HC-1.3 HC-1.3 Composition
HC-1.3.1
Captive insurance firms are exempt from the requirements of this Section, except for Paragraph HC-1.3.2, which apply to allBahraini insurance licensees .January 2011HC-1.3.2
The Memorandum and Articles of Association of licensees must adequately set out procedures for the appointment, removal and retirement of
Directors .January 2011HC-1.3.3
For
insurance firms , the Board must comprise at least fiveDirectors . ForBahraini insurance licensees , other thaninsurance firms , the Board must comprise at least threeDirectors . For allBahraini insurance licensees , at least half the Board's members, including the Board's chairman, must benon-executive Directors .January 2011HC-1.3.4
The Board should have no more than 15 members, and should regularly review its size and composition to ensure that it is small enough for efficient decision making yet large enough to have members who can contribute from different specialties and viewpoints. The Board should recommend changes in Board size to the shareholders when a needed change requires amendment of the
insurance licensee's Memorandum of Association.Amended: October 2014
January 2011HC-1.3.5
Potential
non-executive director s should be made aware of their duties before their nomination, particularly as to the time commitment required. The Nominating Committee should regularly review the time commitment required from eachnon-executive director and should require eachnon-executive director to inform the Committee before he accepts any Board appointments to another company. One person should not hold more than three directorships in public companies in Bahrain with the provision that no conflict of interest may exist, and the Board should not propose the election or reelection of any director who does.January 2011HC-1.3.6
The Board must periodically assess its composition and size and, where appropriate, reconstitute itself and its committees by selecting new
Directors to replace long-standing members or those whose contributions to the licensee or its committees is not adequate.January 2011HC-1.3.7
A Board member may have a maximum of two Directorships of financial institutions inside Bahrain. However, two Directorships of licensees within the same category of licensees would not be permitted. For purposes of this Rule only, insurance firms and reinsurance firms are considered as different categories.
Insurance firms may approach the CBB for exemption from this limit where the Directorships concern financial institutions within the same group.Amended: April 2011
January 2011HC-1.3.8
A
non-executive Director is aDirector who is not involved in the day-to-day management of the licensee and is not anemployee of the licensee. The Chairman of the Board cannot, therefore, also perform the role ofChief Executive .January 2011HC-1.3.9
The Board's
non-executive Director s must comprise a sufficient number ofindependent Director s to apply independent judgement to, amongst other things, tasks where there is a potential for conflict of interest or there is a need for impartiality.January 2011HC-1.3.10
The appointment of Board members is conditional on the approval of the CBB (See Section AU-1.2).
January 2011
