. The Board Secretary shall ensure that the documents related to the proposed resolutions are received by all members of the Committee.

3.13 General: The Committee will be guided by provisions under the Memorandum of Association and Articles of Association, Board Charter on matters related to its functioning and not specified in this document.

4. SCOPE:
4.1 The role of the Committee is to review risk policies and recommend to Board for approval. It will also examine and monitor the risk issues related to Bank’s business and operations and direct the Management appropriately. 

4.2 The Committee has authority to examine any matters within its responsibilities and to obtain such information as it may require from any Director, member of the Management or employee of the Group. The Committee will report on periodic basis to the Board. The Committee’s scope will involve related issues of the entire BBK Group and its authority extends to all relevant matters relating to the Group.

4.3 The Committee will review its terms of reference every three years commencing each new term for the Board.

5. TERMS OF REFERENCE:
5.1 DUTIES AND RESPONSIBILITIES OF THE CHAIRMAN
The Chairman is responsible for:
5.1.1 Ensuring Committee meetings are duly convened and that required quorum is present when required.
5.1.2 Approving agenda and related materials for the Committee meetings.
5.1.3 Ensuring that the meetings are conducted in an efficient and effective manner.
5.1.4 Ensuring that the Committee has sufficient information to take decisions.
5.1.5 Providing leadership to the Committee and assisting it in its responsibilities.
5.1.6 Reporting to the Board on deliberations and recommendations of the Committee.
5.1.7 Monitoring functioning of the Committee as per its Terms of Reference.
5.1.8 The Chairman or his Deputy shall be available at the Annual General Meeting to answer questions relating to the Committee’s functions.

5.2 DUTIES AND RESPONSIBILITIES OF THE COMMITTEE:
The Committee shall perform the following duties/responsibilities:

5.2.1 Review of Risk Policies: Review various risk policies (comprising inter-alia all areas of risk such as credit risk, credit process, market risk, operational risk, investments, liquidity risk, interest rate risk etc) submitted by the Management and present/recommend them to the Board of Directors for approval.
         
5.2.2    Risk Related Documents: Review various risk related documents such as Annual Risk Management Strategy, Liquidity Strategy, Internal Capital Adequacy Assessment Process (ICAAP),  tools & techniques and approach papers relating to Risk Management etc., and then recommending for approval of the Board wherever necessary.

5.2.3 Review of reports: Reviewing risk related reports presented by business units, support / control functions as required by various risk policies such as Investment Portfolio performance, Industry / Sector Concentration, Maximum / Large exposures, Market risk, Stress Testing etc. 

5.2.4 Any other regulatory / control / risk issues: Reviewing any regulatory, control, risk related aspects pertaining to the Bank such as Business Continuity, Anti Money Laundering etc., for necessary action.

5.2.5 In relation to the Risk Management function:
•  To monitor and review the effectiveness of the Bank’s risk management function, which reports  directly to the Committee in
    the context of the Bank’s overall risk management framework.
•  To review and recommend to the Board the risk management strategy.
•  To review, discuss and make recommendations regarding the selection, appointment and termination where appropriate of
    the Chief Risk Officer, who reports directly to the Committee.


6.     SELF-ASSESSMENT/PERFORMANCE EVALUATION:
The Committee will conduct an annual self-assessment of the performance of the Committee/members and report conclusions and recommendations to the Board. The mechanism of evaluation would be as per the evaluation process adopted by the Board for its committees.

 

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