• Specific Requirements

    • HC-1.1.3

      The Board must establish and maintain a statement of its responsibilities, defining its functions and tasks and those delegated to Board sub-committees and senior management. This statement must be clearly communicated to Board members and senior management.

      October 2010

    • HC-1.1.4

      For the purposes of HC-1.1.3, the CBB expects licensees to maintain detailed mandates for Boards and sub-committees. These mandates should be reviewed periodically by the Board. Depending on the size and complexity of the licensee concerned, the CBB also expects the Board to operate appropriate sub-committees.

      Amended: April 2016
      October 2010

    • HC-1.1.5

      The Board must approve and review at least annually the licensee's:

      (a) Strategic plans;
      (b) Management structure and responsibilities; and
      (c) Systems and controls framework (including its policies).
      Amended: January 2020
      Added: October 2010

    • HC-1.1.6

      The Board must also regularly review:

      (a) The licensee's implementation of its strategy and operational performance;
      (b) The performance of its executive management; and
      (c) The level of risk.
      October 2010

    • HC-1.1.7

      The Board must set out clearly and review on a regular basis who has authority to commit the licensee to contractual obligations. The Board must set a materiality threshold so that contractual obligations above this set threshold are regularly reported to the Board. In setting the materiality threshold, the Board must consider the financial impact the contractual obligations may have in relation to its capital.

      October 2010

    • HC-1.1.8

      The Board must must establish and disseminate to employees policies and processes for the identification, reporting and prevention or management of potential conflicts of interest, including matters such as:

      (a) Related party transactions;
      (b) The misuse of the licensee's assets; and
      (c) The use of privileged information for personal advantage ('insider trading').
      Amended: April 2016
      October 2010

    • HC-1.1.9

      The Board and its members must act with honesty, integrity, due skill and care, and in the best interests of the licensee, its shareholders and customers.

      October 2010

    • HC-1.1.10

      In assessing compliance with Paragraph HC-1.1.9, the CBB will take into account all actions of the Board and its members. The interest of the licensee includes the licensee's continued compliance with all relevant rules and regulations, and the interests of employees, customers and other stakeholders. The interest of shareholders includes the current and future value of the licensee, its status as a going concern, transparency and disclosure of information to the market.

      October 2010

    • HC-1.1.11

      The Board must oversee the process of disclosure to all stakeholders. The Board must ensure that the licensee's communications are fair, transparent, comprehensive and timely.

      October 2010

    • HC-1.1.12

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

      (a) Approving and reviewing at least annually the overall business performance and strategy for the licensee;
      (b) Causing financial statements to be prepared which accurately disclose the licensee's financial position;
      (c) Ensuring a formal and transparent Board nomination process;
      (d) Convening and preparing the agenda for shareholder meetings;
      (e) Monitoring conflicts of interest and preventing abusive related party transactions;
      (f) Appointing senior managers, after assessing that they have the necessary integrity, technical and managerial competence, and experience;
      (g) Overseeing succession planning, and minimizing undue reliance on key individuals;
      (d) Reviewing key senior management and Board remuneration packages and ensuring such packages are consistent with the corporate values and strategy of the licensee and encourage prudent risk taking;
      (e) Monitoring and evaluating management's performance in implementing agreed strategy and business plans, and ensuring appropriate resources are available; and
      (f) Approving budgets and reviewing performance against those budgets.
      Amended: April 2016
      October 2010

    • HC-1.1.13

      In assessing the systems and controls framework (see Paragraph HC-1.1.5), the CBB would expect the Board to be able to demonstrate that the licensee's operations, individually and collectively:

      (a) Are measured, monitored and controlled by appropriate, effective and prudent risk management systems commensurate with the scope of the licensee's activities. These should pro-actively identify as well as monitor risk. The systems should produce information on a timely basis, and in a form and quality appropriate to the needs of the different recipients;
      (b) Are supported by an appropriate control environment. The risk management and financial reporting functions must be independent of business lines and must be run by individuals not involved with the day-to-day running of the various business areas; and
      (c) Make effective use of the work of internal and external auditors. The internal audit function should be independent of the senior management, reporting to the Board. The Board should ensure that the external audit firm and its partners are truly independent of the licensee and have no financial or other relationship with the licensee. Audit findings should be used as an independent check on the information received from management about the licensee's operations and performance and the effectiveness of internal controls.
      Amended: April 2016
      October 2010