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  • Strategy[versions up to October 2010]

    • HC-1.2.1 [versions up to October 2010]

      In most banks, shareholders, creditors, employees, depositors and investment account holders ('stakeholders') are unable to closely monitor management, its strategies and the bank's performance due to a lack of information and resources. A key responsibility of the Board is to fill the gap between uninformed stakeholders to whom it owes a duty of care, and the more fully informed executive management by monitoring management closely on behalf of stakeholders.

      October 07

    • HC-1.2.2 [versions up to October 2010]

      The Board is ultimately accountable and responsible for the affairs and performance of the bank. The Board must establish the objectives of the bank and develop the strategies that direct the on-going activities of the bank to achieve these objectives. The strategies must be communicated throughout the bank, and be disclosed publicly (e.g. via the website or in the annual report in an abbreviated form as applicable). In its strategy document, the Board must demonstrate that it is able to proactively identify and understand the significant risks that the bank faces in achieving its business objectives through its business strategies and plans.

      October 07

    • HC-1.2.3 [versions up to October 2010]

      The precise functions reserved for the Board, and those delegated to management and committees will vary, dependent upon the business of the institution, its size and ownership structure. However, as a minimum, the Board must establish and maintain a statement of its responsibilities for:

      a) The adoption and annual review of strategy;
      b) The adoption and review of management structure and responsibilities;
      c) The adoption and review of the systems and controls framework; and
      d) Monitoring the implementation of strategy by management.

      The Board may not delegate its ultimate responsibility to ensure that an adequate, effective, comprehensive and transparent corporate governance process is in place.

      October 07

    • HC-1.2.4 [versions up to October 2010]

      In its strategy review process under Paragraphs HC-1.2.3 a) and d), the Board must:

      a) Review the bank's business plans and the inherent level of risk in these plans;
      b) Assess the adequacy of capital to support the business risks of the bank.
      c) Set performance objectives;
      d) Review the performance of executive management; and
      e) Oversee major capital expenditures, divestitures and acquisitions.
      October 07

    • HC-1.2.5 [versions up to October 2010]

      The CBB expects the Board to have effective policies and processes in place for:

      a) Ensuring a formal and transparent Board nomination process;
      b) Appointing senior managers, and ensuring that they have the necessary integrity, technical and managerial competence, and experience;
      c) Overseeing succession planning and replacing key executives when necessary, and ensuring appropriate resources are available, and minimising reliance on key individuals;
      d) Reviewing the remuneration and incentive packages of the executive management and members of the Board of Directors and ensuring that such packages are consistent with the corporate values and strategy of the bank;
      e) Effectively monitoring and making formal (annual) evaluations of senior management's performance in implementing agreed strategy and business plans;
      f) Approving budgets and reviewing performance against those budgets and key performance indicators; and
      g) The management of the bank's compliance risk.
      October 07