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Corporate Governance

Corporate governance is the overarching framework that specifies the distribution of roles and responsibilities between the board, committees, functions and individuals.

The corporate governance framework and risk management framework are reviewed at least annually by the board.

The board has three committees composed of non-executive directors:

The bank’s board of directors comprises:

The role of the board

The board is responsible for the long-term success of Profex Capital Bank within a framework of controls, enabling risk to be identified, assessed and managed. It is responsible for setting strategy, maintaining the policy and decision making framework in which this strategy is implemented and assessed, ensuring that the necessary financial and human resources are in place to meet strategic aims, monitoring Profex Capital Bank’s performance against key financial and non-financial indicators, and overseeing the system of risk management and setting values and standards.

The following matters have been reserved for the board to approve and cannot be delegated:

  • Profex Capital Bank’s long-term objectives and corporate strategy;
  • the annual budget and business plan;
  • the annual report, financial statements and dividends;
  • recommendation to shareholders of changes to the structure, size and composition of the board;
  • the Internal Capital Adequacy Assessment Process (ICAAP);
  • the Individual Liquidity Adequacy Assessment Process (ILAAP);
  • significant policies;
  • any changes to Profex Capital Bank’s executive management structure;
  • establishment of board committees and their terms of reference;
  • business acquisitions, disposals, investments (other than day to day operation of the treasury portfolio) and all funding arrangements; and
  • the delegated financial authorities and any proposals in excess of those authorities.

Division of responsibilities

The division of responsibilities between the chair of the board and the chief executive officer is clearly defined through their role profiles and has been approved by the board.

The role of non-executive directors

The role of Profex Capital Bank’s non-executive directors, which includes setting strategy and monitoring the performance of the executive, is documented in their role profiles.

Directors are subject to statutory duties to act in the best interests of Profex Capital Bank, which includes avoiding conflicts of interests and declaring interests as appropriate. This is also included in the role profile, together with an estimate of the time commitment required.

Time commitment of directors

The board has reviewed the external directorships of its directors and considered the current position to be appropriate. It has been agreed that any director taking on further directorships would notify the board in order for the position to be reviewed.

Board performance

The board undertakes regular effectiveness evaluations, normally through the circulation of a questionnaire by the company secretary, who then collates the results. Questions seek directors’ views on the effectiveness of the board, such as, the way in which the board works together as a whole and the nature of board debate. Directors also answer questions relating to their individual performance.

Induction and continuing professional development

New directors take part in an induction programme which includes meetings with the executives and chair and the provision of key corporate documentation.

The non-executive director learning and development programme is developed and updated based upon an analysis of the directors’ personal development plans and additional requests raised at board meetings.

During and in between board meetings, directors are updated on Profex Capital Bank’s performance, the competitive and regulatory environments in which it operates, corporate governance matters and other changes affecting Profex Capital Bank and the industry in which it operates.

Board committees

The board has delegated certain responsibilities to a number of committees, each of which operates under written Terms of Reference covering the authority delegated to it by the board.

The role of the Audit and Risk Committee

The purpose of the audit and risk committee is to exercise oversight over Profex Capital Bank’s financial statements, its systems of internal control, and the performance and effectiveness of the internal and external auditors. The committee is also responsible for the ensuring the effectiveness of Profex Capital Bank’s risk management systems, its framework and the robustness of internal controls based on Profex Capital Bank’s overall risk appetite, tolerance and strategy. It also sanctions loans in excess of executive authority. The responsibilities of the committee are set out in its terms of reference which can be found here.

Role of the Remuneration Committee

The committee’s responsibilities include setting the over-arching principles of bank-wide remuneration, making recommendations to the board in relation to director remuneration and determining the remuneration packages of the executives. The terms of reference can be found here. Profex Capital Bank’s remuneration statement can be found here.

Role of the Nomination Committee

The committee’s responsibilities include reviewing the overall size and structure of the board, which is captured in the annual agenda schedule, and making particular nominations to fill executive and independent director positions. The terms of reference can be found here.

As described in the terms of reference, the committee is authorised to use any forms of resources it deems appropriate, including external legal or other professional advice on any matters within its terms of reference at Profex Capital Bank’s expense, within any budgetary restraints imposed by the board. In reviewing the structure, size and composition of the board, the committee must take account of the need to ensure that the board’s decision-making is not dominated by any one individual or small group of individuals in a manner that is detrimental to the interest of Profex Capital Bank as a whole.  Before making a nomination, the committee evaluates the balance of skills, knowledge and experience of the board and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment including the time commitment expected.

Shareholder non-executive directors

The nomination committee assesses shareholder non-executive director candidates, directors who have been nominated to reflect the shareholder base, as to their fitness and propriety to carry out the role including their ability to meet the time commitment expected and the number of outside directorships they hold.

Independent non-executive directors and executive directors

For independent non-executive director and executive directors, the vacancies are advertised and a search firm may be engaged to identify candidates which meet the person specification and skills criteria specified by the nomination committee, which includes fitness and propriety, time commitment and outside directorships where applicable. Candidates are interviewed by the search firm and a panel of the nomination committee members. In all cases, references are obtained.  The nomination committee makes a recommendation to the board.

Board diversity policy

Profex Capital Bank’s board has agreed to an aspirational aim that the board will comprise a minimum of 25% females by 2019 and 33% females by 2022.

Profex Capital Bank has adopted a board diversity policy, which includes practical steps on how to meet that target, including:

  • considering diversity when making all independent non-executive director appointments;
  • challenging management to ensure the management population is made up of the most talented individuals;
  • ensure diversity is considered in succession planning; and
  • setting a culture that is values driven and inclusive.

Senior management recruitment

Profex Capital Bank has a recruitment policy covering the selection and appointment of senior management. This policy is reviewed every two years.

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