^{Corporate Governance} Board of Directors

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 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.

Click here for Terms of Reference for the Board of Directors.

To read relevant policies please see below:

• Directors’ access to independent professional advice policy (PDF)
• Directors' Code of Conduct (PDF)

The Bank's Board Secretariat and Corporate Secretariat function acts as an interface between the Board and management. As well as acting as administrator for the Board's activities, the Board Secretariat works closely with both the Board of Directors and the management to facilitate communication and transparency. The Board Secretariat assists the management by helping them to understand the requirements and directions of the Board and proactively facilitates the governance of the Bank. To facilitate this role, the Board Secretariat has full visibility of all management committees and activities. The function is both administrative and strategic.

To read relevant policy please see below:

Group Corporate Governance Framework (PDF)

The Board Secretariat delivers Board papers to the Board by means of a secure 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 5 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.

The Board of Directors are responsible for determining the Bank's strategic direction. The Board of Directors and the management team regularly discuss and refine the Bank's strategy and objectives. In order to deliver against these objectives, management regurlarly develops and renews detailed strategic plans that operate across the Bank's businesses. The Board of Directors set the strategic direction of the Bank (with due consideration given to risk tolerance, shareholder expectations, business development opportunities and other macroeconomic factors), which senior management then uses to design the Bank's strategic plan and prepare the annual budget for Board approval. Thereafter, senior management provides regular updates to the Board of Directors to monitor progress against budget and strategy and permit any necessary modifications or adjustments in strategic direction.

The Bank's Board of Directors comprises 11 Directors - majority of which are independent, non-executive Directors elected or appointed by the Bank's shareholders. 

The Board considers that there is an appropriate balance of knowledge, skills and experience 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 GCEO 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 GCEO. 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; and
• To develop a constructive relationship with the GCEO and to manage his performance.

The day to day management of the Bank has been delegated by the Board to the GCEO and the senior management team. The GCEO 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.

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 the 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 & Governance 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.

To read relevant policies please see below:

• Procedures for selection and appointment of the Bank’s Directors
• Procedures for selection and appointment of the Bank’s Directors – Flowchart (PDF)

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; this includes potential conflicts with the interests of the Bank's controlling shareholder and its related parties.

The Bank complies with the independence requirements of the Central Bank’s Corporate Governance Regulation and Standards for Banks (Circular No.89/2019 dated 18th July, 2019) and the Securities & Commodities Authority (SCA) Chairman’s Resolution No.3/TM of 2020 Regarding the Approval of the Public Join-Stock Companies Governance Guide.

In line with the above, the Bank has determined that, (a) Board members employed by Abu Dhabi Investment Council, the Government of Abu Dhabi's Department of Finance or Abu Dhabi Investment Authority should be classified as independent directors, (b) the Bank's Board contains a majority of independent directors, and (c) each of the Bank's Board committees contains a majority of independent directors. The Board’s Nomination, Compensation, HR & Governance Committee is responsible to ensure that independent directors remain independent on a continuous basis.

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.

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 the GCEO, the Board Secretary and other senior management, succession planning, terms of reference and membership of Board Committees, annual performance review of directors and Board Committees;
• GCEO - annual evaluation and supervision of the GCEO;
• Remuneration - determining policy for remuneration of directors and senior executives, creation and approval of share incentive plans and other remuneration schemes; and
• Delegation of authority - monitoring matters delegated to Board Committees, Management Committees and management.

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. 

A performance evaluation of the Board, Board Committees and individual Directors is conducted on an annual basis. In addition, an external consultant will be appointed to independently evaluate the performance of the Board, Board Committees and individual Directors at least once every three (3) years.

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 Nomination, Compensation, HR & Governance Committee.

To read relevant policy please see below:

• Board performance evaluation policy (PDF)

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.

To read relevant policy please see below

• Related Party Transactions Policy (PDF)

Details of all transactions in which 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, engage in transactions with related parties (including Directors) only on arm's-length terms.

The Board Secretariat maintains a conflicts register that is regularly reviewed by the Nomination, Compensation, HR & Governance Committee.

The Board maintains awareness of the other commitments of its Directors and senior management. ADCB has implemented a Directors' conflicts of interest policy. As a result of regular written declarations submitted by each of the Board Members, the Board maintains satisfaction that the other commitments of the Directors do not conflict with their duties, or that, where conflicts may arise, the Board is sufficiently aware and appropriate policies are in place to minimise the risks.

To read relevant policy please see below:

• Directors' conflicts of interest policy (PDF)

Responsibility for setting our risk appetite and for the effective management of risk rests with the Board of Directors. Acting within authority delegated by the Board, the Board Risk Committee (BRC) has overall responsibility for oversight and review of all risk types - credit, market, operational, liquidity, fraud, reputational, etc.

The BRC also guides management on risk appetite across sectors, geographies and customer types. It periodically reviews and monitors compliance with the Group's overall risk appetite and makes recommendations thereon to the Board.

Its responsibilities also include reviewing the appropriateness and effectiveness of the Group's risk management systems and controls, reviewing the outcome of stress tests and the Bank's stress-testing methodology, overseeing the Management Risk Committees and ensuring that the Bank's risk governance is supportive of prudent risk-taking at all levels in the Bank.

It is the responsibility of Bank’s Board of Directors to:

• Ensure that effective measures are in place to safeguard the Bank’s assets;
• Ensure proper accounting records and reliable financial information by procedures designed to avoid or reduce risks and ensure compliance with applicable laws and regulations;
• Ensure that an adequate and effective system of internal controls and procedures is established and maintained; and
• Evaluate the effectiveness of the Bank’s internal control system, identifying control objectives, reviewing significant control policies and establishing relevant control procedures.

Control activities are closely monitored across the Bank by the Bank’s internal audit function, working independently of management. In addition, the risk management and compliance functions monitor control activities on an ongoing basis. All three functions cover all banking activities in general and key risk areas in particular. The Board's Audit Committee reviews audit reports periodically and particularly where significant violations to the applicable regulations, prescribed policies and procedures have occurred. The Board's Audit Committee ensures the implementation of regulations, policies and procedures through all Bank departments aimed at mitigating identified risks and safeguarding the interests of the Bank and its shareholders.

While the Board's Audit Committee oversees and reviews the Bank’s compliance policies and their implementation, the Group Compliance department is responsible for monitoring compliance with local regulatory requirements. Compliance with anti-money laundering procedures and internal training in such procedures is also developed and administered by the Group Compliance department.

The Bank’s internal controls over financial reporting comprise processes designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles. The Bank’s internal controls over financial reporting include policies and procedures that (i) are designed to ensure maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Bank; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles, and that receipts and expenditures of the Bank are being made only in accordance with authorizations of management and directors of the Bank; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Bank’s assets that could have a material effect on the financial statements. Internal controls are designed to ensure that adequate independent internal checks and balances exist in keeping with the maker-checker or four-eye principle and that the oversight roles are embedded in areas reporting independently to non-originating areas.

The Bank’s internal control system has been designed to provide reasonable assurance to the Bank’s Board of Directors and shareholders. All internal control systems, no matter how well designed, have inherent limitations and they may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

However, improvement of control activities is an ongoing process at ADCB that includes identification, evaluation and management of significant risks faced by the Bank.

Audit Arrangements

Internal Audits

Regulation and Supervision

Remuneration Policy

Director's Interest in Bank Shares

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