In keeping with its principal responsibilities, Board of Directors has continued to ensure that the highest standards in corporate governance are maintained, with a objectives of reinforcing the confidence and trust of the investing public, increasing customers’ satisfaction and building a strong and ethical regional institution
On an annual basis, the ECHMB adopts the latest developments in corporate governance implemented by leading region and internationally companies in an effort to ensure that its procedures are in line with the international best practice. ECHMB corporate governance statement objective is to provide a comprehensive analysis into the corporate governance practice of the Bank. The Board is committed to achieving the highest standards of business integrity, ethics and professionalism across all of the Group’s activities. The fundamental approach adopted is to ensure that the right executive leadership, strategy and internal controls for risk management are well in place. Nonetheless, the Board also continuously reviews its governance model to ensure that its relevance, effectiveness and ability to meet the challenges of the future remain sustainable.
The Board is guided by the Board charter and the ECHMB Act of 1995 which provide reference for directors in relation to the Board’s role, powers, duties and functions. Apart from reflecting the current best practices and the applicable rules and regulations, the Charter outlines processes and procedures to ensure the Bank’s boards and their committees’ effectiveness and efficiency. The Charter is updated to reflect changes to the Bank’s policies, procedures and processes as well as amended relevant rules and regulations.
Roles and responsibilities of the Board
It is the responsibility of the Board to periodically review and approve the overall strategies, business, organisation and significant policies of the Bank. The Board also sets the Bank’s core values and adopts proper standards to ensure that the Bank operates with integrity.
The responsibilities of the Board are as follows:-
- Reviewing succession planning and talent management plans for the Bank, and approving the appointment and compensation of senior management;
- reviewing and approving the strategies and business plans for the Bank;
- Identifying and managing principal risks affecting the Bank;
- reviewing the adequacy and integrity of the Bank’s internal control systems;
- approving new policies pertaining to staff salary and benefits;
- approving changes to the corporate organisation structure; and
- approving the appointment of the Chief Executive Officer.
Director independence and Independent Non-Executive Directors
The Board consists entirely of non-executive directors which helps the Board to provide strong and effective oversight over management. The Non-Executive Directors do not participate in the day-to-day management of the Bank and do not engage in any business dealing or other relationships with the Bank (other than in situations permitted by the applicable regulations) in order to ensure that they remain truly capable of exercising independent judgement and act in the best interests of the Bank and its shareholders.
Further, the Board is satisfied and assured that no individual or group of Directors has unfettered powers of decision that could create a potential conflict of interest. Additionally, the Board ensures that all Independent Non- Executive Directors possess the following qualities:-
- ability to challenge the assumptions, beliefs or viewpoints of others with intelligent questioning, constructive and rigorous debating, and dispassionate decision making in the interest of the Bank;
- Willingness to stand up and defend his own views, beliefs and opinions for the ultimate good of the Bank; and a good understanding of the Bank’s business activities in order to appropriately provide responses on the various strategic and technical issues confronted by the Board.
Quality and Supply of information to the Board
In order to effectively discharge its duties, the Board has full and unrestricted access to all information pertaining to the Bank’s businesses and affairs as well as to the advice and services of the senior management. In addition to formal Board meetings, the Chairman maintains regular contact with the Chief Executive Officer to discuss specific matters, and the latter assisted by the Company Secretary ensures that frequent and timely communication between the senior management and the Board is maintained at all times as appropriate. The Board is regularly kept up to date on and apprised of any regulations and guidelines.
The Company Secretary, is responsible for advising the Board on issues relating to corporate compliance with the relevant laws, rules, procedures and regulations affecting the Board and the Bank, as well as best practices of governance. She is also responsible for advising the Directors of their obligations and duties to disclose their interest in securities, disclosure of any conflict of interest in a transaction involving the Bank, prohibition on dealing in securities and restrictions on disclosure of price-sensitive information. All Directors have access to the advice and services of the Company Secretary.
Conflict of Interest
It has been the practice of ECHMB, in line with various statutory requirements on the disclosure of director’s interest, that members of the Board make a declaration to that effect at the Board meeting in the event they have interests in proposals being considered by the Board, including where such interest arises through their association with Primary Lenders. Any interested Directors would then abstain from deliberations and decisions of the Board on the subject proposal and, where appropriate, excuse themselves from being present in the deliberations.
Structured Training Programme for Directors
Directors are expected to participate in the Directors Accreditation Programme (DEAP). This is an advanced director training course, aimed at preparing directors for the important role that they play in the governance of the Bank. The DEAP was developed by the Institute of Chartered Secretaries and Administrators/Chartered Secretaries Canada (ICSA/CSC), in partnership with the law firm of Borden Ladner Gervais, and with contributions from AON Canada.
This Committee is responsible for supervising assets and liability management and examination and approval of financial commitments of the Bank in accordance with the regulations and policies established by the Board. The Committee is comprised of the following members:-
§ Hon Sir K Dwight Venner – Chairman
§ Gordon Derrick
§ Dexter Ducreay
This Committee provides guidance on the Bank’s systems of accounting and internal controls and thus ensuring the integrity of financial reporting. This Committee also serves as an effective liaison between executive management and the external auditors. The Committee is comprised of the following members:-
§ Dexter Ducreay - Chairman
§ Louis A Williams
§ Mr. Henry Hazel
The 2012 activities of the Committee included:
§ Reviewing compliance with financial covenants;
§ review and approved the external audit plan and timetable;
§ evaluating the performance of the External Auditors and approving their audit fees;
§ review the External Auditors’ 2012/13 management letter and report on the 2012/13 audit;
§ approving the 2012/13 audit engagement letter;
§ reviewing on monthly management accounts;
§ examining the implications of changes to International Financial Reporting Standards; and
§ approving the 2012/13 Internal Audit Plan, reviewing Internal Audit report and monitoring Management action on Internal Audit recommendations;
In addition, the Committee continued its work to strengthen the Bank’s risk management framework. Some of the main accomplishments during FY 2013:
§ Update of the Treasury Risk Management System.
§ Review of country exposure to manage the exposure limits to any one country or group of Primary Lender.
This Committee considers and approves the ECHMB’s Strategic Plan and is comprised of the following members:-
§ Gordon Derrick - Chairman
§ Dexter Ducreay
§ Mr. Henry Hazel
The responsibilities of the Strategic Committee include the following:
- to review and recommend strategic actions to be taken by the Bank for the Board’s approval;
- to develop and foster a risk aware culture within the Bank;
- to review and approve risk management strategies, risk frameworks, policies, risk tolerance and risk appetite limits, adequacy of risk management policies and framework in identifying, measuring, monitoring and controlling risks and the extent to which they operate effectively;
- to ensure infrastructure, resources and systems are in place for risk management, i.e. that the staff responsible for implementing risk management systems perform those
duties independently of the financial institution’s risk –taking activities;
- to review and assess the appropriate levels of capital for the Bank, vis-à-vis its risk profile;
Human Resources Committee
This committee is responsible for staff compensation and the approval of amendments to staff policies. The Committee is comprised of the following members:-
§ Gordon Derrick- Chairman
§ Dexter Ducreay
§ Louis A Williams
The ECHMB Best Practice
- Since incorporation, ECHMB’s Board of Directors has been chaired by a non-executive Chairman to ensure independent leadership.
- Shareholders appoint directors every two (2) years in accordance with the Eastern Caribbean Home Mortgage Bank Agreement.
- The five (5) directors are non-executive and are required to declare their interests in any transaction that the ECHMB undertakes.
- Board Committees have the authority to retain independent advisors, as determined necessary by each Committee.
- The Internal Audit function is undertaken by an independent contractor.
- The Audit Committee meets separately with the Internal Auditor