corporate governance
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Corporate Governance

1. Brief Introduction


In line with its commitment to serve the best interests of its shareholders and broader stakeholders’ community, Fenicia Bank S.A.L. is keen on adopting the best practices in corporate governance set by the Central Bank of Lebanon and the Basel Committee on top of Fenicia Bank’s CG guidelines and all applicable laws and regulations. The Bank is moving forward towards its aim of bringing mechanisms and practices in all governance areas up to international standards and leading best practices.

 

2. General Governance Framework


Preset goals of corporate governance improvement have been attained, and further initiatives were assumed in compliance with the Bank’s decision of ongoing Corporate Governance enhancement. Major initiatives can be presented as follows:

  • Adopting and implementing the recommendations received from FIN (the leading international firm in providing advisory services related to combating and preventing illicit financing), through the fulfilment of all the requirements concerning FCC policies, programs, systems and controls to meet the global standards.
  • Revising the Board of Directors structure to meet the global standards through establishing an FCC Compliance Board-Level committee, to ensure the direct involvement of the BOD by overseeing the bank’s wide culture of compliance, FCC policies, programs and Risk management.
  • Developing and implementing an FCC training program with its core elements that meet the global standards, to provide our employees with practical knowledge and competencies accumulation in Combating Financial Crimes, although crafting a culture that respects Banking Ethics, Rules and Regulations.
  • Investing more in Human capital, to assure the availability of the proper resources and qualifications to meet the uprising challenges, along with acquiring the international professional certificates related to the various banking fields and functions.The code for

Corporate Governance Code at Fenicia Bank S.A.L. is constantly submitted for reviews and enhancements; it had been lately subject to improvements and was approved by the Board of Directors in 2016. The guidelines adopted by Fenicia Bank S.A.L. provide the framework for the governance structure at the Bank. They lay down the responsibilities of the Board in setting and reviewing the strategic direction, monitoring management, ensuring that objectives are being attained, overseeing the actions of the committees, keeping close oversight over internal control, and following up risk management and Internal Audit recommendations implementation, and related parties transactions. The Guide also sets forth the structure and roles and responsibilities of the different governance organs at the Bank including the Board committees, audit, control, and risk management.

 

 3. Organizational Structure

 

 

 

4. Bank Committees


4.1 Board Committees:

  • Audit Committee
  • Governance and Remuneration Committee
  • Risk Committee

4.2 Management Committees:

  • AML / CFT Special Committee
  • Assets & Liabilities Committee
  • Credit Committees (3 Sub Committees)
  • Credit Rating Committee
  • FATCA Committee
  • Financial & Estate Placements Committee
  • Information Security Committee
  • Procedures & Internal Control Committee
  • Training Committee
  • Archiving Committee

 

 5. Fenicia Bank Board Governance


5.1 Board of Directors Roles and Responsibilities

Fenicia Bank’s Board of Directors has wide authorities to implement the decisions of the General Assembly and to exercise the non day-to-day activities required to run the business normally. The Board of Directors supervises the setting of the Bank’s strategy and its implementation and oversees the performance of the Bank’s management in alignment with the strategy and objectives and sets standards for evaluations and remunerations.

It assumes its role and derives its authority from the provisions of the Code of Commerce and the laws that organize the banking activities in Lebanon and from the Bank’s Bylaws.

The Board ensures proper care of the legitimate interests of the shareholders, depositors, and stakeholders and the building of trust in and for the Bank and ensures that proper governance procedures are in place and abided by. The Board ensures the proper implementation of the required control procedures and oversees the financial reporting and audit systems and follows up on the work of the internal audit unit and the external auditors.

The Board of Directors sets the general policy of risk management at the Bank and ensures its efficiency and proper implementation. It is responsible for the transparency of its activities’ results and for the Bank’s abidance by the applicable laws and circulars.

 

5.2 Responsibilities of the Chairman

The Chairman of the Board of Directors represents the Bank to third parties and executes the Board’s decisions and facilitates the daily operations of the Bank, as stated by the bylaws, and under the supervision and control of the Board of Directors. The Chair provides leadership to the Board and is responsible for the Board’s effective overall functioning.

 

5.3 Composition of the Board

The Board shall be composed of a maximum of twelve members, of whom, the majority shall be non-executive members and at least one-third shall be independent directors. The independent directors of the Bank should meet the definition of independence as stipulated in BDL circular 118 dated 21/7/2008.

The directors act within their “duty of care” and “duty of loyalty” towards the Bank.

The Board is composed in a way to collectively have adequate knowledge and experience relevant to each of the current and foreseen financial activities of the Bank including areas of finance, audit, banking, strategy, governance, and risk management.

 

5.4 Board and Committees

 

 

Board Composition

Board Committees

Directors

Date of Joining the Board

Audit Committee

Governance & Remuneration Committee

Risk Committee

Category*

Membership**

Membership**

Membership**

Membership**

Mr. Abdul Razzak Achour

1992

E

C

 

 

 

Mr. Mohsen Naamani

2012

E

M

 

 

M

Dr. Assaad Khocheich

2012

E

M

 

 

M

Dr. Mohamad Cheaib

1992

I

M

C

 

 

Dr. Georges Najjar

2012

I

M

 

 

C

Mr. Michel Fernayni

2012

I

M

M

           C

M

Mr. Aziz Maacaron

1992

NE

M

M

           M

 

Mr. Youssef Merhi

1992

NE

M

M

           M

 

Mr. Abdallah Achour

1992

NE

M

 

 

 

 

*E=Executive I=Independent NE=Non-executive

**C =Chairman M=Member


 

 

 5.5 Board Committees

The Board delegates some of its responsibilities to its committees and maintains the duty to follow up on the actions, findings, and recommendations of these committees and taking the actions deemed appropriate.

 

 5.5.1 Audit Committee

 

5.5.1.1 Membership

The Audit Committee consists of four non-executive directors, two of whom are independent. The Chairman of the Committee is considered by the Board to be independent.

The Board has determined that the Committee Chair, Dr. Mohamad Cheaib, possesses relevant financial and audit experience required for the Audit Committee to fulfill its tasks.

 

 5.5.1.2 Role & Responsibilities

The main mission of the Audit Committee is to assist the board in fulfilling its supervisory role and responsibilities mainly related to:

  • The independence and qualifications of the External Auditors and the Internal Audit Unit.
  • Oversight of the financial reporting process and accounting policies, control of financial statements’ soundness, and review of the disclosure standards adopted by the Bank.
  • The adequacy and effectiveness of the audit systems and the internal control policies and procedures.
  • The follow up on any observations, or recommendations highlighted by the External Auditors, supervisory authorities, the Internal Audit Unit, or the Compliance Department and follow-up on the implementation of the remedial measures.
  • The abidance by the Central Bank circulars and the Banking Control Commission circulars and reports and all other applicable regulations
  • The assurance of proper oversight over the compliance systems and the procedures to address any reported non-compliance.

 

5.5.2 Governance and Remuneration Committee

 

5.5.2.1 Membership

The Governance and Remuneration Committee consists of three non-executive directors, one of whom is independent. The Chairman of the Committee is considered by the Board to be independent.

The Board has determined that the Committee Chair, Mr. Michel Fernayni, possesses the experience required for the Governance and Remuneration Committee to fulfill its tasks.

 

5.5.2.2 Role & Responsibilities

The main roles of the Governance and Remuneration Committee are as follows:

  • Assisting in setting the various corporate governance policies, recommending them to the Board for approval, and following-up on their implementation.
  • Clarifying the roles and responsibilities of the Board of Directors and its committees and ensuring their proper exercise.
  • Verifying that the Bank is operating within the frame of the corporate governance principles.
  • Regularly reviewing and updating the corporate governance code and principles in compliance with the guidelines issued by the Basel Committee and the supervisory authorities and in line with international best practices.
  • Developing the Remuneration Policy and Remuneration System at the Bank and presenting them to the Board for approval, reviewing them on regular basis, and overseeing their implementation.
  • Recommending the remuneration of senior executives to the Board of Directors.
  • The proper disclosure concerning the remuneration and their related policy according to the regulatory bodies’ recommendations. The proper planning and implementation of the Bank’s Board succession Plan.

 

5.5.3 Risk Committee

 

5.5.3.1 Membership

The Board Risk Committee consists of two independent members and two executive members. The Chairman of the Committee is considered by the Board to be independent.

The Board has determined that the Committee’s Chair, Dr. George Khalil Najjar, possesses the experience required for the Board Risk Committee to fulfill its tasks.

 

 5.5.3.2 Roles & Responsibilities

The main roles of the Risk Committee are as follows:

Assisting the board in setting the risk strategy and policies and in determining, measuring, monitoring, and managing all the risks that the bank is exposed to.

  • Verifying that the bank operations and goals stay within its risk appetite.
  • Supervising the sound adoption of the risk management principles in coherence with the regulations of the Central bank, Banking Control Commission and Basel Committee.
  • Verifying that the risk management implementation is compliant with the bank risk strategy.
  • Advising the Board on the Bank’s overall current and future risk tolerance.
  • Ensuring the independence and competence of the risk management unit and overseeing its activities.

 

 6. External Auditor


The External Auditors of Fenicia Bank S.A.L. are Grant Thornton and PricewaterhouseCoopers. The External Auditors were appointed by Board of Directors upon a recommendation by the Audit Committee.

The External Auditors are independent from the Bank and its directors. The Audit Committee is responsible for ensuring that the External Auditors remain independent.

 

 7. Conflicts of Interest and Related Party Transactions

The Bank has developed a Conflict of Interest Policy that promotes transparency, fairness and disclosure in issues underlying a conflict of interest or related party transactions. The Policy delineates the procedures for avoiding conflicts of interest to the extent possible with the appropriate disclosure mechanisms, and for identifying and dealing with actual, potential, or perceived conflicts of interest, and disclosing them where un-prevented.

 

 8. Professional Conduct Rules

Fenicia Bank S.A.L. ensures that the Bank at all employee levels abides by the highest standards of legal and ethical conduct. The Bank has developed a Code of Conduct and established mechanisms for monitoring compliance by it and all applicable laws and regulations. It has developed procedures for employees to confidentially report any violations and for the Bank to act upon and resolve the faced issues.

Fenicia Bank s.a.l. is strongly committed to the following values that frame the scheme of its activities within and outside the work environment:

 

Fast Service (We satisfy customer needs at the time they need the service)

Efficiency (We execute operations within a small margin of error)

Neutrality (We show no favors and engage in no discriminatory behavior)

Integrity (We act ethically and honestly towards our organization and stakeholders)

Consistency (We maintain uniformity across our products and services to ensure customer satisfaction)

Innovation (We propose new ideas and/or ways of doing things)

Accountability (We hold the responsibility for and consequences of our actions)