Back Custom print Link Text Only Rich Text Print

  • HC-2 HC-2 Board Formation

    • HC-2.1 HC-2.1 Board Composition

      • HC-2.1.1

        The Board must comprise of individuals with a balance of skills, diversity and expertise, who individually and collectively possess the necessary qualifications commensurate with the size, complexity and risk profile of the licensee. The Board must have a sufficient number of independent directors.

        Added: April 2023

      • HC-2.1.2

        In case of a Bahraini conventional bank licensee with a controller, at least one-third of the Board must be independent.

        Added: April 2023

      • HC-2.1.3

        If the Bahraini conventional bank licensee has a controller or a group of controllers acting in concert, such person(s) must recognise their specific responsibility to the minority shareholders as Board members have responsibilities to the licensee’s overall interests, regardless of who appoints them.

        Added: April 2023

      • HC-2.1.4

        At least half of a Bahraini conventional bank licensee’s Board should be non-executive directors and at least three of those persons should be independent directors.

        Added: April 2023

      • HC-2.1.5

        The CBB may call upon each independent director at its discretion to have a general discussion on the affairs of the Bahraini conventional bank licensee.

        Added: April 2023

    • HC-2.2 HC-2.2 Board Member Selection

      • HC-2.2.1

        The Board must have a clear and rigorous process for identifying, assessing and selecting Board candidates. The Board, and not management, must nominate the candidates for shareholders’ approval.

        Added: April 2023

      • HC-2.2.2

        Board candidates must:

        (a) Possess the knowledge, skills, experience and, particularly in the case of non-executive directors, independence of mind necessary to discharge their responsibilities on the Board in light of the licensee’s business and risk profile;
        (b) Have a record of integrity and good repute;
        (c) Have sufficient time to fully carry out their responsibilities;
        (d) Not have any conflicts of interest that may impede their ability to perform their duties independently and objectively and subject them to undue influence from:
        i. Other approved persons, controllers or other connected parties;
        ii. Past or present positions held; or
        iii. Personal, professional or other economic relationships with other approved persons (or with other entities within the group); and
        (e) Not have more than two directorships of Bahraini banks, bearing in mind that two directorships of licensees within the same license category (e.g. ‘Retail Bank’) are not permitted.
        Added: April 2023

      • HC-2.2.3

        Board candidates should not hold more than three directorships in public companies in Bahrain. In case such directorships exist, there must be no conflict of interest, and the Board must not propose the election or re-election of any director where such conflict of interest exists.

        Added: April 2023

      • HC-2.2.4

        Nominated directors of a Bahraini conventional bank licensee must possess the requisite experience and competencies specified in Module TC (Training and Competency).

        Added: April 2023

      • HC-2.2.5

        A CEO of a Bahraini conventional bank licensee who has resigned or retired, must not be appointed as an independent director of the same bank unless a period of three years has passed from the date of his/her resignation/ retirement. Additionally, where a CEO is terminated from his/her position, he/she must not be appointed or retained as a Board member of the same bank.

        Added: April 2023

      • HC-2.2.6

        Each proposal by the Board to the shareholders for election or re-election of a director must be accompanied by a recommendation from the Board, a summary of the advice of the Nomination Committee and the following specific information:

        (a) The term to be served, which may not exceed three years;
        (b) Biographical details and professional qualifications;
        (c) In the case of an independent director, a statement that the Board has determined that the applicable rules and criteria for independent director have been met;
        (d) Any other directorships held;
        (e) Particulars of other positions which involve significant time commitments; and
        (f) Details of relationships (if any) between:
        i. the candidate and the conventional bank licensee, and
        ii. the candidate and other approved persons of the conventional bank licensee.
        Added: April 2023

      • HC-2.2.7

        Newly appointed non-executive directors must be made aware of their duties before their nomination, particularly as to the time commitment required.

        Added: April 2023

    • HC-2.3 HC-2.3 Board Members’ Appointment and Induction

      • Board Members’ Appointment

        • HC-2.3.1

          The chairperson of the Board must confirm to shareholders when proposing re-election of a director that, following a formal performance evaluation, the person’s performance continues to be effective and they continue to demonstrate commitment to the role.

          Added: April 2023

        • HC-2.3.2

          Where an independent director has served three consecutive terms on the Board, such director will lose his independence status and must not be classified as an independent director if reappointed.

          Added: April 2023

        • HC-2.3.3

          Bahraini conventional bank licensees must have a written appointment agreement with each director which recites the directors’ powers, duties and responsibilities, accountability, term, the time commitment envisaged, the committee assignment (if any), remuneration, expense reimbursement entitlement and their access to independent legal or other professional advice at the expense of the bank when needed to discharge their responsibilities as directors.

          Added: April 2023

      • Board Members’ Induction

        • HC-2.3.4

          The Board must ensure that:

          (a) Sufficient time, budget and other resources are allocated annually for the Board members’ induction programmes;
          (b) Each new director receives a formal and tailored induction and has access to ongoing training on relevant issues which may involve internal or external resources to ensure their effective contribution to the Board from the beginning of their term; and
          (c) The induction programmes include meetings with senior management, visits to the conventional bank licensee’s facilities, presentations regarding strategic plans, significant financial, accounting and risk management issues, compliance programs, and meetings with internal and external auditors and legal counsel.
          Added: April 2023

        • HC-2.3.5

          Board members must understand their oversight and corporate governance role and be able to exercise sound, objective judgment about the affairs of the licensee.

          Added: April 2023

        • HC-2.3.6

          All continuing directors must be invited to attend orientation meetings and all directors must continually educate themselves as to the conventional bank licensee’s business and corporate governance.

          Added: April 2023