^{Sustainability} Governance

The Board is supported by four standing committees: Board Risk Committee (BRC), Board Executive Committee (BEC), Board Audit & Compliance Committee (BAC), and Board Nomination, Compensation, Human Resources & Governance Committee (NCHRG). Together the board and its committees provide oversight and direction related to financial performance, corporate strategy, governance, risk management, business and sustainability strategy, succession planning and human resource management.

Independence is an important factor in the Directors’ ability to serve in the best interest of ADCB and all its stakeholders. According to the Central Bank of the UAE’s Corporate Governance regulation and standards, all board members are considered independent, with the exception of Khalid Deemas Alsuwaidi due to his tenor of over 12 years as a director.

For more detail on corporate governance, compliance and our code of conduct, please read our latest our Corporate Governance report.

Directors’ remuneration is set annually by the Board following delegation from ADCB’s shareholders. Any proposals for changes are considered by the Nominations, Compensation, Human Resources & Governance (NCHRG) Committee before obtaining necessary Board and/or shareholders approvals. According to applicable laws and ADCB’s articles of association, Directors may not receive any remuneration in years when ADCB does not achieve net profits, unless approved by the shareholders. Disclosure of the Board’s remuneration can be found in the ADCB Corporate Governance Report 2022.

Our Director Selection Policy reflects the fit and proper criteria for the selection, appointment and re-election of Directors, in accordance with applicable regulations. Any candidate for appointment or election as a Director must be pre-approved by the Central Bank of the UAE.

We assess the expertise and competencies of our Board members through a mapping exercise that is annually updated to ensure the skills and experience of Directors remain relevant to the ADCB’s strategy and operating environment. The procedure for suitability assessment and appointment of Board members is a key element of the Group’s governance system. The Board receives regular training to ensure members remain at the forefront of new developments in the banking and regulatory landscape and regularly engages with senior management on specialist topics when required. In 2021, the Board was provided with briefing sessions on the latest developments on ESG topics. In the future, we are planning to conduct training sessions with subject matter experts on specific ESG topics for the Board, including climate change, the latest regulatory developments on sustainable finance and other material ESG topics.

A performance evaluation of the Board, Board Committees and individual Directors is conducted on an annual basis, with a view to constructively identify areas of success and achievement, as well as areas that may require improvement. In addition, an external consultant is appointed to independently evaluate the performance of the Board, Board Committees and individual Directors at least once every three years. The Directors’ Performance Evaluation Policy was last approved in July 2020.

All employees and representatives of the Bank must read and accept our Code of Conduct, which outlines the expected standards of ethics and professional behaviour. It also provides an overview of key legal and regulatory requirements and policies and promotes a culture of integrity.

ADCB’s Vendor Code of Conduct is formally communicated to suppliers upon engagement.

We respect and support the United Nations Universal Declaration on Human Rights. This includes protecting the rights of our employees to be free from discrimination based on race, nationality, colour, ethnic origin, gender, disability, or religion. ADCB upholds equality and justice and ensures favourable and safe working conditions for our employees. We have zero-tolerance for harassment and bullying, the exploitation of children, and human trafficking.

Through our Whistleblowing Policy, we actively encourage anyone who has noticed or suspects any malpractice or fraudulent activity, or any breach of the Code of Conduct, to report the matter immediately. This policy applies to both existing and ex-employees of the Bank and third-party vendors.

Our Tax Risk Governance (TRG) framework identifies and outlines a Group-wide approach for the consistent management of tax risks.

The TRG Framework is followed with respect to all worldwide taxes where ADCB Group has regulatory obligations. Rules within the framework include:

• The Bank does not use transfer pricing to artificially shift or accumulate profits in low tax jurisdictions
• ‘Tax havens' are not used for tax avoidance purposes, but only for legitimate Group funding and liquidity purposes
• The Bank does not use the secrecy rules of jurisdictions to hide assets or income and pays taxes where the underlying economic activity occurs
• The Bank does not tolerate tax evasion and will take appropriate action against any employee who is found to have facilitated tax evasion
• ADCB Group does not give any tax advice to third parties and does not promote tax avoidance to its customers

The Group Tax Department is centralised and carries out the day-to-day management of each Group member’s tax affairs - identifying, assessing, monitoring, avoiding, or mitigating any tax risk and ensuring that any material risks are reported to senior management.

The Group Tax Department is also responsible for managing relationships with local tax authorities and external tax advisors to ensure compliance wherever we operate. ADCB Group continues to apply for tax rulings from the UAE tax authority in order to ensure the Group’s tax applications are fully compliant with local tax laws. The Bank also proactively engages with local tax authorities to disclose any significant inaccuracies which may arise, via voluntary disclosure to the relevant tax authorities.

Spotlight on Country-By-Country Reporting (CbCR)

ADCB Group is required to file a Country-by-Country Report (CbCR) to the UAE Ministry of Finance annually. This provides tax information about the global allocation of income, taxes paid, and indicators of the location of economic activity among tax jurisdictions in which ADCB Group operates. ADCB Group also complies with the corresponding CbCR reporting requirements in other jurisdictions where we operate.