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Corporate Governance

Group Corporate Governance

 

NBK Group Board Members and the senior management  are committed to the long-term success of NBK Group as a leading bank in the Middle East – generating stable and sustainable returns for the shareholders.  Represented by the Board of Directors and the Executive management, the Group developed  the Corporate Governance and compliance culture across all of its entities, and established sound and effective corporate. In addition Corporate Governance standards are main fundamental that are reflected in the Group strategy in particular those defined by the Central Bank of Kuwait (CBK) and other related  guidelines.

 

The Group recognizes the importance of applying the principles and standards of good governance, as it follows the professional and ethical standards in all kind of deals, disclosure and transparency of the information accurately and in timely manner, these contribute to the development of Group work efficiency and enhancing the confidence of the shareholders, all related parties and stakeholders in the group's performance as well as the banking sector in Kuwait.

 

NBK Group’s Governance framework outlines a consistent approach across NBK Group entities. This framework is reviewed on a periodic basis by the Board of Directors.  

 

NBK Group as a whole, along with the board, senior management and all employees are collectively responsible for the effective implementation of Corporate Governance framework. The board sets the “tone at the top,” the management ensures that the Corporate Governance framework is implemented through a robust set of policies and procedures, and employees follow the corporate governance requirements in their day-to-day business.

 

Board of Directors

Mr. Nasser Musaed Al-Sayer

Chairman

Mr. Ghassan Ahmed Al-Khalid

Vice Chairman

Mr. Hamad Abdul Aziz Al-Sager

Board Member

Mr. Yacoub Yousef Al-Fulaij

Board Member

Mr. Hamad Mohamed Al-Bahar

Board Member

Mr. Muthana Mohamed Al-Hamad

Board Member

Mr. Haitham Sulaiman Al-Khaled

Board Member

Mr. Loay Jassim Al-Kharafi

Board Member

Mr. Emad Mohamed Al-Bahar

Board Member

Board Committees

For the effective implementation of corporate governance framework, the Group formed an appropriate number of committees that are aligned with the size of the group, the nature and complexity of its activities, and the geographical distribution of the Group’s entities. The Board of Directors formed five subcommittees to enhance the Board effectiveness on important Group operations.

The mandate and responsibility of each committee are defined and delegated by NBK Board of Directors. These are documented in comprehensive charters which list the detailed terms of reference for each NBK Board Committee. All these committees are formed with the non-executive members of  NBK Board holding relevant experience to the scope of the committee. These include:    

  • Audit Committee
  • Credit Committee
  • Risk Committee
  • Corporate Governance Committee
  • Nomination and Remuneration Committee.
  • Credit Committee

 

Audit Committee

Role:

The Board Audit Committee (BAC) is responsible for overseeing (1) The financial statements and reporting of the Group (2) Internal Controls and risk management framework (3) Internal Audit (4) Group’s relationship with its external auditors where the committee supervise and oversees the efficiency and independence of the internal and external audit operations of the Group, also oversees the preparation of the periodic financial statements and other regulatory reports The Committee is also responsible for the recruitment, dismissal, performance evaluation and remuneration recommendation of the Head of Internal Audit.

Members:

  • Mr. Hamad Mohammed Al-Bahar (Committee Chairman)
  • Mr. Haitham Sulaiman Al-Khaled 
  • Mr. Loay Jassim Al-Kharafi

Quorum:

A quorum of at least two members is required to convene a meeting. A new meeting must be convened if this quorum has not been attained. Only members of the particular committee, the Secretary of the Committee and NBK Group Chief Internal Auditor shall be entitled to attend the committee meetings. Moreover, members of management or representatives and other specialists may be invited to attend meetings at the request of the Committee.

 

Credit Committee

Role:

The Board Credit Committee (BCC) is responsible for review of the quality and performance of credit portfolio, oversee the effectiveness and administration of credit related policies and the review and approval of credit limits above certain thresholds.

Membership of the Credit Committee should not overlap with membership in either Board Audit Committee or Board Risk Committee. 

Members:

  • Mr. Hamad Abdul Aziz Al-Sager (Committee Chairman)
  • Mr. Yacoub Yousef Al-Fulaij
  • Mr. Muthana Mohamed Ahmed Al-Hamad
  • Mr. Emad Mohammed Al-Bahar

Quorum:

A quorum of at least two members is required to convene a meeting. A new meeting must be convened if this quorum has not been attained. Only members of the particular committee, the Secretary of the Committee shall be entitled to attend the committee meetings. Moreover, members of management or representatives and other specialists may be invited to attend meetings at the request of the Committee.

 

Risk Committee

Role:

The Board Risk Committee (BRC) is responsible for the review and monitoring of the NBK Group’s risk profile, risk strategy, risk appetite and risk controls. It also manages  NBK Group capital requirements by ensuring that NBK Group maintains an appropriate level and quality of capital and liquidity in line with its activities. The committee also reviews the ICAAP, stress test scenarios and the results of NBK Group. In addition, the Risk Committee reviews the associated risk and compliance processes, anticipates the impact of regulatory and legal change, ensures accountability of risk management, and flags any high-risk actions/transactions. The committee is also responsible for the recruitment, dismissal, performance evaluation and remuneration recommendation of the Chief Risk Officer. Members: 

  • Mr. Ghassan Ahmed Al-Khaled (Committee Chairman)
  • Mr. Haitham Sulaiman Al-Khaled 
  • Mr. Loay Jassim A Al-Kharafi

Quorum:

A quorum of at least two members is required to convene a meeting. A new meeting must be convened if this quorum has not been attained. Only members of the particular committee, the Secretary of the Committee shall be entitled to attend the committee meetings. Moreover, members of management or representatives and other specialists may be invited to attend meetings at the request of the Committee.
In the absence of the Committee Chairman, the present remaining members shall elect one of themselves to chair the meeting.

 

Corporate Governance Committee

Role:

The Corporate Governance Committee supports the NBK Board in the review of NBK Group corporate governance principles and practices at regular intervals, as well as the supervision of NBK Group Corporate Governance Office. 

The Corporate Governance Committee is responsible for monitoring the robustness of Corporate Governance policies and procedures developed, and the effective implementation of the disclosure framework. Furthermore, the CG Committee supervises the process of monitoring and reporting of conflict of interest & related party transactions.

Members: 

  • Mr. Nasser Musaed Al-Sayer (Board and Committee Chairman)
  • Mr. Hamad Abdul Aziz Al-Sager
  • Mr. Yacoub Yousef Al-Fulaij 
  • Mr. Muthana Mohamed Al-Hamad
  • Mr. Haitham Sulaiman Al-Khaled

Quorum:

A quorum of at least two members is required to convene a meeting. A new meeting must be convened if this quorum has not been attained. Only Members of the Committee and the Secretary of the Committee shall be entitled to attend the Committee meetings. However, members of management or representatives and other specialists or professional advisors may be invited to attend meetings at the request of the Committee.

 

Nomination & Remuneration Committee

Role:

NBK Board Nomination and Remuneration Committee is responsible for the review of the NBK Group’s remuneration framework and overseeing the NBK Group succession plan formulation process, suggesting recommendations with respect to NBK Executive Management remunerations. In addition, the Committee is responsible for the nomination of potential members, on boarding, training of new members  and raising the awareness of the NBK Board of Directors.  The  Committee also initiates and oversees the evaluation process of the NBK Board and NBK Committees. The committee is supported by the NBK Group’s Corporate Governance Office. 

Members: 

  • Mr. Ghassan Ahmed Al-Khalid (Committee Chairman)
  • Mr. Hamad Mohammed Al-Bahar
  • Mr. Emad Mohammed Al-Bahar
  • Mr. Muthana Mohamed Al-Hamad

Quorum:

A quorum of at least two members is required to convene a meeting. A new meeting must be convened if this quorum has not been attained. Only Members of the Committee and the Secretary of the Committee shall be entitled to attend the Committee meetings. However, members of management or representatives and other specialists or professional advisors may be invited to attend meetings at the request of the Committee.

Corporate Governance office

The implementation and maintenance of corporate governance frameworks across the NBK Group is of paramount importance to the NBK Board, and the management. The NBK Group therefore has established a centralized CGO to support and maintain the corporate governance practices across the NBK Group to ensure the quality of implementing Corporate Governance framework to support  NBK Board, the Chairman and other committees in fulfilling their administrative duties. CGO follows and reports to the  Corporate Governance Committee and  NBK Board, and consists of the following units:   

  • Investor relations (responsibilities include: enhancing the transparency and flow of information to investors)
  • Corporate governance quality control (responsibilities include: reviewing, monitoring and enhancing the quality of the corporate governance framework and benchmarking to the best international practices)
  • Disclosure & Transparency Unit (responsibilities include: ensuring the accuracy and the timely disclosure of information as a centralized and independent function at the Group level) 

Risk Managment and Compliance

 

The NBK Group Risk Management and Compliance Division is a centralized and independent function. The NBK Group CRO is the head of the Risk Management function and reports to NBK Board Risk Committee, his appointment, dismissal, remuneration and evaluation are also determined by the NBK Board Risk Committee.  Risk Management and Compliance is primarily responsible for identifying, measuring, monitoring, controlling and reporting the risk profile of the NBK Group. It assists and acts as the independent internal advisory to the executive management to actively assess and control the NBK Group’s overall risk. In coordination with the regional risk management units, the risk management and compliance function ensures:   

  • The overall NBK Group business strategy and business activities conducted are consistent with the risk appetite approved by the NBK Board. 
  • Develop Risk policies, procedures and methodologies that are tailored in a manner   to regions where Group entities operate and are consistent with the NBK Group’s risk appetite.
  • Appropriate risk management architecture and systems are developed and implemented for Group entities.
  • Adequate monitoring and oversight of risks and controls across  NBK Group. 

Internal Audit Division

The NBK Group Internal Audit Division is an independent function, mainly responsible for evaluating the adequacy and effectiveness of the NBK Group’s internal controls, ensuring compliance with policies, procedures and regulatory requirements. The NBK Group’s Internal Auditors are not assigned any executive responsibilities in order to maintain their autonomy and impartiality in fulfilling their duties and responsibilities. The Internal Audit Function reports directly to the NBK Board Audit Committee which is accountable for monitoring the overall performance of the function. 

Control environment

NBK Group maintains a sound control environment supported by a set of policies and procedures which are adhered to by all members across the NBK Group and are designed to specifically cater and accommodate the needs and requirements of the NBK Group. The effectiveness of internal controls is monitored through a well-structured control self-assessment program designed as per COSO framework. This is routinely monitored by the NBK Board and is subject to independent assessment and review, to identify enhancement opportunities and the effectiveness of the control framework.

 

 

Remuneration Governance

 

NBK Group remuneration process and its development are governed by the NBK Board Nomination and Remuneration Committee with the NBK Board holding the overall responsibility.

 

The NBK Remuneration Policy sets out key aspects and components of the remuneration of the NBK Executive Management and other employees. The NBK Group follows a consistent approach in applying the Remuneration Policy.

 

The policy stipulates the linkage to the NBK Group’s long-term strategic objectives and its risk- taking. NBK Group differentiates between remuneration of Senior Management, Material Risk-Takers and Control Functions. These are linked to key performance indicators subject to risk-adjusted approach. 

 

NBK Group applies a deferment approach up to three years (final vesting of the variable component). Vesting of the variable component is subject to achieving the long-term performance targets and risk materialization. Claw-back applies on the vested portions in case of not meeting long-term targets or risk materialization.  

 

Disclosures and Transparency

NBK Group is committed to providing timely, consistent, and accurate information to its stakeholders, which is consistent with legal and regulatory requirements within transparency framework. It ensures consistent disclosure practices are applied and all members of the business community, including individual investors, have prompt and simultaneous access to the disclosed information. Accordingly, the NBK Group has adopted a Disclosure and Transparency Policy containing the details of its disclosure requirements (financial, non-financial and regulatory disclosures), the guidelines for the NBK Group’s internal communication mechanisms and continuous coordination..

 

 NBK Group Disclosure and Transparency Unit is an independent centralized function responsible for administering and organizing the disclosure process within the NBK Group. It is also responsible for providing timely, accurate, high-quality and consistent information to internal and external stakeholders.

 

NBK Group and its subsidiaries (both local and overseas) cooperate with all regulatory authorities in jurisdictions where it operates, supplying them with accurate and timely information according to requirements of all applicable laws and regulations. The NBK Group Compliance Officer is responsible for dealing and communicating with the relevant regulatory authorities.

 

The disclosure framework covers the key quantitative and qualitative information related to financial performance and financial stability, risk management factors, remuneration, corporate governance, related-parties transactions, conflict of interest, substantial changes on business and others.

Stakeholder Rights

 

The shareholders have delegated the authority and responsibility for supervision and management of NBK Group to NBK Board, which in turn has delegated the authority and responsibility of NBK Group’s day-to-day operations to NBK Executive Management.

 

Shareholders’ rights are regulated by the companies’ laws, and include, but are not limited, to the following:   

  • Receive shares of dividends allocated for distribution 
  • Attend the NBK Group’s Annual General Meeting (AGM)
  • Participate in deliberations, vote on General Assembly resolutions
  • Disposal of shares
  • Peruse the NBK Group's records and documents with the permission of the NBK Board of Directors or the General Assembly pursuant to the NBK Group's Memorandum and Articles of Association.
  • Exercise their rights duly and indiscriminately.
  • Be aware of the rules which govern the voting procedures and Annual General Meeting
  • Be aware of any information with regard to the NBK Group's plans before voting in meetings or any other information

For more information, visit Investor Relations 
 

Customers

The NBK Group protects and abides by the rights provided to customers which include, but are not limited to, the following:
 

  • Fair and equal treatment
  • Present the available products accurately and transparently.
  • Participation in customer satisfaction survey and handling individual  customer complaints 

 

Employees

The NBK Group protects and abides by the rights provided to employees which include, but not limited to the following:  
 

  • Working in an environment with transparency
  • Contributing to employee talent-management schemes
  • Transparent remuneration and compensation structure
  • Access to the NBK Whistle-Blowing Policy

 

Community (Corporate Social Responsibility)

The NBK Group has been at the forefront of corporate leadership, devoted to corporate social responsibility. It is a responsibility the NBK Group takes seriously. The NBK Group strives to consistently integrate social growth and development as a fundamental part of the NBK Group’s missions and objectives.

Memorandum & Articles of Association

Articles of Association