Corporate Governance
National Finance House (NFH) is
committed to establishing and maintaining the highest standards
of corporate governance in line with industry best practice, in
order to ensure fairness for all stakeholders, and to achieve
organisational efficiency.
Structure
NFH has put in place a robust corporate
governance structure that clearly sets out the objectives of the
Company, together with the means and incentives through which
the Board and Management pursue objectives that are in the best
interests of the Company and its shareholders. This structure
facilitates effective monitoring, and encourages the most
efficient use of resources.
Principles
The corporate governance structure of
NFH is based on a number of critical principles. These include:
an independent, active and engaged Board of Directors that has
the skill to properly oversee and direct Management; a Code of
Business Conduct to guide directors, managers and staff in their
daily administration of the Company’s business; the imposition
of effective controls and monitoring systems; and the
dissemination of timely and accurate information to
shareholders, regulatory authorities, and other stakeholders.
Board of Directors
The Company is managed by a Board of Directors, consisting of
ten non-executive directors elected by the Ordinary General
Meeting by secret ballot for a period of three years renewable.
The full Board meets for a minimum of four times each year. The
Board of Directors is accountable to the Company’s shareholders
and other stakeholders to ensure that NFH is managed in a safe
and sound manner, and with an appropriate balance between
financial performance and fulfillment of its public purpose.
Board Committees
The Board has established two committees – Executive Committee
and Audit Committee – to assist it in carrying out its
responsibilities.
Executive Committee
This committee consists of four
directors and the General Manager. Its responsibilities include
developing a group strategy for approval by the Board;
overseeing the financial, operational and safety performance of
the Company; and guiding the Company in its relationships with
all stakeholders.
Audit Committee
This committee consists of a minimum
of two non-executive directors. Its responsibilities include
reviewing the integrity of the Company’s financial reporting;
selecting external auditors for approval by shareholders;
monitoring the activities and performance of the internal audit
function; and ensuring compliance with all relevant laws and
regulations.
Management
The Board has delegated authority to the
General Manager for the day-to-day management of the Company. He
is supported in his duties by a Management Team consisting of
Head of Financial Control, Head of Retail, and Head of
Operations, Head of Collection & Legal Affairs; and two
committees: Management Committee and Credit Committee.
Ethical Business
Conduct
The Board has approved a corporate governance structure for
the Directors, Executive Management, and Staff. The structure
binds signatories to the highest standards of professionalism
and due diligence in discharging their duties. It also outlines
areas of conflict of interest, confidentiality, and the
responsibilities of signatories to adhere to best practices.
Compliance
The Company conducts its business in
compliance with all relevant bye-laws, rules and regulations
pertaining to financial institutions. These comprise Central
Bank of Bahrain rules and guidelines; legal compliance; and
international accounting standards. NFH has well-documented Know
Your Customer guidelines, and a Customer Due Diligence Policy
and procedures. The Company has appointed a Compliance Officer,
a Money Laundering Reporting Officer (MLRO) and a Complaints
Officer.
Communications with Stakeholders
The Company conducts all communications with its
stakeholders in a transparent, accurate and timely manner.
Main channels of communications comprise an annual general
meeting, annual report, quarterly and annual financial
statements, corporate website, and regular announcements in
the appropriate local media.
Risk Management
The Company has put in place
a robust risk management framework to ensure the identification
of all risks to which NFH may be exposed, and the implementation
of all necessary policies, procedures and systems to effectively
monitor and manage these risks.
Risk Exposure
The main risks to which NFH is exposed, are the following:
Credit risk
Interest
rate risk
Liquidity risk
Compliance risk
Operational & IT risk
Credit Committee
The Company has established a Credit
Committee, which consists of the General Manager, Head of
Financial Control, Head of Retail, Head of Operations and Head
of Collection & Legal Affairs. This committee acts as a forum
for the discussion of any matters relating to credit risk. It
sets credit policies and procedures, oversees the operation of
the credit process, and approves loans within its authorisation
limits.
Business Continuity
The Company is in the process of
finalising a comprehensive business continuity plan to ensure
that NFH can continue to function effectively in the event of an
emergency, disaster or systems failure. Phase one of the
development of a fully-fledged disaster recovery site is
currently under implementation.
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Corporate Governance and Risk Management
