The Board of Directors has continued to ensure proper implementation of Corporate Governance principles in the operations of the Group. The Directors have also continued to endorse and insist on compliance with the provisions of the Group's Code of Corporate Governance, which has incorporated most of the provisions of the Central Bank of Nigeria (CBN) Code on Corporate Governance for Banks in Nigeria – Post Consolidation, and the revised Securities and Exchange Commission (SEC) Code of Corporate Governance.
A. THE BOARD
The Board is composed of 16 members, including the Chairman, who
is a Non-Executive Director, the Managing Director, five executive Directors
and nine other Non-Executive Directors (including two independent directors).
The Board has five Committees. These are the Risk Management Committee, Finance
and General Purpose Committee, Credit Committee, Audit Committee and the
Nomination and Evaluation Committee. In addition to the Board Committees there
are regular Management meetings
The Board reviews corporate performance, authorizes and monitors strategic decisions whilst ensuring regulatory compliance and safeguarding the interests of shareholders. It is committed to ensuring that the Group is managed in a manner that will fulfill stakeholders' aspirations and societal expectations. The Board has provided leadership for achieving the strategic objectives of the Group. The Board met seven times during the 2008/2009 financial year, and had one orientation session for new Directors.
Appointments & Retirements
Sadly during the last financial year Mallam Ibrahim Jega passed away. Alhaji Abdulqadir Jelli Bello who was a senior management staff member in the Bank, was appointed an Executive Director. The appointment was subject to the usual rigorous and transparent process as laid down by both the CBN and the Group's code of Corporate Governance. This is driven by a desire to ensure that all the Directors of the Bank bring the requisite skills, integrity and experience to bear on the Board's proceedings. .
Chairman and Chief Executive
In line with best practice and in accordance with the Provisions of both the CBN and the UBA Group Codes of Corporate Governance, the responsibilities of the Chairman and the Chief Executive Officer have remained separate. While the Group's Chairman, Chief Ferdinand Alabraba, is responsible for the leadership of the Board and creating the conditions for overall Board and individual Directors' effectiveness, the Chief Executive Officer, Mr. Tony Elumelu (MFR), is responsible for the overall performance of the Group, including the responsibility of arranging effective day-to-day management controls.
Independent Professional Advice
All Directors are aware that they may take independent professional advice at the expense of the company, in the furtherance of their duties. They all have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that all governance matters are complied with and assists with professional development as required.
B. ACCOUNTABILITY AND AUDIT
The Board has presented a balanced assessment of the company's position and prospects. The Board is mindful of its responsibilities and is satisfied that in the preparation of its Financial Report it has met with its obligations under the Group's Code of Corporate Governance. The Directors make themselves accountable to the shareholders through regular publication of the Group's financial performance and Annual Reports. The Board has ensured that the Group's reporting procedure is conveyed on the most up-to-date infrastructure to ensure accuracy. This procedure involves the monitoring of performance throughout the financial year in addition to monthly reporting of key performance indicators.
The Group has consistently improved on its internal control system to ensure effective management of risks. The Directors review the effectiveness of the system of internal control through regular reports and reviews at Board and Risk Management Committee meetings.
C. CONTROL ENVIRONMENT
The Board has continued to place emphasis on risk management as an essential tool for achieving the Group's objectives. Towards this end, it has ensured that the Group has in place robust risk management policies and mechanisms to ensure identification of risk and effective control. The Board approves the annual budget for the Group and ensures that a robust budgetary process is operated with adequate authorization levels put in place to regulate capital expenditure.
D. SHAREHOLDER RIGHTS
The Board places considerable importance on effective communication with its shareholders. It ensures that the rights of shareholders are protected at all times. Notice of meetings and all other statutory notices and information are communicated to the shareholders regularly.
E. BOARD COMMITTEES
The Board Committees consist of:
The Risk Management Committee: This Committee comprises three Executive Directors and three Non-Executive Directors (one of whom acts as Chairman). The Group Chief Credit Officer and the Group Legal Counsel are in attendance at the Committee meetings. The Director, Group Audit and Control gives regular reports to the Committee on Internal Control exceptions and the compliance status of the Bank. Amongst its other functions, the Committee sets out the Bank's policies on monitoring, reviewing and assessing the integrity and adequacy of the overall risk management framework of the Group; setting the Group's appetite and tolerance for risk and approving risk limits within acceptable tolerance for risk; considering and approving all risk management policies and frameworks for the Group and monitoring compliance risk; and ensuring that the Group operates ethically. The Board Risk Management Committee also oversees the OCC Remediation process. The quorum for its meetings is four.
The Nomination and Evaluation Committee: This Committee comprises three Non-Executive Directors. The terms of reference of the Committee include to recommend an executive remuneration and incentive policies; to determine the entitlements of Non-Executive Directors of the Bank in conjunction with the Managing Director; to select, review and nominate candidates for all Board positions, both executive and non-executive. Quorum for meetings is three with the Group Managing Director in attendance. The Committee meets as may be required by the Bank.
The Finance and General Purpose Committee: The Committee comprises Executive Directors and Non-Executive Directors, one of whom is Chairman of the Committee. The quorum for the meeting is five, of which one must be a Non-Executive Director. Amongst its functions is to recommend strategic initiatives to the Board, review the budget and the audited accounts of the Group, approve a compensation policy and to review compensation for Assistant General Managers and above.
The Board Audit Committee: The Board Audit Committee was set up to further strengthen internal controls in the Group. It assists the Board of Directors in fulfilling its audit responsibilities by ensuring that an effective system of financial and internal controls is in place within the Group. The Committee comprises an equal number of Executive and Non-Executive Directors.
The Statutory Audit Committee: The Statutory Audit Committee was set up in accordance with the provisions of the Companies and Allied Matters Act, CAP20, 2004. Its membership comprises a mix of Non-Executive Directors and ordinary shareholders elected at an Annual General Meeting. Its terms of reference include the monitoring of processes designed to ensure compliance by the Group in all respects with legal and regulatory requirements, including disclosure, controls and procedures, and the impact (or potential impact) of developments related thereto. It evaluates annually, the independence and performance of the External Auditors. The Committee also reviews with Management and the External Auditors, the annual audited financial statement before its submission to the Board.
The Board Credit Committee: The Board Credit Committee was set up to assist the Board of Directors in the discharge of its responsibility to exercise due care, diligence and skill in overseeing, directing and reviewing the management of the credit portfolio of the Group. Its terms of reference include determining and setting the parameters for credit risk and asset concentration and reviewing compliance with such limits; determining and setting the lending limits; reviewing and approving the Group's credit strategy and credit risk tolerance. The Committee also reviews the loan portfolio of the Bank. It also reviews and approves country risks exposure limits. The Committee comprises six members, with the Group Chief Risk Officer in attendance.
E. BOARD COMMITTEES
The Companies and Allied Matters Act CAP C20 LFN 2004 and the Banks and Other Financial Institutions Act CAP B3 LFN 2004, require the Directors to prepare financial statements for each financial year that give a true and fair view of the state of financial affairs of the Bank at the end of the year and of its profit or loss. The responsibilities include ensuring that the Bank:
- keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the Bank and comply with the requirements of the Companies and Allied Matters Act and the Banks and Other Financial Institutions Act;
- establishes adequate internal controls to safeguard its assets and to prevent and detect fraud and other irregularities; and
- prepares its financial statements using suitable accounting policies supported by reasonable and prudent judgments and estimates, that are consistently applied.
The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with:
- Nigerian Accounting Standards;
- Prudential Guidelines for licensed Banks;
- relevant circulars issued by the Central Bank of Nigeria;
- the requirements of the Banks and Other Financial Institutions Act;
- and the requirements of the Companies and Allied Matters Act.
The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the United Bank for Africa Plc and Group, and of the profit for the year. The Directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control.
Nothing has come to the attention of the Directors to indicate that the Bank will not remain a going concern for at least twelve months from the date of this statement.