Conflict of Interest Policy
for the Board Members

BBK applies the highest corporate governance standards, which encompasses high levels of business integrity, honesty, accountability and transparency that ensure independence of Board members’ judgment and avoiding any kind of personal or organizational conflict of interest with that of the Bank (BBK) with a view to serve the best interest of the Bank, its shareholders and other stakeholders. This policy is developed taking into consideration the Commercial Companies Law, the Central Bank of Bahrain rulebook and international best practice.

Note: The threshold for materiality for as far as this policy is concerned is BD 100,000

Each member of the Board must understand that under the Commercial Company Law he/she is personally accountable to the Bank and the shareholders if he/she violates his/her legal duty of loyalty to the Bank. A code of conduct is signed by all Board members confirming their approval to avoidance of conflict of interest procedures set out by the Bank.  Board members are to exercise the duty of loyalty by avoiding the actions mentioned under clause 4. below and to serve the Bank’s interest in any transaction with a company in which one has a personal interest.

A Board member should be considered to have a “personal interest” in a transaction with a company if:

is a party to the transaction or has a material financial interest in the transaction. (Transactions and interests which are de minis in value should not be included.)

• He/she himself/herself
• A member of his/her family (i.e. spouse, father, mother, sons, daughters, brothers or sisters)
• Another company of which he is a director or controller

Each Board member must make every practicable effort to arrange his/her personal and business affairs to avoid a conflict of interest with the Bank. Any decision to enter into transactions, under which Board members would have conflicts of interest that are material, should be formally and unanimously approved by the full Board.

A Board member must:

• Avoid, to the extent possible, activities that could create conflicts of interest or the appearance of conflicts of interest. An approved person shall be considered to have a “personal interest” in a transaction with a company if they themselves, or a member of their family (i.e. spouse, father, mother, sons, daughters, brothers or sisters), or another company of which they are a director or controller, are a party to the transaction or have a material financial interest in the transaction or are expected to derive material personal benefit from the transaction (transactions and interests which are de minimis in value should not be included);
• Promptly disclose any matter that may result, or has already resulted, in a conflict of interest;
• Abstain from getting involved in or voting on any matter where they may have a conflict of interest or where their objectivity or ability to properly fulfil duties to the Bank may be otherwise compromised. Any decision to enter into a transaction in which an approved person appears to have a material conflict of interest must be formally and unanimously approved by the entire Board;
• Act with honesty, integrity and care for the best interest of the Bank and its shareholders and other stakeholders;
• Not use properties of the Bank for their personal needs;
• Not misuse or misappropriate the Bank’s assets or resources;
• Not disclose confidential information of the Bank or use it for their personal profit or interest;
• Make every practicable effort to arrange their personal and business affairs to avoid a conflict of interest with the Bank;
• Not take business opportunities of the Bank for themselves; and
• Not compete in business with the Bank or serve the Bank’s interest in any transaction with a company in which they have a personal interest.
• Not enter into competition with the Bank;
• Not demand or accept substantial gifts from the Bank for himself or connected persons;
• A rigorous review and approval process to follow before they engage in certain activities (such as serving on another Board) so as to ensure that such activity will not create a conflict of interest;
• Annually declare in writing all their other interests in other enterprises or activities (whether as a shareholder of above 5% of the voting capital of a company, a manager or other form of significant participation) to the Board or a designated Board committee.

Where a member of the Board of Directors, using his best judgement, comes to the conclusion that he may have a conflict of interest with regard to a decision to be taken by the Board of Directors, he/she shall immediately declare so to the Chairman of the Board or the Head of Group Corporate Secretariat.  When the Chairman of the Board of Directors is personally involved he shall immediately declare to the Deputy Chairman who will take necessary action.

Where there is a potential for conflict of interest, or there is a need for impartiality, the Board must assign a sufficient number of independent Board members capable of exercising independent judgement, to address the conflict.

Any member of the Board of Directors having declared a conflict of interest concerning a decision of the Board shall leave the meeting room during the time of discussing that subject and if the issue is sent by circulation the concerned Board member shall abstain from voting on the subject.

6.1 Each Board member must on annual basis and on as and when arise basis inform the entire Board of (potential) conflicts of interest in their activities with, and commitments to other organizations or any situation that will give rise to conflict of interest. This disclosure must include all material facts in the case of a contract or transaction involving the Board member.

6.2 If a member of the Board of Director is offered an official or professional position which may give rise to a permanent conflict of interest as regards his duties and responsibilities as a member of the Board of Directors of the Bank, he shall inform the Chairman of the Board or the Group Corporate Secretary and shall seek to ascertain whether accepting such position would be compatible with his duties and responsibilities as member of the Board.

6.3 The Board member must understand that any approval of a conflicted transaction is effective only if all material facts are known to the Board and the conflicted person did not participate in the decision. In any case, all Board members must declare in writing all of their other interests in other enterprises or activities (whether as a shareholder of above 5% of the voting capital of a company, a manager, or other form of significant participation) to the Board on an annual basis.

6.4 All issues of conflict of interest and related party interests/transactions, material contracts or loans involving Board members and Board members interest in the Banks shares are to be disclosed in the annual report of the Bank.

6.5 Board members should declare their first degree relatives that would probably be employees at the Bank prior to employment and the board shall decide on the same.

6.6 Any other disclosures as required by the regulatory authority and as and when required.

6.7 Transactions with related parties must be made on an arm’s length basis.

The Board shall review and take necessary decisions/measures regarding any case of non-compliance with this policy.