The Board is responsible for the overall stewardship of the Bank and thus plays a key role in ensuring that the appropriate level of corporate governance is maintained.

The powers of Directors are set out in the Bank’s Constitution and in the Terms of Reference for the Board first adopted in August 2007 and revised in June 2013. The Board is aware of its responsibilities to ensure that the Bank adheres to all relevant legislations such as the Banking Act 2004, the Financial Reporting Act 2004, the Financial Services Act 2007 and the Mauritius Companies Act 2001. The Board reassesses its Terms of Reference as and when required.

The Board also follows the principle of good corporate governance as recommended in the National Code of Corporate Governance 2016 and the BOM Guidelines on Corporate Governance 2001 (revised October 2017). It reviews and approves on a regular basis the Bank’s Code of Ethics to ensure that they are in line with the Bank’s objectives. It also regularly monitors and evaluates the Bank’s compliance with its Code of Ethics.

Some of the key functions of the Board include:

• Determining the Bank’s purpose, strategy and values;
• Providing guidance, maintaining effective controls over the Bank and monitoring management in carrying out Board’s plans and strategies;
• Monitoring and evaluating the implementation of the Bank’s strategies, policies and management of its performance criteria and business plans;
• Exercising leadership, enterprise, intellectual honesty, integrity, objectivity and judgement in directing the Bank so as to achieve sustainable prosperity;
• Ensuring that procedures and practices are in place to safeguard the Bank’s assets and reputation and providing guarantee on the effectiveness of the Bank’s internal control system;
• Monitoring and evaluating regularly compliance with the Code of Ethics;
• Approving and monitoring the Bank’s risk management policies including the setting of limits by assessing its risk appetite, skills available for managing risk and its risk bearing capacity;
• Ensuring that succession is professionally planned in a timely manner;
• Monitoring the Bank’s financial health and performance against budgets, including ensuring that the balance between “conformance” and “performance” is healthy. Conformance is linked to the Bank’s compliance with various laws, regulations and codes governing it while performance relates to the development of a commensurate enterprise culture that will ensure maximisation of shareholders’ returns are not detrimental to other stakeholders’ interests; and
• Reviewing and approving senior management’s compensation package. 

The Terms of Reference is available for consultation on the Bank’s website.

As per the Mauritius Companies Act 2001, the Terms of Reference and the Bank’s Constitution, decisions requiring prior approval of the Board are set out below: 

• Issue of other shares
• Consideration for issue of shares
• Shares not paid for in cash
• Authorisation of distribution
• Shares issued in lieu of dividend
• Shareholder discount
• Purchase of own shares
• Redemption at option of Bank
• Restrictions on giving financial assistance
• Change of Registered Office
• Approval of amalgamation proposal
• Short form amalgamation and 
• Transfer of shares

The Constitution of AfrAsia Bank Limited provides for a Board comprising a minimum of 5 Directors and a maximum of 14 Directors. As at 30 June 2019, the Bank had a unitary Board of ten experienced, well-known and high calibre members from both local and international frontiers. Of the ten Directors, there is one Executive Director and nine Non-Executive Directors. In line with the “BOM Guidelines on Corporate Governance 2001” issued by the Bank of Mauritius, AfrAsia Bank Limited satisfies the minimum percentage of non-independent Directors as depicted on page 37. The Board is of the belief that based on the size of the Bank and its relative shareholding structure, there is a suitable representation in terms of the balance of executive, non-executive and independent non-executive directors and the skills, knowledge and experience of its directors who, collectively provide the core abilities for the leadership of the company.

As per the Code of Corporate Governance, all boards should have a strong executive management presence with at least two Executives as members. The Board is of the view that the spirit of the Code is met through the attendance and/or participation of the CEO as Executive Director and the Senior Management in relevant Committees and Board deliberations as and when required.

The Board acknowledges the requirement for gender representation on its quest for an optimal board diversity, but has not yet found a suitable candidate to fill the role. However, it remains committed to maintain a suitably required diversity of its Board members.

During the financial year, the Board bid farewell to 6 members and welcomed 5 new members. A complete information pack was submitted to all newly appointed Directors and they were given various opportunities to discuss with the CEO and senior officers to better comprehend the business and its affairs.

Board Representation as at 30 June 2019 was as follows: 

Directors’ country of residence as at 30 June 2019 was as follows: 

Directors’ length of tenure as at 30 June 2019 was as follows:

Directors’ mix of skills and experience as at 30 June 2019 was as follows:

AfrAsia’s Board Committees are set up to enable the Board to discharge its roles and responsibilities through delegated authority and ingrained reporting instruments necessary for managing, directing and supervising the management of the business and affairs of the Bank.

The Bank has in place five comprehensively structured Board Committees for more in-depth analysis and review of various issues as may be appropriate. After each meeting, a report is made by each Board Committee and presented to the Board after each meeting. Each committee operates under its own approved Terms of Reference which are subject to reassessment as and when required.

The Bank’s Board Structure as at 30 June 2019 is as follows:

The Committee consists of three independent Directors. During the year under review, the Committee met at least once every quarter in line with its approved Terms of Reference and consistent with good governance practices. 

The core objectives of the Corporate Governance Committee include amongst others: 

• To deal with all corporate governance issues and make recommendations to the Board accordingly;
• To determine, agree and develop the Bank’s general policy on corporate governance in accordance with the recommendations of the Code of Corporate Governance issued by the Bank of Mauritius and ensure compliance with same;
• To prepare the corporate governance report to be published in the annual report;
• To ensure that disclosures are made in the annual financial statements in compliance with the disclosure provisions in accordance with the best international practice;
• To ensure effective communication between stakeholders;
• To act as the Nomination and Remuneration Committees by selecting potential candidates for recommendation to the Board and approving the nomination and remuneration of the Directors and Senior Management;
• To review and advise on the general remuneration policy of the Bank;
• To oversee compensation, human resources and corporate social responsibility issues and related budgets;
• To oversee information governance and make recommendations to the Board;
• To determine any criteria necessary to measure the performance of Executive Directors in discharging their functions and responsibilities;
• To review the Board structure, size and composition and make recommendations to the Board with regards to any adjustments that are deemed necessary;
• To liaise with the Board in relation to the preparation of the Committee's report to Shareholders, as required;
• To ensure a review, at least annually, of the current Directors’ performance and attendance at Board and Committee meetings;
• To request an annual headcount and budget plan and allow management to execute and report thereon at regular intervals; and
• To ensure that the board members receive thorough orientation on board governance and key strategic issues facing the financial institution

The Credit Committee performs several fundamental functions which include:

• Reviewing recommendations from Management Credit Committee (MCC) to grant a credit facility when exceeding delegated limits to the MCC;
• Monitoring of large credits, impaired credits and the overall level of provisioning; and
• Reviewing of restructured facilities which shall be approved by the sanctioning authority (one level higher) than the initial power.

The fundamental functions falling under the onus of the Risk Management Committee include:

• Reviewing and having an oversight on all the principal risks to which the Bank is exposed which include but are not limited to credit, market, liquidity, operational, legal, compliance and reputational risks and the actions taken to mitigate such risks;
• Ensuring that the Bank maintains a satisfactory liquidity and solvency ratio at all times;
• Formulating and make recommendations to the Board in respect of risk management issues including limits setting and risk appetite;
• Receiving periodic information on risk exposures and risk management activities from senior officers;
• Ensuring that the CEO facilitates training programmes for Directors and senior management to enable them to have a robust understanding of the nature of the business and that of the risks, the consequences of the risks being inadequately managed and the techniques for managing the risks effectively; 
• Reviewing and approve discussions and disclosure of risks;
• Providing prior endorsement for appointment and removal of the Chief Risk Officer;
• Reviewing the policies and procedures periodically to ensure their continuing adequacy and enforcement
  
  The new Terms of Reference for Risk Management Committee are to be reviewed by the Board.

The Conduct Review Committee performs several fundamental functions which include:

• Having the mandate to require management to establish policies and procedures to comply with the requirements of the Guidelines on Related Party Transactions; 
• Reviewing and approve credit exposures to related parties;
• Ensuring market terms and conditions are applied to all related party transactions;
• Reviewing the practices of the financial institution to ensure that any transaction with related parties that may have a material effect on the stability and solvency of the Bank is identified and dealt with in a timely manner; and
• Reporting periodically and in any case not less frequently than on a quarterly basis to the Board on matters reviewed by it, including exception on policies, processes and limits.

During the year under review, the Board held six meetings. The recurrence of Board meetings’ main underlying is a timely pinpointing of key issues. The Board manages a designed schedule for the meetings with enough leeway for any additional issues arising to be included in the agenda as and when required. Decisions were also taken by way of resolutions in writing, assented and signed by all the Directors. The overall agenda setting process can be illustrated as follows: 

The attendance report of the Directors at Board and Committee meetings for the year ended 30 June 2019, as well as their individual director’s remunerations and benefits paid, are shown below: 

*During the year under review, the Risk Management Committee and Conduct Review Committee separated their fundamental functions to stand as two different committees managed by different members.

**The remunerations and benefits are paid directly to IBL Ltd.

The Company Secretary provides assistance and guidance to the Board of Directors in a number of key areas, for instance, corporate law, governance and corporate secretarial practice. The Company Secretary also helps the directors to fulfil their duties while acting with the utmost integrity and independence in the best interest of the Bank.

It has also a key role to play in the application of corporate governance within the Bank.

The main duties of the Company Secretary include the following:

• Supporting the Chairman in ensuring the board functions efficiently and effectively; 
• Ensuring good information flows within the board and its committees;
• Ensure that all statutory filings are done in a timely manner and that the Bank is in good standing;
• Keep the statutory registers and make sure that they are updated;
• Arrange and attend meetings of shareholders, Directors and Committees and provide accurate minutes of the proceedings thereat;
• Managing the convening and the conduct of the Annual Meeting and/or Special Meeting, in line with statutory and regulatory requirements and the Code, and providing accurate minutes of the proceedings thereat; 
• Safekeeping of the minutes books and of the legal/statutory documents pertaining to the Bank;
• Ensuring that the Bank complies with its Constitution and all applicable legal and regulatory requirements, including relevant codes, guidelines, procedures and rules established by the Board;
• Supporting the process for the board to undertake formal annual evaluation of its own performance and that of its committees and individual directors.

The Bank tendered its secretarial services during the year under review, IBL Management Ltd responded with the prerequisites of the tender and was chosen as company secretary. The Bank has outsourced its secretarial functions to IBL Management Ltd through its representatives, Doris Dardanne, FCIS and Melanie Kye Thiam, FCIS.

Doris Dardanne is a Chartered Secretary and Fellow Member of the Institute of Chartered Secretaries and Administrators (UK). Doris has been working in the company secretariat field for nearly 33 years and is presently the Group Corporate Secretary of IBL Ltd, the largest Mauritian company listed on the Stock Exchange of Mauritius with activities in 9 different clusters and in 22 countries. As such, she has a wide exposure and a good knowledge of the different business sectors. Prior IBL Ltd, for 30 years, Doris has been working in and driving the Company Secretariat Team of Ireland Blyth Limited, which was a major conglomerate in Mauritius listed on the Stock Exchange of Mauritius. The latter amalgamated with its holding company, GML Investissement Ltée, to become IBL Ltd on 1st July 2016.

Melanie Kye Thiam holds a BA (Hons) in Law and Management and is a Chartered Secretary and Fellow Member of the Institute of Chartered Secretaries and Administrators (UK). Melanie is presently working as Company Secretary at IBL Ltd and has been providing company secretarial services to various companies within IBL Group operating in various sectors, for instance, financial services, logistics, aviation, retail and commerce. Prior to the amalgamation of Ireland Blyth Limited and GML Investissement Ltée, Melanie has been working in the Company Secretarial Department of Ireland Blyth Limited for 3 years. She also worked in the Global Business Sector for nearly 5 years.