- Revised charters, constitutions or memorandum and articles of association, shareholders’ agreements, management agreements and governance policies have been rolled out to subsidiaries.
- Appointment of additional independent non-executive directors to subsidiary boards is underway.
- A Group Management Committee member sits on each subsidiary board.
ROLES OF THE BOARD
- The Board is the ultimate decision- making body of the
- The Board is responsible for establishing sound system of internal control for the Company.
- The Board is responsible for overseeing the corporate governance
- The Board is responsible for: adoption of strategic plans and policies; monitoring the operational performance; establishing policies and processes that ensure integrity of the Company’s internal controls; and risk
- The Board is responsible for establishing clear roles and responsibilities in discharging its fiduciary and leadership functions.
- The Board is responsible for ensuring that management actively cultivates a culture of ethical conduct and sets the values to which the institution will
- The Board is responsible for ensuring that the strategies adopted promote the sustainability of the company.
- The Board is responsible for establishing policies and procedures for effective operations of the The Board shall establish appropriate staffing and remuneration policies for all employees as required.
- The Board shall ensure the Company’s compliance with all applicable laws, regulations, governance codes, guidelines and regulations and establish systems to effectively monitor and control compliance across the Company.
MATTERS RESERVED FOR THE BOARD
- The Board reserves specific powers to itself and delegates other matters to the management of the
- The Board delegates its day to day powers and duties to the Chief Executive Officer and to the Executive Committee which in turn will make further delegations in accordance with the organisation’s structure and as required by
BOARD STRUCTURE
- Board of Directors
- Chairman
- Independent Directors
- Non Executive Directors
The same standard of care in relation to the director’s duties to the Company shall be required for both executive and non‐executive directors provided that additional liability and benefit may arise under the master and servant law in the case of an executive director if there is an express or implied contract to that effect.
ROLES OF INDIVIDUAL DIRECTOR
- Every director of a company shall exercise the powers and discharge the duties of his office honestly, in good faith and in the best interests of the company, and shall exercise that degree of care, diligence and skill which a reasonably prudent director would exercise in comparable circumstances.
- Failure to take reasonable care in accordance with the provisions of section 282 of CAMA, shall be a ground for an action for negligence and breach of duty.
- Each director shall be individually responsible for the actions of the Board in which he participated, and the absence from the Board’s deliberations, unless justified, shall not relieve a director of such responsibility.
- A director shall not in the course of management of affairs of the company or in the utilisation of the company’s property, make any secret profit or achieve other unnecessary benefits.
- A director shall be accountable to the company for any secret profit made by him or any unnecessary benefit derived by him contrary to the provisions of subsection of this section.
- Where a director discloses his interests before the transaction and before the secret profits are made before the general meeting, which may or may not authorise any resulting profits, he may escape liability, but he shall not escape liability if he discloses only after he has made the secret profits, and in this case, he shall account for the profits.
- The inability or unwillingness of the company to perform any functions or duties under its articles and memorandum shall not constitute a defence to any breach of duty of a director under this Act.
- The duty not to misuse corporate information shall not cease by a director or an officer having resigned from the company, and he shall still be accountable and can be restrained by an injunction from misusing the information received by virtue of his previous position.
ROLE OF THE CHAIRMAN
The Board shall elect a chair who shall be an independent director. The CEO shall keep the Chair informed about the business of the Company.
The Role of the Chair shall be to:
- Provide leadership to the Board and ensure its effectiveness in all aspects of its role. The Chair shall set the Board agenda with the assistance of the Chief Executive Officer and Company
- Facilitate the effective contribution of non-executive directors and encourage constructive relationship between executive and non-executive directors.
- Monitor attendance at Board meetings
- Ensure that there is a robust process for Board succession and that a current pool of candidates has been identified
- Ensure that the Board develop the strategy for the Company and monitor the CEO to ensure compliance. Ensure that the Board is fully appraised and has the opportunity to debate the strategic direction of the Company
- Put in place and maintain an effective delegation of authority structure to provide effective management and control over the Company’s business with the assistance of the CEO
- Communicate effectively with the Company’s stakeholders. The stakeholders include, where applicable, shareholders, regulators, governments, customers, staff and the communities within which the Company operates
- Together with the CEO, to ensure that the Company communicates effectively with shareholders, stakeholders, governments, rating agencies, financial institutions, the media, the public and any relevant special interest groups who have a legitimate concern or involvement with the business of the Company
- Ensure that the views of the shareholders are communicated to the Board as a whole
- Chair the Annual General Meeting and all other shareholder meetings of the Company
- Together with the CEO and Company Secretary, ensure that the Company operates to the highest standards of corporate
- Manage the training needs of each board member and ensure development
- Ensure the Board undertakes continuous development in order to enhance governance practices within the Board itself and in the interest of the Company.
ROLE OF THE CEO/MANAGING DIECTOR
The role of the Chief Executive Officer/Managing Director shall be to:
- Responsible for the day to day running of the Company
- Ensure that the policies spelt out by the Board in the Company’s overall corporate strategy are implemented
- Acts as the Company’s leading representative in its dealings with Stakeholders.
- Acts as the head of management team and is answerable to the Board.
- Establish a culture of integrity and legal compliance which should be assimilated by personnel at all levels of the company.
- The Board may delegate such of its powers to the Managing Director as it may deem appropriate or necessary to ensure smooth operation of the company.
- Identify and recommend to the board competent officers to manage the operations of the institution. In the fulfilment of this duty, the CEO should ensure that the institution’s human resources policy is adhered
- Co-ordinate the operations of the various departments within the institution. Establish and maintain efficient and adequate internal control systems.
- Design and implement the necessary management information systems in order to facilitate efficient and effective communication within the institution.
THE ROLE OF THE COMPANY SECRETARY
The Board shall appoint a Company Secretary to assist and advice the Board and all Board Members. The Company Secretary is the Secretary of the Board and is charge with the following responsibilities:
- Provide guidance to the Board on its duties and responsibilities and on other matters of governance
- Ensure that the Board complies with its obligations under the law and the Company articles of association
- Assist the Chairperson of the Board in organizing the Boards activities
- Assist the Board with evaluation exercise
- Coordinate the governance audit process
- Maintain and update the register of conflict of interest
- Facilitate effective communication between the organization and the shareholders; and
- Carry out any other duties as may be assigned by the Board from time to
DELEGATION OF AUTHORITY
- Effective governance of the Company requires management to be involved in all significant decisions, and to be accountable to the Board. All delegated authorities must emanate from the
- In establishing delegated authorities, whether for risk/business approval, financial expenditure approval, or other approvals, the Company mirrors standard Group delegations of authority, in respect of both quantum and individuals to be granted authority.
- The CEO must notify the Board of any matter of significance affecting the Company which requires the Board’s attention, including any matters which exceed the delegated authority of the executive
COMPOSITION OF THE BOARD
- The Board shall be optimally constituted giving consideration to the size and nature of the Company’s business and its subsidiaries.
- The Board shall ensure that it comprises a diverse mix of skills and expertise critical for effective oversight on the management of the company. This shall be underscored by ensuring that each member has the requisite skill and access to the necessary tools required for their effective
APPOINTMENT AND REMUNERATION OF BOARD MEMBERS
- The Board shall consist of both Non-Executive Directors and Executive Directors as shall be determined from time to time and subject to regulatory requirements. The Board shall recommend Directors for appointment by the shareholders at the Annual General Meetings (AGMs). Independent Non-Executive Directors (INEDs) shall be appointed as per regulatory
- The Chairman of the Board shall be appointed by the Board and must be a non- executive
- The number of Board members shall be as determined by the Company’s Articles of association and local regulatory
- All directors must disclose outside directorships and inform the Company Secretary of any changes to such directorships as soon as the changes take
- Executive directors intending to accept a board position outside of the Group
for personal interests must receive prior clearance from the relevant Governance Head. Such appointments should be limited to one, subject to regulatory requirements and there must be no conflict of interest.
- The Board shall establish and approve formal and transparent remuneration policies and procedures for Board members. Executive directors will not be paid any directors’ fees in addition to their regular remuneration. INED fees will be reviewed at least every two years.
- Directors’ remuneration package shall be adequately disclosed in the director’s remuneration report and shall retroactively be approved by shareholders in an Annual General
BOARD INDEPENDENCE
To enhance independence, the Board shall avail an environment that ensures the members are critical and independent of one another so as to promote independent and objective judgement.
There shall be an annual review to evaluate the company’s succession planning needs with regard to Independent Non-executive Directors. Prior to appointment, Independent Non- Executive Directors shall be required to satisfy the following criteria:
- Have no conflicts of interest
- Have appropriate professional skills, training and background
- Bring influence and stature in the local market, including government, regulators and the business community
- Add to Board diversity but also fit with the existing board (directors from different sectors, industries including financial sector etc)
- Have no political appointments
- Be financially stable
- Be able to devote sufficient time to the role and be willing to attend the scheduled board meetings in person and only join by phone or video conference, if absence would otherwise be unavoidable
- Be independent as defined by local regulations
- Satisfy the requirements under the applicable local regulation
- Must not have served for more than nine years since they were first elected as an INED
ACCESS TO INFORMATION AND INDEPENDENT ADVICE
- The Board may from time to time require independent legal, financial, governance or other expert advice. To facilitate this, the Board shall ensure members obtain external advice, as may be required, at the company’s expense and shall invite senior management to provide technical advice as
- The Board shall establish procedures to allow its members access to relevant, accurate and complete information and professional advice in order to discharge its duties
BOARD TRAINING
- Each Board member shall participate in an induction program that is tailored to effectively orient the member to the Company’s business, strategy, objectives, policies, procedures, operations, senior management and the business environment. The induction shall also include all the necessary information that shall be required by a member for effective performance on the Board. New Board members shall also be introduced to their fiduciary duties and responsibilities as well as any other aspects that are unique to the
- Board members should have a clear understanding of their role in corporate governance and be able to exercise sound and objective judgment about the affairs of the
- The Board shall ensure adequate Board development through continuous training to keep the Board well informed on critical information pertinent to the business and corporate governance
- The Board shall conduct an annual review to identify the training needs for each member on a regular basis and facilitate up skilling as well as continuous
BOARD EVALUATION
For improved Board effectiveness, the Board shall carry out an assessment of its performance. An independent consultant shall provide the Board with an annual assessment of the Board’ s performance. This assessment is discussed with the full Board.
The purpose of the assessment is to determine:
- Whether the Board and its committees are functioning effectively and consistently with the Corporate Governance Guidelines.
- Whether the size of the Board is appropriate, and whether the composition of the Board is most effective for its purposes.
- The training needs for Directors
- Whether evaluation of the Board, the chairperson, the Chief Executive Officer and company secretary has been adequately undertaken.
DUTIES OF BOARD MEMBERS
Each Board member shall have the fiduciary duty to:
- Exercise a reasonable degree of care, skill and diligence
- Act in good faith and in the best interests of the company and not for any other purpose;
- Act honestly at all times and must not place themselves in a situation where personal interests conflict with those of the company
- Exercise independent judgement at all times
- Devote sufficient time to carry out their responsibilities and enhance their skills
- Promote and protect the image of the company
- Owe their duty to the company and not to the nominating authority
- Owe the company a duty to hold in confidence all information available to them by virtue of their position as a Board member
BOARD COMMITTEES
The Board may discharge any of its responsibilities through Board Committees appointed from amongst its members subject to the applicable laws. The Board has established the following committees:
- Nomination and Remuneration Committee
- Audit and Corporate Governance Committee
- Investment and Strategy Committee
The Board shall appoint the Chairpersons of the Committees and shall approve appropriate terms of reference for the
Reporting obligations:
- The Committees shall report to the Board on matters referred to it by the Board and on the proceedings following each meeting of the committee. The report shall include findings, matters identified for specific recommendation to the Board, action points and any other issues as deemed
- The committees shall liaise with each other in so far as it is expedient to effectively perform their different
- The Board remains collectively responsible for the decisions of any committee and shall review the effectiveness and performance of committees
- The Board may be required to establish other committees from time to
CONFLICTS OF INTEREST AND RELATED PARTY TRANSACTIONS
All directors are required to:
- Declare any interests that may give rise to potential or perceived conflict e.g. multiple directorships, business relationships or other circumstances that could interfere with exercise of objective judgment
- Declare as soon as they become aware that a subject to be discussed at a Board or committee meeting may give rise to a conflict of interest at the outset of the applicable meeting. The conflicted director shall not participate further in the discussion of that subject, nor vote on it. This is subject at all times to the provisions of the local regulations, Articles of Association or other regulatory documents of the
- The Board shall evaluate all potential or perceived conflict of interest as declared and shall approve such transactions with the company as may be
- A register of declared Conflicts of Interest shall be maintained by the Company Secretary.
CODE OF CONDUCT
- The Board shall adopt a Code of Conduct for all directors and employees that addresses, among other things, conflict of interest and which shall be reviewed and updated regularly. A summary of this code shall be made available on the company’s website.
- The Company shall adopt effective whistle blowing mechanisms that encourage staff and other stakeholders to bring out information helpful in enforcing good corporate governance
- The Board shall also adopt the Securities and Exchange Commission Code of Conduct that will apply to all directors and
RELATIONS WITH SHAREHOLDERS
- The Board shall recognize, respect and protect the rights of shareholders and shall ensure equitable treatment of all shareholders in the same class of issued shares whether minority, institutional or foreign
- The Board shall provide shareholders with information as is required under the applicable law and shall establish mechanisms to ensure effective communication with shareholders.
RELATIONS WITH STAKEHOLDERS
- The Board shall have a stakeholder-inclusive approach and will be responsible for giving due consideration to the legitimate interests and expectations of the Company’s stakeholders in its deliberations, decisions and
- The Board shall establish effective communication with the Company’s stakeholders including the media as may be
TENURE AND RE-ELECTION OF DIRECTORS
Subject to satisfactory performance and the provisions of Companies and Allied Matters Act, directors shall offer themselves for re-election at regular intervals of at least once every three years.
It is necessary to reinforce the board by continually injecting new energy, fresh ideas and perspectives. The board shall ensure the periodic appointment of new directors to replace existing non -existing directors.
Non – Executive Directors
- Non-executive directors shall serve for a defined period on the board.
- The tenure of non-executive directors shall not exceed three terms of four years each.
Executive Directors
- The tenure of the Managing Director/Chief Executive Officer shall not exceed two terms of five years each.
- The tenure of executive directors other than the Managing Director/Chief Executive Officer shall not exceed three terms of four years each.
- Where an executive director is subsequently appointed as the Managing Director/Chief Executive Officer of the company, his tenure of office in that new capacity stars from the date he assumed the new position and he is entitled to two terms of five years each PROVIDED that no person shall serve as an executive director of a company for a combined period of more than 15 years in total.
BOARD MEETINGS
- The directors may meet for the dispatch of business, adjourn and otherwise
- regulate their meeting as they think fit provided that the first meeting of the directors
- shall be held not later than 6 months after the incorporation of the company.
- Any question arising at any meeting shall be decided by a majority of votes, and in
- case of an equality of votes, the chairman shall have a second or casting vote.
SCHEDULING AND PREPARATION OF AGENDA FOR BOARD MEETINGS
- A director may, and the secretary on the requisition of a director shall, at any time
- summon a meeting of the directors.
- Board meetings are scheduled in advance, on average of four times every year.
- Typically, the meetings are held at the Company’s headquarters, but occasionally a meeting may be held at another Company facility or an off-site location.
- The Company Secretary in conjunction with the Board Chairman and MD prepares the agenda for each Board.
- Each agenda shall include the Board receiving a detailed overview of the performance and significant issues confronting the company and reporting of the activities of the board committees during the quarter.
- Directors are free to raise at any Board meeting subjects that are not on the agenda for that meeting.
QUORUM AT MEETINGS
- Unless the articles otherwise provide, the quorum necessary for the transaction of the business of directors shall be 2 where there are not more than 6 directors, but where there are more than 6 directors, the quorum shall be one third of the number of directors, and where the number of directors is not a multiple of three, then the quorum shall be one-third to the nearest number.
- Where a committee of directors is appointed by the board of directors, the board shall fix its quorum, but where no quorum is fixed, the whole committee shall meet and act by a majority.
- Where the board is unable to act because a quorum cannot be formed, the general meeting may act in place of the board and where a, committee is unable to act because a quorum cannot be formed, the board may act in place of the committee.
ATTENDANCE AT BOARD MEETINGS
- Directors are expected to attend Board and Committee meetings regularly and punctually.
- The chairman may request the replacement of a director if he or she has attended less than 75% of the Board and Committee meetings held during any two consecutive years of a three-year term.
MINUTES
- The Company Secretary shall make a concise written record of the decisions and proceedings of all Board meetings. To ensure accuracy, Minutes should be written and circulated to Directors within a specified time after the meeting.
- Minutes must be included in the papers for the next meeting of the Board, together with a schedule of matters outstanding. The Company Secretary shall follow up on action plans decided at the meeting and present a status of implementation of the action plans during the next meeting.
- Minutes of a meeting are reviewed, corrected and adopted at the subsequent meeting. Thereafter, the corrected minutes are signed by the Company Secretary and the Chairman before entering same in the Minutes book.
TRANSACTION WITH DIRECTORS/AFFILIATES
Except for employment and consulting arrangements with the CEO and any other Executive Directors and for direct compensation below their annual emoluments, the Company does not engage in transactions with directors or their affiliates.
Any transaction capable of casting into doubt the independence of a non-executive director, present the appearance of a conflict of interest, or is otherwise prohibited by law, rule or regulation. This includes, directly or indirectly, any extension, maintenance or renewal of an extension of credit to any director or member of management of the Company. This prohibition also includes significant business dealings with directors, a significant business relationship between the Company and an entity with which a director is affiliated, significant charitable contributions to organizations with which a director is affiliated, and consulting contracts with, or other indirect forms of compensation to, a non-executive director, any of which would be in excess of the total amounts payable to him as provided above. Any waiver of this policy may be made only by the Board and must be promptly disclosed to the Company’s shareholders.
NOMINATION AND REMUNERATION COMMITTEE
NOMINATION ISSUES
The Committee is a committee of the Board and is accountable to the Board for its performance. Its primary purpose is to support and advise the Board in fulfilling its responsibilities to shareholders in ensuring that the Board is comprised of individuals who are best able to discharge the responsibilities of directors having regard to the law and the highest standards of governance by:
- Assessing the skills and competencies desired and required on the Board;
- From time to time assessing the extent to which the required skills are represented on the Board and set a transparent process to review whether those requirements are being met;
- Considering and recommending to the Board nomination, selection and induction of non- executive directors;
- Considering and recommending to the Board succession plans for non-executive directors;
- Establishing and monitoring strategies on gender diversity for the Cititrust Group as they relate to the Board and its Committees;
- Establishing and disclosing a skills matrix for the Board, setting out the mix of skills and diversity that the Board has or is looking to achieve;
- Establishing processes for the review of the performance of individual directors and the Board as a whole;
- Establishing processes for the identification of suitable candidates for appointment to the Board;
- Recommending the appointment and removal of directors; and
- Other relevant matters identified from time to time by the
NOMINATION CHECKS
- The Committee shall undertake appropriate checks before appointing a person, or putting forward a candidate to shareholders for election, as a director, or recommending a person to be appointed as a member of the Cititrust Holdings Management Personnel. These checks should include checks as to a person’s character, experience, education, criminal record and bankruptcy history,
- When putting forward a candidate for election to shareholders, the Committee must provide all material information in its possession relevant to the decision on whether or not to elect or re-elect a
REMUNERATION ISSUES
The role of the Committee is to review and make recommendations to the Board in respect of:
- An executive remuneration and incentive policy;
- The remuneration of the Managing Director (MD) and any other executive director, the company secretary, Chief Financial Officer (CFO), all senior executives reporting directly to the CEO and al staff;
- An executive incentive plan;
- An equity based incentive plan;
- The remuneration of non-executive directors;
- Superannuation arrangements;
- Succession of Key Management Personnel and key staff succession plans;
- Recruitment, retention and termination strategies;
- Remuneration by gender, including representation of women at all levels of the organisation;
- Recruitment, retention, performance measurement and termination policies and procedures for non-executive directors, the MD and any other executive director, the company secretary, the CFO and all senior executives reporting directly to the CEO;
- The disclosure of remuneration in the Citadel Group’s public materials including ASX filings and the annual report; and
- Other relevant matters identified from time to time by the
COMPOSITION
The Committee will consist of at least three members, including an independent director and it will be chaired by an independent director.
- Appointment, removal or resignation
The Committee members are appointed, removed and/or replaced by the Board. The Board will appoint the members of the Committee with due regard to the provisions of the Corporations Act 2001 (Cth). Appointments are for 12 months terms or as otherwise determined by the Board. Members of the Committee may withdraw from the Committee by notifying the Board in writing. If a member of the Committee retires, is removed or resigns from the Board, that member ceases to be a member of the Committee. The Board will appoint the successor.
- Skills matrix
Before recommending the re-appointment of an existing director or the appointment of a new director, the Committee shall review that director’s skill, experience and background within the context of the matrix of the desired skills, experience and diversity of the Cititrust Group.
- Committee may invite
The Committee may invite any member of the Key Management Personnel or any other individual to attend a meeting of the Committee, as they consider appropriate. The CEO will be the principal liaison between Key Management Personnel and the Committee on remuneration matters and will be invited to attend meetings when the Committee considers appropriate.
- Secretary and Chairman
The company secretary will be the secretary of the committee. The Chairman of the Committee must be an independent director, and must not be the Chairman of the Board. If the Chairman is unable to attend a Committee meeting, the Committee members present at the meeting must appoint a Committee member to chair the meeting.
MEETINGS
- Frequency
The Committee will meet as frequently as required but not less than four times a year.
- Calling meeting and notice
Any Committee members or the secretary may call a meeting of the Committee.
A notice of each meeting confirming the date, time, venue and agenda will be
forwarded to each member of the Committee at least seven days prior to the date
of the meeting. The notice for members will include relevant supporting papers for the
agenda items to be discussed.
- Report to the Board
The chairman of the Committee, or delegate, will report to the Board following each meeting.
- Minutes
Formal minutes of each Committee meeting will be taken by the company secretary.
The minutes of the Committee will be entered into the Committee’s minute book and the
Committee’s minute book may be inspected by any director, provided no conflict of interest exits.
- Quorum and voting
A quorum consists of the lesser of two Committee members or a majority of Committee members. In the absence of the Committee chairman or appointed delegate, the members will elect one of their number as chairman for that meeting.
Each member will have one vote and the chairman of the Committee will not have a second or casting vote. Decisions are by majority vote. The Chairman does not have a casting vote where there is a tied vote. If a tied vote occurs, the motion will lapse. No Committee member can vote on any matter relating to their position on the Committee, the Board, or any Board Committee.
REVIEW
The Board will conduct an annual review of the Charter to ensure that the Charter continues to reflect the current processes and guidance utilised when assessing the nomination of directors to the Board. The Board will need to approve any amendments to the Charter that stem from the review
EVALUATION PROCESS
- the Board;
- Board committees;
- individual Directors; and
- Key Management
The objective of this process is to add value to the contribution made by each director, member of Key Management Personnel and the Board, rather than to merely implement a checklist approach.
NOMINATION DUTIES AND RESPONSIBILITIES
THE COMMITTEE
The duties and responsibilities or the Committee are set out in this section and the Board may, from time to time, delegate other responsibilities and functions to the Committee. The Committee is responsible for (among other things) ensuring that the Board selection processes effectively implement the requirements of the Board Charter.
SIZE AND COMPOSITION OF THE BOARD
The Committee must consider and make recommendations to the Board about the size and composition of the Board to ensure that:
- The Board’s size and composition is conducive to making decisions that are appropriate for the Citirust Group, including ensuring that the Board:
- is large enough to incorporate a variety of perspectives and skills.
- incorporates an appropriate range of skills and expertise.
- represents the best interest of the Cititrust Group as a whole rather than of individual shareholders or interest groups.
- is not so large that effective decision making is hindered.
- So far as appropriate for the Cititrust Group in the context of the criteria above, a majority of the Board comprises of non-executive directors who:
- are not members of the management of the Cititrust Group; and
- are free of any business or other relationship that could materially interfere with, or could reasonably be perceived to interfere with, the independent exercise of their judgement.
CURRENT BOARD
- Skill requirements
The Committee will periodically assess the skills required to discharge the Board’s duties, having regard to the strategic direction of the Cititrust Group, and report the outcome of that assessment to the Board.
The Committee will, as and when it considers appropriate, but in any event whenever an existing non-executive director retires, assess the skills represented on the Board by the non-executive directors and determine whether those skills meet the required skills as identified.
- Skill review
The composition of the Board is to be reviewed periodically by the Committee to ensure that it has the appropriate mix of expertise and experience.
- Skill enhancement
The Committee will make recommendations to the Chairman of the Board on means by which skill levels of existing non-executive directors can be enhanced.
NEW CANDIDATES
- Candidate identification
Having regard to the skills required and the skills represented, the Committee will implement a process for the identification of suitable candidates for appointment to the Board of non- executive directors.
In determining the process for the identification of suitable candidates, the Committee will ordinarily ensure that a search is undertaken by an appropriately qualified independent third party acting on a brief prepared by the Committee which identifies the skills sought.
The Committee will make recommendations to the Board on candidates it considers appropriate for appointment.
- Re-nomination of retiring non-executive directors
Non-executive Directors will usually be appointed for a five year term, with the possibility of re-appointment by the Board. The Committee will inform the Board of the names of non- executive directors who are retiring in accordance with the provisions of the Company’s Articles and will make recommendations to the Board as to whether the Board should support the re- nomination of that retiring director.
In order to make these recommendations; the Committee will review the retiring non- executive director’s performance during the period in which the non-executive director has been a member of the Board. The Committee will conduct that review by whatever means it considers appropriate.
A member of the Committee will not participate in the review of his or her own performance
APPOINTMENT OF DIRECTORS
Once the Board, after reviewing the recommendations provided by the Committee, has decided to appoint a new candidate as non-executive director, the Cititrust Group will provide the letter of appointment and relevant documents to the new non-executive director.
APPOINTMENT OF KEY MANAGEMENT PERSONNEL
Notwithstanding whether or not the Board or existing members of the Cititrust Group’s Key Management Personnel have requested the Committee to be involved in the appointment process of a new member of Key Management Personnel, the Committee shall ensure that, at the time of appointment, all members of Key Management Personnel execute a written agreement setting out the key terms of their appointment.
INDEPENDENCE OF DIRECTORS
The Committee must regularly assess and determine the independent status of each director by taking into account interests disclosed by each director and other information and whether the director:
- is employed, or has previously been employed in an executive capacity by the Cititrust Group or its subsidiaries, and there has not been a period of at least three years between ceasing such employment and serving on the Board;
- has within the last three years been a principal of a material professional adviser or a material consultant to the Cititrust Group or its subsidiaries, or an employee materially associated with the services provided;
- is a material supplier or customer of the Cititrust Group or its subsidiaries, or an officer or otherwise associated directly or indirectly with a material supplier or customer;
- is a substantial shareholder of the Cititrust Group (being a shareholder who has a relevant interest in more than 5% of the shares in the Group) or an officer of, or otherwise associated directly with, a substantial shareholder of the Cititrust Group; or
- has a material contractual relationship with the Cittrust Group or its subsidiaries other than as a director;
- has close family ties with any person who fall within any of the categories described above; or has been a director of the entity for such period that his or her independence may have been compromised.
DIRECTOR COMPETENCIES
The Committee must implement a plan for identifying, assessing and enhancing director competencies to ensure that the Board comprises directors who possess an appropriate range of skills and expertise.
The Committee must develop and implement continuing education procedures to ensure that directors have continuing education to update and enhance their skills and knowledge, including education concerning key developments in the Cititrust Group and the industry and environment within which it operates.
COMMITMENT OF THE BOARD
The Committee must regularly review the time required by a director to effectively undertake his or her Board responsibilities (and Board committee responsibilities, where relevant) and determine whether each director is meeting that requirement after identifying and considering details of that director’s other commitments.
SELECTION AND APPOINTMENT OF DIRECTORS
The Committee must develop and implement processes to identify suitable candidates for nomination or appointment to the Board, including engaging external consultants or specialists to provide advice or services.
When considering candidates for nomination, appointment or re-appointment to the Board, the Committee must take into account:
- the candidate’s competence and qualifications.
- the range of skills, experience and expertise on the Board to identify the skills that will best increase the effectiveness of the Board.
- the duration of each director’s tenure to ensure effective succession planning.
- the existing structure and com position of the Board in light of the criteria outlined in this charter.
- any candidate’s ability to devote the time required by a director to effectively undertake his or her Board responsibilities (and Board committee responsibilities, where relevant) after identifying and considering details of the candidate’s other commitments.
- the extent to which the appointee is likely to work constructively with the existing directors and contribute to the overall effectiveness of the
- In addition to the above, for non-executive directors who have served in that role for a long period of time (generally taken to be nine years or more), take into account (prior to those non-executive directors being submitted for re-election) whether such non-executive directors.
- continue to make a significant contribution to the Cititrust Group.
- have not formed associations with management (or others) that might compromise their ability to discharge their duties as non-executive directors in the best interests of the Cititrust Group.
These considerations need to be assessed in the context of ensuring that the Board continues to have fresh ideas and viewpoints available to it.
Prior to appointment or being submitted for re-election, non-executive directors should specifically acknowledge that they have sufficient time to meet what is required of them by the Cititrust Group.
INDUCTION PROCEDURE
There are many issues, procedures and policies that a new non-executive director of the Cititrust Group will need to be aware of and understand. Therefore, it is important for the Group to have an induction procedure.
SUCCESSION PLANNING
The Committee must develop, implement and review the Cititrust Group’s succession plans in place for membership of the Board to ensure that these plans work to maintain:
- an appropriate balance of skills, experiences and expertise on the Board.
- an appropriate structure and composition of the Board
DUTIES AND RESPONSIBILITIES – REMUNERATION
REMUNERATION ISSUES
In order to fulfil its responsibilities to the Board, the Committee will:
- Remuneration policy
- Review and make recommendations to the Board regarding an executive remuneration policy that:
- balances the Cititrust Group’s desire to attract and retain executives against its interest in not paying excessive remuneration.
- motivates executives to pursue long term growth and success of the Cititrust Group.
- demonstrates a clear relationship between performance and remuneration.
- does not create incentives for Key Management Personnel to pursue greater profitability by relaxing risk controls.
- Review and make recommendations to the Board regarding the Cittrust Group’s policy for determining executive remuneration; and
- Consider whether to seek shareholder approval of the executive remuneration policy.
- Review and make recommendations to the Board regarding an executive remuneration policy that:
- Executive directors and senior management
- Consider and make recommendations to the Board whether remuneration packages for the company secretary, MD, senior executives reporting directly to the CEO include an appropriate balance of fixed and performance-based remuneration.
- Consider and make recommendations to the Board on the entire specific remuneration for the CEO and any other executive director, (including base pay, incentive payments, equity awards, retirement rights, service contracts) having regard to the executive remuneration policy, and determine whether any shareholder approvals are required and that any equity-based executive remuneration is made in accordance with shareholder approvals.
- Review and make recommendations to the Board regarding the proposed remuneration (including incentive awards, equity awards and service contracts) for the company secretary and all senior executives reporting directly to the CEO
- Executive incentive plans
- Review and make recommendations to the Board regarding the design of all executive incentive plans; and
- Review and make recommendations to the Board regarding the total proposed payments from each executive incentive.
- Equity based plans.
- Review and make recommendations to the Board regarding the design of all equity based plans.
- Keep all plans under review in the light of legislative, regulatory and market developments.
- For each equity based plan, determine each year whether awards will be made under that plan.
- Review and make recommendations to the Board regarding total proposed awards under each plan.
- In addition to considering awards to the company secretary or any senior executives reporting directly to the CEO, review and make recommendations to the Board regarding proposed awards under each plan on an individual basis for executives as required under the rules governing each plan or as determined by the Committee.
- Review, make recommendations to the Board and keep under review performance hurdles for each equity based plan, ensuring that non-executive directors do not receive options with performance hurdles or performance rights as part of their remuneration.
NON-EXECUTIVE DIRECTOR REMUNERATION
- Review and establish the level of remuneration for non-executive directors. The level of director remuneration is to be set so as to attract the best candidates for the Board while maintaining a level commensurate with boards of similar size and type;
- In order to align a director and shareholders’ interests but still retain director independence, each director’s remuneration package shall contain a cash, superannuation and equity component;
- Ensure that the levels of fixed remuneration for non-executive directors reflect the time commitment and responsibilities;
- Ensure that non-executive directors do not receive performance-based remuneration;
- Where necessary recommend that the Board seek an increase in the amount of remuneration for non-executive directors approved by shareholders;
- The Committee may request management or external consultants to provide necessary information upon which the Board may make its determination;
- Review the on-going appropriateness and relevance of the remuneration policy for non- executive
TERMINATION PAYMENTS
- The Committee will review termination payments, if any, for Key Management Personnel to ensure that they are compliant with the requirements of the company’s policy.
- The Committee will ensure that any termination payments are fair to the individual, and to the Cititrust Group, and that failure and misconduct is not rewarded and the duty to mitigate loss is fully
APPROVALS
Before implementing any of the following proposals the Board will ask the Committee to review the proposal and make a recommendation to the Board in relation to it:
- any change to the remuneration or contract terms of the CEO and any other executive director, the company secretary, the MD, the CFO and all senior executives reporting directly to the CEO.
- the design of any new equity plan or executive cash-based incentive plan, or the amendment of any existing equity plan or executive cash-based incentive plan.
- the total level of award proposed from equity plans or executive cash-base incentive plans.
- any termination payment to the CEO, any other executive director, the company secretary or any senior executives reporting directly to the CEO. A termination payment to any other departing executive must be reported to the Committee at its next meeting
REPORTING AND DISCLOSURE
ANNUAL REPORTING
The Committee must annually:
- review and assist the preparation of the Board composition and structure disclosures made in the corporate governance section of the Cititrust’s annual report for consistency with the Corporate Governance Principles.
- review the remuneration report and make recommendations to the Board in relation to the remuneration report included in the Cititrust Group’s annual report.
- review the remuneration policy disclosures made in the corporate governance section of the annual report for consistency with the remuneration policy of the Group.
DISCLOSURE
In order to maintain transparency, the role of the Committee and both the levels and process of setting the remuneration for directors, the CEO, the chief financial officer, the MD, and others are to be fully and fairly reported. Consistent with the disclosure policy the Committee will review all public disclosures and statements concerning matters the subject of this policy, including disclosures in:
- CAC and other regulators filings;
- the annual report; and
- press
The Committee must ensure that any notice of meeting containing a resolution for the election of a director is appropriately framed and includes information that investors might reasonably need in order to make an informed decision about the relevant candidates.
REPORTING TO THE BOARD
The Committee must regularly update the Board about its activities and ensure that the Board is aware of any matter relating to the Committee, which may significantly impact the financial condition or other affairs of the Cititrust Group. The Committee will do this by:
- providing a report of the Committee’s activities for inclusion in the Board papers for the next Board meeting following a Committee meeting (this report must include copies of the relevant Committee meeting agenda, papers and minutes).
- if requested, the chairman providing an oral report about any material matters arising out of a Committee meetings.
- at relevant Board meetings, providing the information that has been requested by a director.
DISCLOSURE
The Committee must disclose:
- the members of the committee.
- as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings
REVIEW
The Board will conduct an annual review of the Charter to ensure that the Charter continues to reflect the current processes and guidance utilised when assessing the nomination of directors to the Board. The Board will need to approve any amendments to the Charter that stem from the review.
DUTIES AND RESPONSIBILITIES
The Committee shall have a written mandate and terms of reference and the Committee will perform the following responsibilities as it relates to:
Internal Audit
- Monitor the internal audit function of the Company including its independence;
- Review proposed audit plan(s) and review the results of internal audits completed since the previous Committee meeting as well as the focus of upcoming internal audit projects.
- Ensure that internal audit reports are submitted to appropriate Regulators quarterly and at such other times as may from time to time be required by the Regulator.
- Oversee the development of a procedure for the receipt, retention and treatment of complaints received by the Company, regarding accounting, internal accounting controls, unethical activity/breach of the corporate governance code or audit matters, including a means for the Company’s stakeholders (employees, customers, suppliers, applicants, etc.) to submit such complaints in a confidential and anonymous manner;
- Investigate any matter brought to its attention within the scope of its duties with the authority to retain counsel or other advisors, if in its judgment that is appropriate, at the expense of the Company;
- Submit meeting minutes and, as appropriate, report the matters discussed at each Committee meeting with the Board of Directors;
- Annually review and reassess its responsibilities, functions, pre-approval policy for audit and non-audit services, and Charter, making changes as necessary, and conduct an annual performance evaluation of its activities;
- Ensure that the Company provides adequate funding, as determined by the Committee, to the Committee for payment, compensation to any advisers engaged by the Committee, and payment of ordinary administrative expenses incurred by the Committee in carrying out its duties; and
- Review the proposed audit plan(s) and review the results of internal audits completed since the previous Committee meeting as well as the focus of upcoming internal audit projects.
- Ensure that internal audit reports are submitted to regulatory bodies quarterly and at such other times as may from time to time be required by the Regulator.
Statutory Audit and Financial Reporting
- The Committee shall be responsible for the review of the integrity of the data and information provided in the Audit and / or Financial Reports.
- The Committee shall provide oversight functions with regard to both the company’s financial statements and its internal control and risk management functions.
- Review the results of the annual audit and discuss the annual financial statements with Management;
- The Committee shall review the terms of engagement and recommend the appointment or reappointment and compensation of External Auditors to the Board.
- Review the statutory Auditors’ management letter when presented and ensure adequacy of Management’s response.
- Review and approve the quarterly Management Accounts ahead of their submission to the regulators;
- Review and discuss the half yearly unaudited statements with Management;
- Review with the Chief Financial Officer annually the significant financial reporting issues and practices of the Company, and ensure that appropriate accounting principles are applied including financial controls relating to the “closing of the books” process;
- Meet separately, and at least quarterly, with the Chief Financial Officer and the Internal Auditor to discuss the adequacy and effectiveness of accounting and financial controls of the Company;
- Discuss the Company’s Policy regarding press releases as well as financial information provided to analysts and rating agencies;
- Review the Company’s legal representation letter presented to the statutory Auditors and discuss significant items, if any, with the Company Secretary;
- Receive the decisions of the Shareholders Audit Committee on the statutory audit report from the Company Secretary and ensure its full implementation;
- Require Management to present and discuss, as soon as practicable, all reports received from regulators (e.g. CBN, SEC, NSE, NFIU and Rating Agencies etc.) which may have a material effect on the financial statements or related Company compliance policies;
- Annually assess and confirm the independence of the statutory Auditor, in line with the Company’s Statutory Audit Independence Policy (see Appendix A). The report of this assessment should be submitted to the Board;
- Develop, annually review and ensure compliance with the list of non-audit services that may be provided by the statutory auditors (see Appendix B; and.
- Review with the Company Secretary legal and regulatory matters, contingent liabilities or other sensitive information that may have a material effect on the Company’s financial statements, systems of internal control or regulatory compliance.
- Review the procedure put in place to encourage honest whistle blowing
- The Audit Committee shall meet at least three times in a year and at least once with the External Auditors
- The Committee’s performance shall be evaluated periodically.
Corporate Governance
Corporate governance is “the system by which companies are directed and controlled” (Cadbury Committee, 1992). It involves a set of relationships between a company’s management, board, shareholders and other stakeholders. Corporate Governance deals with the prevention or mitigation of conflict of interests of stakeholders. On the whole, Corporate Governance is generally understood to encompass authority, accountability, stewardship, leadership, direction and control. Thus, the Committee shall be responsible for:
- The establishment and implementation of the principles of Corporate Governance
- Monitoring the effectiveness of the governance practices under which it operates and make changes as may be necessary.
- Ensuring that the Board Policies relevant to the effective and efficient governance of the Company are implemented and reviewed on an annual basis.
- Review and make recommendations to the Board for the approval of the Company’s organizational structure and any proposed amendments.
- Oversee the Human resource department of the Company and ensure strict adherence to the organization’s Code of Ethics and corporate culture.
- Periodically evaluate the skills, knowledge and experience required of members of the Board and Board Committees and ensure that the Board and its Committees have the required blend and diversity of skills to effectively carry out its responsibilities.
- Oversee an annual evaluation of the Board and its Committees by independent external consultants to determine their effectiveness.
AUTHORITY
The Committee has the authority of the Board to:
- Investigate any activity within its terms of reference;
- Seek any information that it requires from any employee of the Company and all employees shall cooperate with any request made by the Committee;
- Obtain outside legal or independent professional advice, at the Company’s expense, and secure the services of Consultants with relevant experience and expertise if it is considered necessary; and
- Form and delegate authority to Sub-Committees, comprised of one or more members of the Committee, as necessary or appropriate. The Sub-Committee will have the full power and authority of the Committee.
- The Company shall take a Third Party Liability Insurance Policy for all the Directors to mitigate their risk exposure.
MEETINGS
The Committee shall comprise of at least four Non–Executive Directors nominated by the Board of Directors. The Board shall consider the independence, financial literacy, accounting or related financial management expertise, entrepreneurial skills, exposure/experience in corporate governance principles, ethical standards and other qualifications before nominating and appointing the members of the Committee.
The Committee must have one member who is a financial expert. A financial expert is someone who:
- As a result of acting as an auditor or due to other relevant experience has appropriate knowledge of both International Standards on Auditing, financial reporting procedures and internal controls along with audit Committee functions; and
- Is a member of a reputable and relevant professional institution.
The appointment and removal of Committee members shall be the responsibility of the Board.
Attending each meeting by standing invitation is the Chief Financial Officer, Internal Auditor and the Company Secretary, as the Chief Custodian of Corporate Governance principles while the Managing Director, and or Executive Directors shall attend based on specific invitation. The Chairperson of the Committee shall be entitled to request that the Committee meet without any of these persons.
SECRETARY
The Company Secretary shall act as the secretary to the Committee.
CHAIRPERSON'S ELIGIBILITY AND TERMS OF APPOINTMENT
The Chairperson of the Committee shall be appointed from the Non-Executive members, for a period of two years. The Chairperson shall be a person other than the Chairpersons of the Board of Directors and the Board Investment Committee.
Where the Chairperson is absent from a meeting, the members of the Committee present at the meeting shall have authority to choose one of the non-executive directors to be Chairperson for that particular meeting.
ABILITY TO TAKE EXTERNAL ADVICE
The Committee has the power to obtain advice and assistance from, and to retain at the Company’s expense, such independent or outside legal counsel, accounting or other advisors and experts as it determines necessary or appropriate to carry out its duties. The Committee shall have the sole authority to retain, replace and approve fees and other retention terms for any consultant or advisors that it requires to assist it in fulfilling its duties.
OTHER ISSUES
The Board may rely on information provided by the Committee and its members in relation to matters within the Committee’s responsibility under the terms of this Charter provided that it has evaluated the information and is not aware of any reasonable basis upon which to question its accuracy.
Management is responsible for the preparation, presentation and integrity of the financial statements. Management is responsible for implementing and maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Internal audit is responsible for independent reviews of the integrity of financial data.
The Company’s Executive Management is responsible for making recommendations to the Audit and Governance Committee regarding the appointment or termination of the Internal Auditor. This Committee and the Nomination & Remuneration Committee shall review such recommendation and advise the Board appropriately. The Board has the ultimate responsibility to select, evaluate and where appropriate replace the Internal Auditor.
The statutory Auditors are responsible for planning and carrying out each audit and review, in accordance with applicable auditing and review standards. The statutory Auditors are accountable to shareholders through the Shareholders Audit Committee
RENUMERATION OF MEMBERS OF THE COMMITTEE
The members of the Committee shall be entitled to sitting allowance, reimbursable travel and hotel expenses and other fees as approved by the Board.
FREQUENCY OF MEETINGS
The Committee shall meet at least once every quarter, or upon request of the Chairman of the Committee or any two members of the Committee
NOTICE OF MEETINGS
The Secretary shall provide notice of meetings, but lack of notice shall not invalidate the proceeding of any meeting at which a quorum was present.
QUORUM AT MEETINGS
Two members of the Committee shall constitute a quorum.
RECORD KEEPING AT MEETINGS
The Secretary shall keep minutes of the Committee meetings. The minutes of the Committee meetings shall be presented for approval at the next meeting of the Committee.
APPOINTMENT OF SUB-COMMITTEES
The Committee may appoint its own Sub-Committees and delegate any of its responsibilities that do not require involvement of the Committee as a whole, to a Sub-Committee. The Sub-Committee may comprise of one or more members of the Committee. Each Sub-Committee shall report its activities at the next practicable meeting of the Committee
REPORTING AND ACCOUNTABILITY
The Committee shall report the proceedings and recommendations of each meeting to the Board at the next practicable meeting of the Board. The Board shall evaluate the performance of the Committee as part of the annual Board evaluation exercise.