• HC-A.1 HC-A.1 Purpose

    • Executive Summary

      • HC-A.1.1

        This Module presents requirements that have to be met by microfinance institution licensees with respect to:

        (a) Corporate governance principles issued by the Ministry of Industry and Commerce as "The Corporate Governance Code";
        (b) International best practice corporate governance standards set by bodies such as the Basel Committee on Banking Supervision; and
        (c) Related high-level controls and policies.
        January 2014

      • HC-A.1.2

        The Principles referred to in this Module are in line with the Principles relating to the Corporate Governance Code issued by the Ministry of Industry and Commerce.

        January 2014

      • HC-A.1.3

        The purpose of the Module is to establish best practice corporate governance principles in Bahrain, and to provide protection for customers and other microfinance institution licensee's stakeholders through compliance with those principles.

        January 2014

      • HC-A.1.4

        Whilst the Module follows best practice, it is nevertheless considered as the minimum standard to be applied.

        January 2014

    • Structure of this Module

      • HC-A.1.5

        This Module follows the structure of the Corporate Governance Code and each Chapter deals with one of the nine Principles of corporate governance. The numbered directives included in the Code are Rules for purposes of this Module. Recommendations under the Code have been included as guidance.

        January 2014

      • HC-A.1.6

        The Module also incorporates other high-level controls and policies that apply in particular to microfinance institution licensees.

        January 2014

      • HC-A.1.7

        All references in this Module to 'he' or 'his' shall, unless the context otherwise requires, be construed as also being references to 'she' and 'her'.

        January 2014

    • The Comply or Explain Principle

      • HC-A.1.8

        This Module is issued as a Directive (as amended from time to time) in accordance with Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). In common with other Rulebook Modules, this Module contains a mixture of Rules and Guidance (See Module UG-1.2 for detailed explanation of Rules and Guidance). All Rulebook content that is categorised as a Rule must be complied with by those to whom the content is addressed. Other parts of this Module are Guidance; nonetheless every microfinance institution licensee to whom Module HC applies, is expected to comply with recommendations made as Guidance in Module HC or explain its noncompliance by way of an annual report to its shareholders and to the CBB (see Chapter HC-8).

        January 2014

    • Monitoring and Enforcement of Module HC

      • HC-A.1.9

        Disclosure and transparency are underlying principles of Module HC. Disclosure is crucial to allow outside monitoring to function effectively. This Module looks to a combined monitoring system relying on the board, the microfinance institution licensee's shareholders and the CBB.

        January 2014

      • HC-A.1.10

        It is the board's responsibility to see to the accuracy and completeness of the microfinance institution licensee's corporate governance guidelines and compliance with Module HC. Failure to comply with this Module is subject to enforcement measures as outlined in Module EN (Enforcement).

        January 2014

    • Legal Basis

      • HC-A.1.11

        This Module contains the CBB's Directive (as amended from time to time) relating to high-level controls and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 (‛CBB Law'). The Directive in this Module is applicable to microfinance institution licensees (including their approved persons).

        January 2014

      • HC-A.1.12

        For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.

        January 2014

    • Effective Date

      • HC-A.1.13

        All microfinance institution licensees to which Module HC applies must be in full compliance by the financial year end 2014. At every microfinance institution licensee's annual shareholder meeting held after December 2013, corporate governance must be an item on the agenda for information and any questions from shareholders regarding the microfinance institution licensee's governance. The microfinance institution licensee must also have corporate governance guidelines in place at that time and must have a "comply or explain" report as described in Paragraph HC-A.1.8.

        January 2014