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ANNUAL REPORT 2013

Corporate Governance

1.0. Corporate Governance Framework

Introduction

In 2013, Governance-related regulations and practices continued to evolve with a broadening scope, especially in Lebanon and the other countries of presence of the Bank Audi Group. In parallel, our Board continued to give sound Governance a particular importance. It also continued to monitor its Governance practices against its guidelines and applicable regulations, and successfully carried out, and drew actionable conclusions from, a formal evaluation of its practices and effectiveness.

Changes introduced during 2013 to the Governance framework of the Bank Audi Group include the adoption and or modification of a number of policies, both at Group and countries’ levels, notably in the areas of compliance, disclosure, social responsibility and others.

The Board is satisfied that, in 2013, it has fully discharged all its responsibilities as mapped in its yearly rolling agenda and has acted on the recommendations of its committees that also substantially discharged all of their own responsibilities.

Governance Framework

Bank Audi is governed by a Board of Directors consisting of up to 12 members (currently 10) elected by the General Assembly of shareholders for a term of 3 years. The responsibility of the Board is to ensure strategic direction, Management supervision and adequate control of the company, with the ultimate goal of increasing the long-term value of the Bank.

Bank Audi’s Governance framework and that of its major banking subsidiaries encompass a number of policies, charters, and terms of reference that shape the Group’s Governance framework over a wide range of issues including risk supervision, compliance, audit, remuneration, evaluation, succession planning, ethics and conduct,

CORPORATE GOVERNANCEbudgeting, and capital management. Clear lines of responsibility and accountability are in place throughout the organisation with a continuous chain of supervision for the Group as a whole, including effective channels of communication of the Group Executive Committee’s guidance and core group strategy. Strategic objectives setting corporate values and promoting high standards of conduct have been established and widely communicated throughout the Group, providing appropriate incentives to ensure professional behaviour.

The Bank’s Corporate Governance Guidelines are accessible on the Bank’s website at www.banqueaudi.com

The Board is supported in carrying out its duties by the Group Audit Committee, the Corporate Governance and Remuneration Committee, the Board Group Risk Committee and the Group Executive Committee.
  • The mission of the Group Audit Committee is to assist the Board in fulfilling its oversight responsibilities as regards (i) the adequacy of accounting and financial reporting policies, internal control and the compliance system; (ii) the integrity of the financial statements and the reliability of disclosures; (iii) the appointment, remuneration, qualifications, independence and effectiveness of the external auditors; and (iv) the independence and effectiveness of the internal audit function1.
  • The mission of the Corporate Governance and Remuneration Committee is to assist the Board in maintaining an effective institutional Governance framework for the Group, an optimal Board composition, effective Board process and structure, and a set of values and incentives for executives and employees that are focused on performance and promote integrity, fairness, loyalty and meritocracy.
  • The mission of the Group Risk Committee is to assist the Board in discharging its risk-related responsibilities. The Committee is expected to (i) consider and recommend the Group’s risk policiesand risk appetite to the Board, (ii) monitor the Group’s risk profile for all types of risks, and (iii) oversee the Management framework of the aforementioned risks and assess its effectiveness.
  • The mission of the Group Executive Committee is to develop and implement business policies for the Bank and to issue guidance for the Group within the strategy approved by the Board. The Group Executive Committee also supports the Group Chief Executive Officer in the day-to-day running of the Bank and in guiding the Group.
1 It is not the duty of the Audit Committee to plan or to conduct audits or make specific determinations that the Bank’s statements and disclosures are complete and accurate, nor is it its duty to assure compliance with laws, regulations and the Bank’s Code of Ethics and Conduct. These are the responsibilities of Management and of external auditors.