Corporate Governance stands for responsible and transparent management and corporate control oriented towards a sustainable increase in value. We at Guaranty Trust Bank (Kenya) Limited (“the Bank”) believe that good corporate governance is an essential foundation for sustainable corporate success and enhances the confidence placed in the Bank by our shareholders, business partners, employees and the financial markets in which we operate. All these, we have enshrined in the Bank’s “Orange rules” which are Simplicity, Professionalism, Service, Friendliness, Excellence, Trustworthiness, Social Responsibility and Innovation which signify the principal ideologies upon which the Bank was established and remain the foundation upon which we have built and developed our exemplary corporate governance practices. The Orange rules are fundamental to our culture and are part of the everyday conduct of the Bank’s business.
The Bank has a Code of Corporate Governance which provides a robust framework for the governance of the Board and the Bank. The Bank’s Code of Corporate Governance is continuously reviewed to align with additional legal and regulatory requirements and global best practices, in order to remain a pace setter in the area of good corporate governance practices. In addition to the Code, the Bank aggressively promotes its core values to employees of the Bank through its Code of Professional Conduct; its Ethics Policy as well as Communications Policy, which regulate employee relations with internal and external parties. This is an indicator of the Bank’s determination to ensure that its employees remain professional at all times in their business practices. The Bank also has an entrenched culture of openness in which healthy discourse is encouraged and employees are mandated to report improper activities in the Bank.
The Bank complies with the requirements of the Central Bank of Kenya (“CBK”) in respect of the defined corporate governance practices and submits reports on the Bank’s compliance status to CBK. The Bank also conducts an Annual Board and Directors’ Review/Appraisal covering all aspects of the Boards’ structure, composition, responsibilities, processes and relationships, in compliance with the requirements of the CBK Prudential Guidelines.
The Bank has an entrenched culture of openness in which healthy discourse is encouraged and employees are mandated to report improper activities. The Bank continues to serve customers, clients and communities; and create returns for stakeholders. The belief that success is only worth celebrating when achieved the right way through a process supported and sustained with the right values remains one of the Bank’s guiding principles. Our commitment to this principle is for us the key to keeping public trust and confidence in our Bank and the key to our continued long-term success.
The Board of Directors is responsible for the governance of the Bank and is accountable to shareholders for creating and delivering sustainable value through the management of the Bank’s business.
Having the right people with an appropriate balance of skills, knowledge and experience is an important aspect of corporate governance in order to continue to have an effective Board and an executive management team to steer the affairs of the Bank in an ever challenging environment. The Bank’s rigorous and robust appointment and effective succession planning framework is one way of ensuring that we continue to have the right people to drive the business in the desired direction.
The Board of Directors of the Bank is made up of seasoned professionals who have excelled in various sectors. They possess the requisite integrity, skills and experience to bring to bear independent judgment on the deliberations of the Board and decisions of the Board. The Directors have a good understanding of the Bank’s businesses and affairs to enable them properly evaluate information and responses provided by Management, and to provide objective challenge to Management. Directors challenge each other’s assumptions, beliefs or viewpoints as necessary for the good of the Bank and question intelligently, debate constructively and make decisions dispassionately.
The Board has ultimate responsibility for determining the strategic objectives and policies of the Bank to deliver long-term value by providing overall strategic direction within a framework of rewards, incentives and controls.
The Board has delegated the responsibility for day-to-day operations of the Bank to Management and ensures that Management strikes an appropriate balance between promoting long-term growth and delivering short-term objectives. In fulfilling its primary responsibility, the Board is aware of the importance of achieving a balance between conformance to governance principles and economic performance.
The Board plays a central role in conjunction with Management in ensuring that the Bank is financially strong, well governed and risks are identified and well mitigated. The synergy between the Board and Management further fosters interactive dialogue in setting broad policy guidelines in the management and direction of the Bank to enhance optimal performance and ensure that associated risks are properly managed.
The Board meets quarterly and additional meetings are convened as required. Material decisions may be taken between meetings by way of written resolutions, as provided for in the Articles of Association of the Bank. The Directors are provided with comprehensive group information relating to the subsidiaries at each of the quarterly Board meetings and are also briefed on business developments between Board meetings.
The Board exercises its oversight responsibilities through four (4) Committees, namely Board Risk Management Committee, Board Credit Committee, Board Human Resources, Nominations and Compensation Committee and the Board Audit Committee. These are the Committees which form the bedrock for the long-term professional management of the business of the Bank. Through these Committees, interactive dialogue is employed to set broad policy guidelines, and to ensure the proper management and direction of the Bank on a regular basis.
The Board of Directors of the Bank currently consists of five (5) Directors.
This Committee is tasked with the responsibility of setting and reviewing the Bank’s risk policies. The coverage of supervision includes the following: Credit Risk, Reputational Risk, Operations Risk, Technology Risk, Market and Rate Risks, Liquidity Risk and other pervasive risks as may be posed by the events in the industry at any point in time.
The Terms of Reference of the Board Risk Management Committee include the following:
The Committee meets quarterly and additional meetings are convened as required. Membership of the Committee is currently made up of four (4) members comprising: three (3) Non-Executive Directors and one (1) Executive Director.
The Board Credit Committee is responsible for approval of credit facilities in the Bank. The Terms of Reference of this Committee include but are not limited to the following:
All credits considered as “Large Exposures” as defined by the Board of Directors from time to time are considered and approved by the Board Credit Committee.
In view of the volume of transactions that require Board Credit Committee approvals, there are instances where the need arises for credits to be approved by members expeditiously between Board Credit Committee Meetings. Such urgent credits are circulated amongst the members for consideration and approval in line with a defined procedure that ensures that all members of the Committee are furnished with full information on such credits.
The Board Credit Committee meets at least once in each quarter. Additional meetings are however, convened as required.
Membership of the Committee is currently made up of four (4) members comprising: three (3) Non-Executive Directors and one (1) Executive Directors.
The Board Human Resources, Nomination and Compensation Committee is primarily responsible for identifying nominating and recommending suitable candidates to fill board vacancies and exercises overall oversight of human resource affairs in the Bank. The Terms of Reference of this Committee include but are not limited to the following:
• Identifying, Nominating and recommending for approval to the Board of Directors suitable candidates to fill Board vacancies as and when they arise through properly established criteria.
• Undertaking regular review of the composition, size and the structure of the Board and give recommendations on any adjustments as and when required.
• Reviewing and approving the Bank’s policies relating to staff compensation, benefits and rewards.
• Reviewing and approving the Banks’s organizational structure and ensure the structure facilitates effective decision making and good governance.
• Ensuring that the Bank has in place a proper succession planning system.
• Ensuring that the Bank has sound policies and procedures on the appointment of senior managerial staff that clearly defines the duties, and the required qualifications and levels of experience for the roles.
Membership of the Committee is currently made up of three (3) members comprising: two (2) Independent Non-Executive Directors and one (1) Non-Executive Directors.
The Board Audit Committee is responsible for oversight of audit functions. The Board Audit Committee is also responsible for overseeing the Bank’s financial reporting and internal control systems and ensuring that the Bank has in place appropriate checks and balances.
The Terms of Reference of the Board Audit Committee include but is not limited to the following:
The Board Human Resources Nomination and Compensation Committee is primarily responsible for identifying nominating and recommending suitable candidates to fill board vacancies and exercises overall oversight of human resource affairs in the Bank.
Membership of the Committee is currently made up of three (3) members comprising: two (2) Independent Non-Executive Directors and one (1) Non-Executive Directors.
These are Committees comprising Senior Management staff of the Bank. The Committees are risk driven as they are basically set up to identify, analyse, synthesize and make recommendations on risks arising from day to day activities of the Bank. They also ensure that risk limits as contained in the Board and Regulatory policies are complied with at all times. They provide inputs for the respective Board Committees and also ensure that recommendations of the Board Committees are effectively and efficiently implemented.
The standing Management Committees in the Bank are:
This Committee is responsible for regular analysis and consideration of risks in the Bank. The Committee meets from time to time and at least quarterly. However, additional meetings may be held if required. The Committee reviews and analyses risks and issues impacting either directly or remotely on the Bank, brainstorms on such issues and recommends steps to be taken by the Bank. The Committee’s approach is risk based.
The Committee provides inputs for the Board Risk Management Committee and also ensures that the decisions and policies emanating from the Committee’s meetings are implemented.
The mandate of the Committee includes:
This Committee is responsible for ensuring that the Bank complies fully with the Credit Policy Guide as approved by the Board of Directors. The Committee also provides inputs for the Board Credit Committee. This Committee reviews and approves credit facilities to individual obligors not exceeding an aggregate sum to be determined by the Board from time to time.
The Management Credit Committee is responsible for reviewing and approving all credits that are above the approval limit of the Managing Director as determined by the Board. The Committee reviews the entire credit portfolio of the Bank and conducts periodic assessment of the quality of risk assets in the Bank. It also ensures that adequate monitoring of credits is carried out. The Committee meets weekly depending on the number of credit applications to be considered.
This Committee is responsible for the assessment of the Risk Asset portfolio of the Bank. It highlights the status of the Bank’s assets in line with the Internal and External regulatory framework, and directs appropriate actions in respect of delinquent assets. The Committee ensures that adequate provisions are taken in line with the regulatory guidelines.
This Committee is responsible for the management of a variety of risks arising from the Bank’s business including, Market and Liquidity Risk Management, Loan to Deposit Ratio analysis, Cost of Funds analysis, establishing guidelines for pricing on deposit and credit facilities, Exchange Rate risk analysis, Balance Sheet structuring, regulatory considerations and monitoring of the status of implemented assets and liability strategies.
The Committee is responsible for assisting Management with the implementation of IT strategy approved by the Board. The roles and responsibilities of the Committee include: