Corporate Governance Statement
Corporate Governance is the process that directs how organizations run their business operations. AlizzIslamic bank is committed to achieve the highest standards of corporate governance through the strict application of its policies to ensure that business is conducted in a manner of transparency and fairness whilst remaining fully Sharia compliant.
Board Of Directors
The Board of Directors (the Board) are accountable for the overall strategy, financial performance and policy formulation for the Bank, ensuring that a clear set of guiding principles that underpin the banks strategic objectives and financial plans are provided to management to run the bank.
The Board shall also develop and adopt internal regulations for the management of the bank, its business and personnel affairs. The Board shall perform its functions consistent with all applicable banking laws and regulations of the Sultanate of Oman and all international regulations it is required to observe.
Within the bank, the role of the Chairman of the Board of Directors (the Board) is to run the Board,whilst the role of the Chief Executive Officer (CEO) is to run the AlizzIslamic bank business. The Board is responsible for overseeing the activities of the CEO and his senior management team in achieving the strategic objectives of the bank for the benefit of its shareholders and other key stakeholders.
The Board ensures that the highest levels of corporate governance is achieved through the following board sub committees:
Board Sub Committees
The Board discharges its corporate governance obligations through the following sub committees:
Executive Committee "Excom"
The Board Executive Committee (EXCOM) assists the Board in overseeing the Management of the Bank. EXCOM is responsible for the reviewing, monitoring and approval of key financial and non-financial businesses, investments and operations decisions for the Bank within the authority prescribed by the Board. EXCOM also assists the Board in fulfilling its oversight responsibilities in relation to granting credit (as delegated by the Board), making settlements, and cancellation of debt decisions and on exceptions that represent unusual credit risks.
The primary role of the Audit Committee is to provide assistance to the Board by overseeing the accounting and financial reporting processes and operations of the bank. It does this by reviewing the audits of the financial statements of the bank, the adequacy and effectiveness of the systems of internal control, compliance with relevant laws and legislation and reviewing the independence, qualifications and performance of the external auditor.
The Audit Committee meets quarterly to review the work of the Internal Audit Department, challenge the Bank's management and to assess the overall control environment prevailing in the bank and offers advice and guidance in relation to risk management and fraud.
The committee also reviews the independence of the Internal Audit department staff the through the introduction of an 'Auditors Annual Independence Statement' which requires all staff to confirm that there are no conflicts of interest arising from any review they are required to undertake. The Committee is also responsible for the approval of the annual audit plan.
Risk & Compliance Committee
The Committee is responsible for assisting the Board in fulfilling its oversight responsibilities pertaining to risk management and compliance; recognizing compliance as a core risk management activity within the Bank. By establishing, monitoring and reviewing; internal control, compliance and risk management policies, processes and systems within the Bank; ensuring conformance with regulatory requirements as well as alignment with leading standards such as Basel and COSO amongst others for consideration.
The key areas of authority of the Risk & Compliance Committee are to oversee, for the bank:
- Aggregate risk exposure and the level of risk assumed for the Bank.
- Risk management and compliance decisions for the Bank.
- The effectiveness of the risk management and compliance systems and controls.
- Management's compliance with established risk-related limits and policies.
- Management's adherence to statutory compliance requirements; AML, KYC, reporting, etc.
- The performance of the Bank's risk and compliance functions.
In relation to credit risk, the Committee shall only be involved in overseeing risk policies, validity of models, delegations of authority and loan exposure and concentration.Aspects related to the continuing Management of credit risk decisions shall be delegated by the Board separately to the Executive Committee.
In the Committees capacity to oversee compliance related matters, the Committee will have access to the Banks Executive/Senior Management, external auditors and outside counsel, the Committee will also be privy to all relevant information, as necessary to carry out its activities.
Nominations & Remunerations Committee
The objective of the Nominations & Remunerations Committee of the Board (the committee) is to assist in the nomination of suitably qualified persons to serve as Directors of Alizz Bank. The committee will also assist the Board to select and appoint suitably qualified candidates to the bank's senior management roles (AGM and above in addition to Head of Control Functions). The committee shall also produce clear and transparent reports, which inform the bank's shareholders of the remuneration paid to both directors and senior management.
Sharia Supervisory Board
The Sharia Supervisory Board (SSB) is an independent body of Sharia scholars specialised in Fiqh al Mu'amalat (Islamic commercial jurisprudence) and shall oversee the Bank operations from a Sharia compliance perspective. The SSB is entrusted with the responsibility to directing, reviewing, and supervising the activities of the Bank to ensure they are in compliance with Sharia principles and regulatory requirements.
The Bank established Shari'a Audit and Compliance Department headed by Internal Sharia Reviewer in order to cater all Sharia audit and compliance requirements. All of SACD activities are directed by the SSB, who has regular meetings throughout the year to discuss the matters pertaining to the Bank's transactions and activities, issue Fatwas and revise audit reports.SACD plays various important roles towards their ultimate objective of Shari'a Compliance across all customer dealings, products and services.
The bank ensures strict adherence to its corporate governance principles through the rigid application of the following policies:
- Related Party transactions;
- Codes of Conduct for both Directors and staff;
- Anti-Money Laundering Policy;
- Anti-Fraud Policy;
- Disclosure Policy.
In addition, the bank has a Board approved Whistleblowing Policy and process under which staff are encouraged to report any wrongdoing they may observe in the bank.