Corporate Governance National Finance House

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 the highest levels of organisational efficiency and effectiveness.

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 is designed to establish and maintain an environment which adopts the highest standards of ethical business conduct, 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 Conduct to guide directors, managers and staff in their day-to-day 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 Board consists of eight directors of which two are independent 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 fulfilment of its public purpose.

Board Committees

The Board has established three committees – Executive Committee, Audit & Corporate Governance Committee, and Remuneration and Nomination Committee – to assist it in carrying out its responsibilities.

Executive Committee

This committee consists of three directors and the Chief Executive Officer. Its responsibilities include overseeing the financial, operational and safety performance of the Company, guiding the Company in its relationships with all stakeholders and developing a strategic plan for approval by the Board.

Audit & Corporate Governance Committee

This committee consists of four directors of which two are independent 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.

Remuneration & Nomination Committee

This committee consists of three directors of which the majority are independent directors. Its responsibilities include evaluating and recommending the composition of the Directors and sub committees; considering and recommending the appointment of Directors including Independent Non-Executive Directors; and determining the processes for evaluating the effectiveness of individual directors and the Board as a whole.

Management

The Board has delegated authority to the Chief Executive Officer for the day-to-day management of the Company. He is supported in his duties by a qualified and experienced management team, and five committees: Management Committee, Credit Committee, Risk Management Committee, Asset & Liability Committee and IT Steering Committee.

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 customer due diligence policy, processes and procedures. The Company has appointed a Compliance Officer, a Money Laundering Reporting Officer (MLRO) and a Complaints Officer.


Communication 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, semi-annual and annual financial statements, corporate website, and regular announcements in the appropriate local media.