The United Bank strictly complies with Governance Principles, which are the set of rules and procedures that guarantee the Bank’s credibility, transparency and integrity.
It also defines the different responsibilities and duties of the various parties within the Bank, such as the Board of Directors, the Executive Management, the employees, its customers and any other related parties.
Implementing proper Governance Principles enables the Bank to follow a successful decision- making process, ultimately leading to professionally establish the necessary strategies and goals of the Bank through the Board of Directors, the Board committees and the Bank’s Executive Management.
This is done taking into consideration protecting Shareholders rights while adhering to prevailing laws, regulations and directives as well as the laws of the Central Bank of Egypt regarding effective Governance in order to preserve the overall strength of the Egyptian Banking System.
The Board of Directors:
The Board of Directors of the United Bank is formed of highly qualified professionals with the necessary banking experience, knowledge, abilities and skills.
The Board comprises nine members, two of whom are executive officers of the Bank and seven non-executive members, three of whom are independent members.
The composition of the Board is in accordance with the Principles of Governance, as outlined by the Central Bank of Egypt.
The main responsibilities of the Board include setting strategies and objectives of the Bank and ensuring their implementation, overseeing the Executive Management of the Bank, as well as establishing proper internal controls to ultimately guarantee a smooth, profitable and successful daily operations of the entire entity.
The Chairman and Managing Director :
The Chairman and Managing Director acts as the legal and official representative of the Bank vis a vis the regulatory authorities and the various state government bodies.
The Chairman and Managing Director is primarily responsible for implementing proper Governance principles, ensuring the smooth functioning of the various Board Committees established by the Board of Directors of the Bank, in addition to overseeing the overall daily operations of the Bank.
The Chairman and Managing Director endeavors to maintain a good rapport with the Executive Management in order to achieve the short and long- term strategies and objectives of the Bank.
Evaluation of the Board of Directors :
The Board of Directors adopts a specific self-assessment system for of itself and its related committees.
Among other things, this self-assessment measures the performance level of each Board Member and the Board’s commitment to its duties and responsibilities.
The Executive Management of the Bank :
The Executive Management of the Bank is primarily responsible for the Bank’s overall performance vis a vis the Board of Directors.
The Executive Management is formed of Senior Executives, who have the necessary expertise, knowledge and abilities required to implement the Bank’s strategy and to achieve the goals and objectives specified by the Board of Directors.
The Executive Management is ultimately responsible for the day to day supervision of the Bank’s operations through the Chief Executive Officer, his deputies and their assistants, the divisions heads and other officers of the Bank.
The Relationship Between the Board of Directors and
the Executive Management of the Bank :
The cooperation between the Board of Directors and the Bank’s Executive Management is paramount for implementing effective Governance, while at the same time clearly defining the authorities and tasks assigned to each group.
The Board’s main role is to develop short and long term business strategies of the Bank, while the Executive Management is responsible for the implementation of such strategies and specific policies ensuring that at all times risk is maintained at an acceptable level.
There should be a clear emphasis that total and clear independence of the Board and its Members from the Executive Management is essential to ensure the objectivity of the decision making process of the Board Members.
− In accordance with the provisions of the Central Bank of Egypt law Nº 88 of 2003 and its executive regulations and directives, the Board of Directors forms various committees with the purpose of assisting it in performing specific duties.
− The Board of Directors nominates the members of the various committees (with the exception of the Executive Committee)
− Among these committees are the : -
• Executive Committee;.
• Audit Committee.
• Risk Committee.
• Salaries and Remuneration Committee;
• Governance Committee.
• Investment and Asset Management Committee and
• Sharia ‘Supervisory Board Committee.
The Executive Committee
− The Committee is headed by the Bank’s Chairman, and includes among its members, Senior Officers of the Bank representing all the various divisions of the Bank.
− The main objectives of the Executive Committee are: -
• Safeguarding the Bank’s and Shareholders’ interests.
• Ensuring compliance with the strategies and goals set by the Board.
• Effective management of the Bank’s operations.
• Ongoing risk assessment and optimal utilization of Bank’s resources.
• Implementation of effective Internal Control Systems.
The Audit Committee
− The Members of the Audit Committee are exclusively non-executive members of the Board of Directors.
− The committee is required to comply with articles 27 and 28 of executives’ regulations under Central Bank of Egypt law Nº 88 of 2003.
− The committee’s main duties and responsibilities, include among other things the following: -
• Review and approve the annual audit plan of the Bank.
• Effective coordination between the audit duties and tasks of the Bank and those of the External Auditors to ensure a smooth relationship between the Head of the Audit Division and the External Auditors of the Bank.
• Prepare an annual report covering all the Committee’s activities and submit it along with its recommendations to the Board of Directors.
The Risk Committee :
− The majority of the members of the Risk Committee are non-executive Board Members.
− The Committee should be formed of at least three members.
− The Committee’s main duties and responsibilities include, among other things, the following:
• Proper Management of all types of risk.
• Close coordination with Risk Management Division of the Bank.
• Ensure full compliance with the various strategies and policies of the Bank regarding the Bank’s capital, liquidity management, credit risk management, operational risk management, internet banking risk, as well as any other risks the Bank may be exposed to.
• Prepare periodical reports to be submitted to the Board of Directions.
Salaries and Remuneration Committee :
− The Salaries and Remuneration Committee is formed of Non- Executive Board Members.
− The Committee’s main duties and responsibilities, include among other things, the following:
• Formulate remuneration policies and benefits for the Executive Management of the Bank and its Senior Officers. All such policies require the approval of the Board of Directors.
• On an annual basis, review and recommend the remuneration of the Board of Directors (both for executive & non-executive Board Members)
Governance Committee :
- The Governance Committee is formed of non-executive Board Members.
- Its main responsibility is to implement the highest international standards of Governance, which will impact the Bank’s by- laws, the various Board Committees charters and the various Corporate Governance policies such as the conflict of interest policy, disclosure policy and the segregation of duties policy.
The Investment and Asset Management Committee :
The Committee is formed of five Board Members including Executive and non-executive members and is headed by the Chairman and Managing Director of the Bank.
The Committee is responsible for managing the assets owned or acquired by the Bank and to dispose of such Assets in an optimal and timely manner.
The Committee is also endeavored with developing short and long term investment strategies.
Shariah Supervisory Board Committee :
The main purpose of the Committee is to opine on Muslim legal law (Shariah) with regard to the conformity and legality of business transactions presented to the committee as well as the conformity of “Islamic products and services” with the Shariah.
The Committee is formed of prominent Al. Azhar Scholars.
Control and Supervisory Divisions
Following is a brief summary of various divisions whose main role is supervisory in nature. These Divisions work closely with the Board Committees established by the Bank.
Risk Management Division :
The main task of this Division is managing, controlling and measuring all types of risks the Bank might be exposed to in its day to day operation, and to ensure that such risks are always maintained at acceptable levels.
It is also responsible for ensuring the risk appetite of the Bank is in line with the Board’s directives and instructions
Internal Audit Division :
The main task of this Division is to assess the internal control systems of the Bank and to ensure their full implementation.
This Division adheres to the Internal Audit Charter developed by the Bank which outlines the goals, activities and duties of the Audit Division.
Compliance Division :
The main task of this Division is to ensure that the Bank is fully compliant with all relevant policies, laws, regulations as well as Bank’s policies and procedures.
It is also responsible to apply all anti-money laundering measures as required by the Egyptian anti-money laundering law No 181 / 2008.
The External Auditors of the Bank
The Bank appoints two External Auditors who are responsible for conducting all the required audit functions.
The first appointed External Auditor is the “Accountability state Authority” (ASA), which is a government entity and the second is the accounting Firm “E & Y” (Ernst & Young), which is a privately- owned firm.
The accounting firm E&Y is appointed by the Board of Directors based on the recommendation of the Audit Committee. However, the final decision for this appointment lies with the General Assembly of the Bank, in accordance with the proper Governance Principles, which also require that such Auditor to be totally independent from the Bank and its Board of Directors, not being a shareholder of the Bank and also not being related to any Board member or any of its Executive Management Members.
Furthermore, the External Auditors should not provide any consultation services unless with the prior approval of the Audit Committee.
The tenure of the auditor’s appointment as an individual should not exceed five years, while in his capacity as an auditing firm should not exceed ten years.
Disclosure and Transparency
Full disclosure of Financial and non-Financial information to all concerned parties is an ongoing process. This disclosure is conducted periodically or upon the occurrence of any incident which necessitates immediate disclosure.
The Disclosure and Transparency of the Bank is guided by the directives issued by the \Regulatory Authority.
The Disclosure of information is effected through the publication of the annual report of the Bank and its posting on the Bank’s website and also by providing necessary information regarding the Bank’s operations through various channels of communication.
Stakeholder’s rights are safeguarded by publishing all the Bank’s information in the annual report issued by the Bank as well as the availability of all other pertinent information on the Bank’s website.
Conflict of Interest
The United Bank implements a strict Non-Conflict of Interest policy through its Board of Directors, Executive Management, Bank employees as well as through other related and non-related parties.
Sustainable Social Responsibility
In light of the importance of the Sustainable Social Responsibility concept, the Bank has established a new department “Eithar” that is responsible for implementing the social responsibility concept and to promote the sustainable economic growth and development of the society.