The definition of corporate governance

Corporate governance is an essential part of union national bank Egypt corporate identity, conducted within a framework set with reference to the company’s stakeholders and union national bank Egypt in the community.
Improved corporate governance principles are in the process of being embedded in all the banks activities, fully supported by the management team in their day–to–day activities.

The release of international standards by the governance has provided a benchmark for strengthening the principles and practices to be applied. The medium term will see the core principles further enhanced and practiced. UNB-Egypt has three driving tenants of fairness, transparency and accountability. It recognizes that strong leadership and good corporate governance will have a positive impact on staff, shareholders, regulators and its business partners.

All directors are provided with guidelines, which set out their roles, duties, responsibilities and obligation. Additional obligations are placed on the chief financial officer, chief risk officer and head of the audit committee.

A legal framework is provided by central bank of Egypt requirements, and regulatory requirements arising from our branches operations in Egypt.

Governance Policy

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Governance Report – 2016

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Shareholders

Shareholders have a legal obligation to be involved in the most important decisions. These include (but are not limited to) amendments of articles of association, stock offering, setting the annual dividend and approving the annual audited accounts.

Management board

Management board is provided by a board of directors supported an executive mana gement team. The board has extensive local contacts, which are used to further union national bank corporate aims. Business relationships are conducted with companies in which board members have direct involvement, either through Ownership or by holding board positions. Where conflicts of interest arise provisions are in place to excuse a director from discussions and votes.
UNB-Egypt believes that all business is conducted on terms equivalent to those that would be undertaken if no relationship existed. The executive management team is responsible for the day–to–day operation of the company. It consists of the deputy CEO, and senior officers from risk and the main business areas. The team set policy and procedures, review reports, set priorities and establish strategic plans.

Union national bank Egypt board of directors

Membership: the board consists of five members. All the members are independent within the parameters defining board member independence contained in the code of corporate governance. Constitution of the board: The board is elected every three years by the annual general meeting (general assembly) of the shareholders. A voting process by Casting of ballot takes place with an observer from the relevant regulatory authorities present. Meeting of the board:the boards of directors convene every two months and hold six meetings (at minimum in every financial year).board meetings are held in the head office of the bank,after a detailed agenda and supporting notes are Distributed to the members normally one week in advance.

There is dedicated board secretary and all decisions are record as minutes and signed. Board records are available for inspection by the relevant regulatory authorities. Related party dealing is regulated by a strict related party policy and filtering process.

Related party transactions are reported to the shareholders at the annual general meeting and contained in the annual reports of the bank. As a part of board discipline and good governance .members with an interest in any issue being brought for board consideration are excluded from participation. None of the transactions conducted with involved companies have been financially material to UNB-Egypt.

The dividend policy of the bank, which is clearly documented, seeks to reward investors for their confidence but at the same time ensure prudential provisioning which is a pre-requisite for building up a strong banking institution. There is a balance between investor’s interests and supporting the future growth of the bank.

Board of committees

The board has established three major board committees namely the audit committee. The executive committee and the credit committee. The audit committees meets at least three times a year and whenever it is necessary to review all the reports issued by the internal audit and compliance departments, external and instruct the management to address the issues raised therein.

The executive committee reviews and takes action in respect of transactions exceeding the authorities delegated to the management committees. The policies and procedures development committee reviews and follow up the up the update of policies and procedures manuals for all activities of the bank.

Disclosure standards:

The bank adheres to the disclosure standards of Egyptian securities market on which its shares are listed. The disclosure standards set out in the implementation of a revised capital accord Basel 2 are used as a benchmark. Potential investors and counterparties are encouraged to conduct site visits
to the bank where viable, subject to signing suitable confidentiality agreements.

Corporate social responsibility

Corporate social responsibility is best defined as what an organization gives back to the society it operates in.

UNB-Egypt believes acting responsibly is a form of gratitude, contributing to the society that provides it with business sustenance.UNB-Egypt has always respected the affection and regard it has in its home country .and it seeks to actively contribute so as to improve the welfare of all Societies operates in. consistent with the policy, UNBE provides preferential opportunities to
Egyptian nationals.

This seeks to build the local skill set to enable the future generation to maintain and sustain the growth of both the company and the country using indigenous resources.

Code of ethics & code of conduct

Integrity cannot be legislated for within a business. As it should be a integral part of eldership; however it can be supported by a formalized code of conduct and ethics. Each member of staff receives guidance in this area as part of their induction process. Standards are set such as the maximum values for gifts staff can receive. Where a conflict of interest arises staff must refer to their managers For guidance. Building a strong control and risk and risk aware organization is seen as an essential pillar for UNBE. The goal is to establish UNBE as the most respected institution.

Anti-money laundering & combating financial terrorism

UNB-Egypt has achieved a noticeable success in complying with the requirements of anti-money laundry law no 80for the year 2002 and its executive regulations. And the control measurements
against money laundering issued by the central bank of Egypt.

Internal controls

Are formulated to ensure optimal efficiencies and to safeguard the banks interests. The board and management follow best industry practices and Basel 2 Principles as benchmarks for the development and monitoring of the effectiveness of the internal control systems. It governance is being developed to support a cohesive technology and control system approach.

The bank follows the prescriptions of the international financial reporting standards (IFRS) in the preparation of its accounts and financial statement. in keeping with the responsibilities of board, UNB-Egypt board has formulated and implemented a full suite of policies as required by CBE regulators.

Affirmations

  1.   The board of directors and management affirm that the bank is in excellent financial health and is expected to sustain its growth in the medium term.
  2. The board and management seek to follow the best practices to implement the code of corporate governance in letter and spirit.
  3. The board engages external agencies to conduct comprehensive review of the effectiveness of internal controls of the bank to identify significant gaps in its internal control framework.
  4. The insurance cover which is maintained by the bank is sufficient to cover the risks which the regulators have identified and prescribed.
  5. International prescriptions of capital adequacy are observed and regulated by the CBE and covering specific sectors and liquidity.

Risk management

The board and the executive management are the ultimate owner of all risks taken by UNBE. They seek to balance the risk profile against sustainable returns so as to achieve the business aims of UNB-Egypt.
The purpose of risk management is to independently measure,analysis, report mange and mitigate the risk profile within parameters set by the board and international regulators.

The risk function is headed by chief risk officer (assistant general manager-risk)

  • The risk function is headed by an assistant general manager who:
  • Owns the short term risk plan.
  • Owns the groups risk appetite (and frequency of review).
  • Regularly monitors performance of process, business and skill requirements against risk appetite statement.
  • Chairs the risk committee.

Risk committee is responsible for:

  1. Performance risk appetite.
  2. Risk trends.
  3. Risk concentrations.
  4. Provisions experience budget / plan.
  5. Key performance indicators (for risk).

The risk committee:

  1. Reviews the appropriations of the groups risk measurement systems.
  2. Assesses the adequacy of risk management controls and processes on cluster-by-cluster basis according to different risk types. This could be product, business area or countryled.
  3. Sets standards for the groups risk control framework.
  4. Reviews and update (where required) relevant policy statements required by the regulators on behalf of the board.
  5. Receives and reviews the adequacy of reports that assess the nature and extent of risks facing the group, to include assessments of:
  • The likelihood of the risks concerned materializing.
  • The completeness of the groups system of internal controls to manage risks faced by the institutions. Risk appetite established through a formalized process that considers capacity, current position and
    constraints. The risk appetite is reviewed regularly and is used to guide risk planning and capital allocation.