The Independent Directors Committee (the Committee) is a committee of the BBK Board of Directors. The meeting of independent Board members in the absence of other Board members is recommended by the Kingdom of Bahrain’s Corporate Governance Code, the Central Bank of Bahrain (CBB) and international best corporate governance practice.
2. PURPOSE & DEFINITIONS:
2.1 Purpose: The objective for the formation of the Independent Directors Committee is to facilitate the regular review, debate and discussion of all actions and decisions of the Board to ensure that the rights and interests of the minority owners of the Bank are given due importance and protection in accordance with the prevailing laws, regulations and best market practice and raise any issues that do not protect these rights to the attention of the Board of Directors.
2.2 Definitions: The ‘Bank’ means BBK, its overseas branches and wholly owned subsidiaries and the ‘Board’ means BBK Board. The ‘Chairman’ means the Chairman of the Committee. The term ‘Independent’, shall have following meaning in line with the CBB’s definition:
- ‘Independent director’ means a non-executive director of the Bank who, or whose family shareholders either separately or together with him or each other, does not have any material pecuniary relationships or transactions with the Bank (not counting director’s remuneration for this purpose) and in particular who, during the one year preceding the time in question met all the following conditions:
- Was not an employee of the company;
- Did not:
- Make to, or receive from, the Bank payments of more than BD31,000 or equivalent (not counting director’s remuneration);
- Own more than a 10% share or other ownership interest, directly or indirectly, in an entity that made to or received from the bank payments of more than such amount;
- Act as a general partner, manager, director or officer of a partnership or company that made to or received from the Bank payments of more than such amount;
- Have any significant contractual or business relationship with the Bank which could be seen to materially interfere with the person’s capacity to act in an independent manner,
- Did not own directly or indirectly (including for this purpose ownership by any family member or related person) 5% or more of the shares of any type or class of the Bank;
- Was not engaged directly or indirectly as an auditor or professional advisor for the Bank, and
- Was not an associate of a Director or a member of senior management of the Bank.
- For purposes of this definition, the ‘payments’ referred to in paragraph (b)(i), (b)(ii) and (b)(iii) do not include monies received from dividends, deposits, investments and credit facilities arising from the Bank’s normal business activities, but instead ordinarily refer to monies received (and/or payable during the period in question) for services rendered to the Bank by the director or company concerned, or paid (or payable) by the concerned director or company to the Bank for services provided by the Bank.
- Dividends, deposits, investment accounts and credit facilities are to be considered under item (b)(iv) of this definition.
- For the purpose of the definition of “independent director”:
- Where the term “family” or “family member or related persons” is used reference is made to: spouse, father, mother, son(s) or daughter(s); and
- Where the term “associate” is used reference is made to:
- Spouse, father, mother, son(s) or daughter(s); or
- A person who is an employee or partner of the Director or of the firm represented or owned by the Director.
- In addition to the above mentioned CBB’s definition all nominated Directors are considered non-independent.
3.0 COMPOSITION, MEETINGS AND FRAMEWORK:
3.1 Membership: At all times independent directors will automatically become members of this Committee and their tenure will start when elected in a general assembly and will only cease when the director is no longer an independent director in accordance with the regulator definition.
3.2. Meetings: The Committee will meet at least once a 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 not permitted for this Committee; however, the level of participation using these means shall be decided upon on a case by case basis during force majeure events. Attendance by Proxies is not permitted.
3.4 Quorum: The quorum shall be of more than half of the members and must include the Chairman. The quorum shall continue throughout the meeting. The decisions shall be adopted by simple majority of the participating members. The Chairman shall not have a casting vote.
3.5 Chairman: The 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 Group Corporate 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 Group Corporate Secretary and the Management if necessary.
3.8 Minutes: The minutes of the Committee meetings shall be approved by the Committee at the end of each meeting. The final minutes shall be circulated to the members of the Committee not later than 5 working days. The minutes of each meeting will be circulated by the Group Corporate Secretary to all members and additionally to other attendees as appropriate. The Chairman may report to the Board on the proceedings of Committee meeting if required. The minutes 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: Only the independent Directors and the Group Corporate Secretary attend the meeting. However, the Committee has the right to invite any member of the management to attend a part of the discussion as and when required.
3.11 Training: The Committee shall make available to its new members a suitable induction, ongoing training where appropriate, as discussed with the Committee. This is in addition to the training and refresher courses that are provided for all members of the Board.
3.13 General: The Committee will be guided by provisions under the Kingdom of Bahrain’s Code of Corporate Governance, the CBB’s Rulebook, the Memorandum of Association and Articles of Association of the Bank, and the Board Charter on matters related to its functioning and not specified in this document.
4.1 The role of the Committee is to provide independent analysis of issues raised to the Board and raise recommendations to the Board if required. This will include determining whether actions or decisions taken by the Board or its other Committee have any material of negative impact to the interests and rights of the minority owners of the Bank.
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’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 at least every three years or as and when required.
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 if required.
5.1.7 Monitoring functioning of the Committee as per its Terms of Reference.
5.1.8 The Chairman 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:
5.2.1 The Committee shall exercise its duties and responsibilities as per its scope mentioned under 4.0 above.
5.2.2 The Committee will discuss issues of interest to minority/small shareholders.
5.2.3 The Committee shall be responsible to discuss major issues of conflict of interest of its institutional shareholders/Board members or any other related parties.
5.2.4. The Committee shall bring to the attention of the Board such issues mentioned in 5.2.1, 5.2.2 & 5.2.3 and make suitable recommendations for the consideration of the Board.