The Board

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• Role of the Board

  The Board of Directors (the “Board”) is the Bank’s principal decision-making forum. It has overall responsibility for leading, supervising and controlling the Bank and is accountable to the shareholders for creating and delivering sustainable shareholder value through its guidance and supervision of the Bank’s business. In particular, it sets the goals, strategies and policies of the Bank. The Board monitors the performance of the Bank’s businesses and guides and supervises the Bank’s management.

  The Board, acting directly and through its Committees, is responsible for the supervision of management of the business and affairs of the Bank, with the objective of enhancing shareholder value.

  The Board has adopted a rolling agenda to ensure that each of its responsibilities is satisfied on a periodic basis, and considers other agenda items on an ‘as required’ basis.

• Structure and composition

  In accordance with the Bank’s articles of association, the Bank’s Board of Directors comprises 11 Directors – 10 of the Directors are non-executive Directors elected or appointed by the Bank’s shareholders, and the CEO serves on the Board as an Executive Director.

  The Board considers that there is an appropriate balance of executive and non-executive Directors on the Board and that the size and balance of the Board is appropriate.

  The majority of the Directors are UAE nationals, as per the requirements of the Federal Commercial Companies Law and the Bank’s articles of association. Collectively, the Board possesses knowledge, experience and skills appropriate for the Bank.

  The Board maintains awareness of the other commitments of its Directors and is satisfied that these do not conflict with their duties and time commitments as Directors of the Bank.

  The roles of the Chairman and the CEO are separate and each is held by a suitably experienced individual. There is a clear division of responsibilities between the respective roles and responsibilities of the Chairman and the CEO. The Chairman’s main responsibilities include:

  • To lead the Board and ensure the effective engagement and contribution of all Directors, so that the Board may fully discharge its legal and regulatory responsibilities;
  • To ensure effective communication with shareholders and ensure that the Board members understand the views of the major shareholders;
  • To oversee the annual performance evaluation of the Board and individual Directors;
  • To develop a constructive relationship with the CEO and to manage his performance.

  The day to day management of the Bank has been delegated by the Board to the CEO and the senior management team. The CEO and his senior management team are responsible for controlling and monitoring the Bank’s business on a day to day basis, recommending strategy to the Board, managing the Bank’s staff and implementing the Board’s strategic and operational decisions.

• Appointment, retirement and re-election

  According to the Bank’s articles of association, all Directors are required to seek re-election by shareholders every three years. In the event that a vacancy arises, Directors are permitted to elect any individual nominated to fill the vacancy, but any director so appointed must seek election by shareholders at the next annual general meeting. One-third of the Board will seek re-election on an annual basis.

  Any candidate for appointment as a Director must first be considered and approved by the Board’s Nomination, Compensation & HR Committee. Amongst other things, the Committee will consider whether the skills held by the candidate Director are suitable. The Committee has agreed a list of skill requirements necessary for the proper functioning of the Board as a whole. Where necessary, the Committee will also consider whether the candidate meets the Bank’s criteria for independence. Where Abu Dhabi Investment Council intends to appoint a new Director, it is required to consult with the Committee in advance of such appointment.

  Any Candidate for appointment as a Director must, be pre-approved by the UAE Central Bank.

  The CEO is an Executive Director of ADCB in accordance with the Bank’s articles of association, and as such is not eligible for election.

• Directors’ independence

  The Bank is committed to sound corporate governance practices. In particular, the Bank recognizes the damage that could be created by conflicts of interest at Board level, whether disclosed or undisclosed. Therefore, although banks are exempted from the mandatory application of the SCA’s Code of Corporate Governance, the Bank continues to refer to the SCA Code as well as international best practices, with regard to Directors’ independence.

  Accordingly, the Bank considers the independence of its directors by reference to the SCA Code and international best practices. For these purposes, the Bank has determined that Board members employed by the Government of Abu Dhabi’s Department of Finance or Abu Dhabi Investment Authority are sufficiently removed from the Bank and its major shareholder, Abu Dhabi Investment Council, to enable classification as independent.

  The Board Nomination, Compensation & HR Committee is responsible to ensure that independent directors remain independent on a continuous basis.

• Induction and professional development

  Tailored induction programmes are arranged for all newly appointed Directors. The programme comprises a comprehensive Directors’ induction pack, meetings with other Directors and senior management, as well as comprehensive guidance on the duties and responsibilities of Directors, the Bank’s policies and procedures and relevant legal and regulatory requirements.

  The Bank provides Directors with opportunities to update and develop their skills and knowledge through external seminars, regular presentations from senior management, and relevant reading materials. In addition, the Board Secretariat works with various external providers to source suitable tailored training sessions.

• Matters reserved to the Board

  The following matters are reserved to the Bank’s Board in accordance with best practices:

  • Strategy and management – setting the Bank’s long-term objectives and commercial strategy, and monitoring management’s performance;
  • Structure and capital – approving changes relating to capital structure, corporate structure and management and control structures;
  • Financial reporting, planning and controls – approving interim and final results, annual report and accounts, dividends, business plans, budgets (including funding plans) and forecasts, significant changes in accounting policies or practices, remuneration of and appointment or removal of auditors and other material accounting policies;
  • Internal controls – setting and monitoring internal controls;
  • Risk – setting the Bank’s risk strategies and appetite and monitoring the Bank’s approach to material risks;
  • Major transactions – approving major capital investments and projects, by reason of materiality or size, including acquisitions, mergers, disposals, and material contracts not in the ordinary course of business;
  • Board and other appointments – appointment or removal of directors, the CEO, the Board Secretary and other key senior management, succession planning, terms of reference and membership of Board Committees, annual performance review of directors and Board Committees;
  • CEO – annual evaluation and supervision of the CEO;
  • Remuneration – determining policy for remuneration of directors and senior executives, creation and approval of share incentive plans and other remuneration schemes;
  • Delegation of authority – monitoring matters delegated to Board Committees, Management Committees and management.

   

• Information Dissemination

  The Board Secretariat delivers Board papers to the Board by means of a secure dedicated iPad application. The Board iPad application is also used to provide Directors with access to other relevant information, and induction documentation. In keeping with the Bank’s principles of transparency, Directors may use the iPad application to view and access all documents presented to the Bank’s management committees, as well as minutes of meetings of those committees.

  Board papers are delivered at least 3 business days before each Board meeting. The Board Secretariat actively engages with the Chairman, Committee Chairman and management to ensure that agendas are appropriate and meetings are effective.

• Board Committees

  The Board has established four Board Committees to assist the Board in carrying out its functions.

  The roles and delegated authorities of these Committees are set out in their terms of reference, copies of which are available on the website under “Board & Management”. The terms of reference are reviewed and updated regularly.

  The members and chairman of each of the Board’s Committees are reviewed on a regular basis to ensure suitability and compliance with other requirements, and rotated as needed. In particular, the Bank adheres to the local and international best practices of corporate governance regarding inclusion of independent Directors as chairman and members of the Audit & Compliance Committee and the Nomination, Compensation & HR Committee.

  1.The Audit & Compliance Committeeclick here

  2.The Corporate Governance Committeeclick here

  3.The Nomination, Compensation & HR Committeeclick here

  4.The Risk & Credit Committeeclick here

• Performance evaluations

  The Board conducts a formal and rigorous evaluation of its performance annually, with a view to constructively identifying areas of success and achievement, as well as areas which may require improvement. For details of the process click here to see the Process for Performance Evaluation of the Board, Board Committees and individual Directors.

  In keeping with international best practice recommendations, an external facilitator is engaged at least once every 3 years to provide greater objectivity; the process is otherwise performed internally, led by the Chairman, and falls under the responsibility of the Nomination, Compensation & HR Committee.

  The most relevant comments from the evaluation are presented to the Board, in the form of an action list, and its implementation is monitored by the Board’s Corporate Governance Committee.

• Related-party transactions

  Details of all transactions where a Director and/or other related parties might have potential interests are provided to the Board for its review and approval. Where a Director is interested, the interested Director neither participates in the discussions nor votes on such matters.

  The Bank’s policy is to, so far as possible, only engage in transactions with related parties (including Directors) on arm’s length terms.

• Conflicts of interest

  The Board maintains awareness of the other commitments of its Directors and senior management. ADCB has implemented a Directors’ conflicts of interest policy click here to view the Bank’s conflict of interest policy.