Commitment to Corporate Governance

Finance Bank Zambia Limited is committed to ensuring good corporate governance. The bank believes that good corporate governance enhances shareholder value. Finance Bank aims at complying with best international practices on corporate governance. Adherence to corporate governance principles is articulated in a number of corporate documents. The Articles of Association of the bank define the respective roles of management, the board of directors and shareholders in the administration of the bank. The bank has standard written rules for the internal operation of the boards of directors, a corporate governance charter, and a code of conduct for directors and rules on business ethics for staff, all of which aim at ensuring transparency and accountability. The board of directors has adopted Bank of Zambia Corporate Governance guidelines to guide its corporate governance framework. The bank's governance practices are also guided by the Basel Committee standards on corporate governance. The composition of the board includes executive, non-executive and independent directors. Non-executive directors always constitute a majority of the board.

 BOARD COMMITTEES

 1. Risk Committee

Composition

The Committee is composed of  four non-executive directors and the Chief Executive Officer/Deputy Managing Director. Members have good knowledge of business, finance, banking,   general management and credit. The Head of Risk serves as Secretary to the Committee.

 Responsibilities:

• Participates in the determination and definition of policies and guidelines for the approval of credit, operational, market/price and other risks within the bank; defining acceptable risks and risk acceptance criteria;

• Sets and reviews credit approval limits for management;

• Reviews and ratifies operational and credit policy changes initiated by management;

• Ensures compliance with the bank's credit policies and statutory requirements prescribed by the regulatory or supervisory authorities; 

• Reviews periodic credit portfolio reports and assesses portfolio performance; 

• Reviews all other risks i.e. technology, market, insurance, reputation, regulations, etc.

• Ensures compliance with all applicable laws, regulations and operating standards.

2. Audit Committee

Composition

Membership is composed of four non-executive directors and Director Audit, the Chief Executive Officer/ Deputy Managing Director are in attendance upon invitation, where appropriate. All members have business knowledge and skills and familiarity with accounting practices and concepts. The Manager Audit serves as secretary to the committee.

 Responsibilities:

• Reviews internal controls including financial and business controls;

• Reviews internal audit function and audit activities;

• Facilitates dialogue between auditors and management regarding results  of audit reviews;

• Makes proposals with regard to external auditors and their remuneration;

• Works with external auditors to review annual financial statements before full board approval;

3. Loans Review Committee

Composition

The committee is composed of four non-executive directors, the Chief Executive Officer, Deputy Managing Director and Executive Director Credit. Members have business knowledge and skills in accounting and credit management. Assistant Director  Credit  serves as Secretary.

 Responsibilities:

• Reviewing and approving credit related strategies and policies for the Bank.

• Reviewing and monitoring the Bank's lending and credit related activities.

• Approving loans submitted to the Committee for approval.

• Monitoring concentrations of credit by product, industry and geographic area

• Approving asset quality standards with respect to all lending areas, including but not limited to, standards for loan concentrations and liquidity.

MANAGEMENT COMMITTEES

1.  Executive Committee

Composition

The Executive Committee is comprised of the Chief Executive Officer, Deputy Managing Director and Executive Directors. Managing Director designates Secretary of the Committee. 

 Responsibilities

• Is responsible to the board and plays an important role in the bank's corporate governance structure.

• Manages the broad strategic and policy direction of the bank, submits recommendations to the board for approval where necessary, and oversees their implementation.

• Has decision - making powers in specific areas of bank management. In particular,   works with and assists the Chief Executive Officer to:  

• Define and develop bank's strategic plan ;

• Confirm alignment of individual  plans with overall bank strategy

• Track and manage strategic and business performance against plan ;  

• Implement bank policy and decisions ;

• Make recommendations on various issues relating to staff ;

• Track and monitor progress and accomplishments on major bank initiatives and projects at affiliate level ;

• Articulate appropriate response to regulations, government policies  and other such issues across the bank ;

• Articulate policies for advancing bank objectives ;

• Make important decisions in areas where delegation of authority is granted.

 2.  Management Committee [MANCO]

Composition

Management Committee consists of the Chief Executive Officer, Deputy Managing Director, Executive Directors, Directors,  and other members upon invitation.

Responsibilities

In addition to the day-to-day management of the bank's operations, the role of the Management Committee includes the following: 

• Managing the strategic objectives of the bank's operations in line with strategy

• Defining overall business goals and objectives for the bank's operations

• Ensuring alignment of operating plans with overall bank strategy

• Approving business unit direction and strategies

• Making decisions on operating plans and budgets

• Reviewing the financial reporting and control framework

• Tracking and managing bank strategic and business performance against plan

• Tracking and monitoring progress and accomplishments on major initiatives and projects

• Articulating appropriate response to regulation, government policies, and other such issues in the country

• Articulating policies for advancing business objectives   

3.  Country Credit Committee

Composition

The Country Credit Committee is composed of the Chief Executive Officer, Deputy Managing Director, Executive Directors- Credit, Finance, Retail Banking & Operations, Corporate Banking and Assistant Director Legal. Assistant Director Credit serves as secretary of this committee.

Responsibilities:

• Implementation of the Bank's credit risk management policies and ensuring that procedures are put in place to manage and control credit risk and the quality of the portfolio.

• Develop and recommend credit risk management policies for approval by the board.

• Implement the risk management policies

• Manage, monitor and control credit risk;

• Develop and implement appropriate management information systems to permit the effective analysis and the sound and prudent management and control of existing and potential credit risk exposure;

• Monitor and control the nature and composition of the bank's credit portfolio;

• Manage impairments back to health;

• Develop an internal credit risk rating model;

• Review and assess the credit portfolio and credit risk management programme.  

4. Asset Liability Committee

Composition

This committee is composed of the Chief Executive Officer, Deputy Managing Director, Executive Director Finance, Executive Director Credit, Executive Director Retail Banking and Operations, Director Treasury and International Banking and Assistant Director Treasury. Assistant Director-Management Accounting  serves as secretary of this committee.

 Responsibilities:

Specific functions of ALCO are:

• To receive and review reports on liquidity risk, market risk and capital management

• To identify balance sheet management issues like balance sheet gaps, interest rate gap/profiles that lead to under performance

• To receive deposit pricing strategy for the local market

• To review liquidity contingency plan for the bank.

• To decide on the bank's pricing strategies

5. Risk Committee

Composition

This committee is composed of the Chief Executive Officer, Deputy Managing Director, Executive Director Retail Banking & Operations, Executive Director Credit, Head Risk Management & Compliance, Director Audit, Assistant Director Operations, Director Treasury. Manager Compliance serves as Secretary to the Committee.

Responsibilities:

• Participates in the determination and definition of policies and guidelines;

• Reviews operational and credit policy changes initiated by management;

• Ensures compliance with the bank's credit policies and statutory requirements prescribed by the regulatory or supervisory authorities;  

• Reviews all other risks i.e. technology, market, insurance, reputation, regulations, etc.

• Ensure compliance with all applicable laws, regulations and operating standards.

 6. Audit Committee

Composition

The Audit Committee comprises of the Chief Executive Officer, Deputy Managing Director, Executive Director Retail Banking & Operations, Director Audit, Head Risk Management & Compliance. Manager Audit serves as secretary.

Responsibilities:

• Reviews internal controls including financial and business controls;

• Reviews internal audit activities;

• Facilitates dialogue between auditors and management regarding results of audit reviews;

7.  Managers Conference

Responsibilities:

The Managers Conference is a collegial forum of all business heads and functional heads for reviewing and embedding bank strategy and policies. The Managers Conference is the primary co-ordinating body for bank cohesion and integration and the actualisation of bank strategy. The Conference is a consultative body & not a decision-making body.

The Conference plays a key role in facilitating the harmonization and integration of the bank strategy. Its role includes:

• Sharing and disseminating information, experiences and best practices across the bank;

• Initiating policies that encourage integration and promote the 'Centralisation concept';

• Promoting integration and standardization of bank policies and procedures;

• Promoting and monitoring compliance with bank operational standards;

• Contributing to the formulation of bank policies;

• Advising on local laws and regulation impacting on bank policies.