• HC-1.2 HC-1.2 Role and Responsibilities

    • HC-1.2.1

      All directors must understand the board's role and responsibilities under the Commercial Companies Law or any other laws or regulations that may govern their responsibilities from time-to-time.

      In particular, all directors must understand:

      (a) The board's role as distinct from the role of the shareholders (who elect the board and whose interests the board serves); and the role of officers (whom the board appoints and oversees); and
      (b) The board's fiduciary duties of care and loyalty to the company and the shareholders (see section HC-2.1).
      July 2011

    • HC-1.2.2

      The board's role and responsibilities include but are not limited to:

      (a) The overall business performance and strategy and business plan for the company;
      (b) Causing financial statements to be prepared which accurately disclose the company's financial position;
      (c) Monitoring management performance;
      (d) Convening and preparing the agenda for shareholder meetings;
      (e) Monitoring conflicts of interest and preventing abusive related party transactions;
      (f) Selecting, compensating, monitoring and, when necessary, replacing key executives and overseeing succession planning;
      (g) Aligning key executive and board remuneration with the longer term interests of the company and its shareholders;
      (h) Ensuring a formal and trans-group board nomination and election process;
      (i) Ensuring the integrity of the corporation's accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control, and compliance with the law and relevant standards;
      (j) Assuring equitable treatment of shareholders including minority shareholders;
      (k) Ensuring compliance with the relevant rules and requirements relating to the issuing and offering of securities;
      (l) The ongoing obligations in respect of the listing requirements, including but not limited to issues relating to disclosure, dissemination of price sensitive information and other communication, and the prevention of market abuse and insider trading;
      (m) Compliance with the company's founding documentation, including but not limited to its Memorandum and Articles of Association and other relevant by-laws and resolutions;
      (n) Ensure that any loans provided by the company are approved by the board in accordance with their authority for such items, including the respective limits and other relevant terms; and
      (o) Providing approval in respect of the relevant fees, charges, subscriptions, commissions and other business and administrative sanctions, where relevant.
      Amended: January 2012
      July 2011

    • HC-1.2.3

      The directors are responsible both individually and collectively for performing these responsibilities. Although the board may delegate certain functions to committees or management, it may not delegate its ultimate responsibility to ensure that an adequate, effective, comprehensive and transparent corporate governance framework is in place.

      July 2011

    • HC-1.2.4

      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.
      July 2011

    • HC-1.2.5

      When a new director is inducted, the chairman of the board, or the company's legal counsel or compliance officer, or other individual delegated by the chairman of the board, should review the board's role and duties with that person, particularly covering legal and regulatory requirements and Module HC (see also rule HC-4.5.1).

      Amended: January 2012
      July 2011

    • HC-1.2.6

      The company must have a written appointment agreement with each director which recites the directors' powers and duties and other matters relating to his appointment including his term, the time commitment envisaged, the committee assignment if any, his remuneration and expense reimbursement entitlement, and his access to independent professional advice when that is needed.

      July 2011

    • HC-1.2.7

      The board is responsible for ensuring that the systems and controls framework, including the board structure and organisational structure of the company, is appropriate for its business and associated risks (see HC-1.2.4 c). The board must ensure that collectively it has sufficient expertise to identify, understand and measure the significant risks to which the company is exposed in its business activities.

      July 2011

    • HC-1.2.8

      The board must adopt a formal board charter or other statement specifying matters which are reserved to it, which must include but need not be limited to the specific requirements and responsibilities of directors.

      July 2011