1. Corporate Governance Central Bank of Bahrain (Presented By Isa Al Motawaj) Director of Wholesale Banking Supervision 25th May 2011
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2. During 2010 the Ministry of Industry and Commerce and the Central Bank of Bahrain (CBB) have introduced new Corporate Governance framework reflecting the international best practice . Accordingly, banks were asked (in December 2010) to assess their Corporate Governance framework and submit the CBB a detailed assessment of actions needed to be taken to address any shortfalls in compliance. Corporate Governance framework must be part of banks’ AGM agenda held after 01/01/2011 The main changes
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3. Decision making process:
Increasing the role and responsibilities of Board
Board must meet frequently (not less than 4 times a year)
Each Director must attend at least 75% of Board meetings
Absentees must be reported in the AGM if the member stand for election.
Banks required to submit a report recording the meetings during the year.
One directorship of a Retail Bank or a Wholesale Bank (max two directorships of financial institutions inside Bahrain and 3 in public entities.
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4. Independence of Judgment & Representation of shareholders:
Expanding the definition of “executive director”
Half of the board should be non-executive directors and at least three of those persons should be independent directors.
In a bank with a controller, at least one-third of the board must be independent directors.
The chairman must not be an executive director (should be an independent) .
Board should review the independence of each director annually.
Prohibition of proxies.
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5. Personal accountability (can be sued by stakeholders)
Other areas:
Personal accountability (can be sued by stakeholders)
Audit Committee: at least three directors of which the majority must be independent including the Chairman.
Every committee must have a formal written charter.
Board training (each new director receives a formal and tailored induction).
Controlled functions (CEO, CFO, IA, CRM, etc.) must be approved and interviewed by the CBB prior to their appointments.
Banks must disclose their Corporate Governance.
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6. Thank You
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