CORPORATE GOVERNANCE BLACKICE INC. REFERENCE PRESENTATION FEBRUARY 2017

Transcription

1 CORPORATE GOVERNANCE BLACKICE INC. REFERENCE PRESENTATION FEBRUARY 2017

2 CORPORATE GOVERNANCE PRINCIPLES

3 CORPORATE GOVERNANCE 3 Board Strctre and Responsibilities An effective Corporate Governance program at an instittion shold contain a management and board strctre with clearly defined roles and responsibilities. The strctre is spported by comprehensive polices and processes that are established by management to meet a Board approved Risk Appetite Statement. Three Lines of Defence Management Strctre and Responsibilities An effective Three Lines of Defence model is key to mitigate risk and ensre independent oversight. Processes Polices

4 RISK GOVERNANCE 4 Managing risk is a shared responsibility where bsiness nits and risk management grops work in collaboration to ensre that bsiness strategies and activities are aligned to the risk appetite, as well as to maintain high levels of risk awareness and a strong risk management cltre. Strong governance is critical to managing risk effectively. Board Risk Management Committee Adit Committee Senior Exective Team Asset Liability Committee Capital & Risk Committee Governance Committee Reptational & Legal Committee Credit Committee Investment Committee Model Committee Capital Markets Committee

5 BOARD VS. MANAGEMENT 5 The Board and Senior Management are ltimately accontable for the safety and sondness, and its compliance with governing legislation. Board Responsibilities Management Responsibilities Providing stewardship, inclding directionsetting and general oversight of the management and operations of the entire instittion. Implementing the Board s decisions, and is responsible for directing and overseeing the operations of the instittion. This distinction in the responsibilities between the Board and Senior Management is critical.

6 AT A MINIMUM THE BOARD SHOULD 6 Approve Review and Discss Short-term and long-term enterprise-wide bsiness objectives, strategy and plans (capital, financial, liqidity), inclding the Risk Appetite Framework Significant strategic initiatives or transactions, sch as mergers and acqisitions Internal control framework Appointment, performance review and compensation of the CEO and other Senior Management fnctions Sccession plans with respect to the Board, CEO and other Senior Management fnctions Significant operational and bsiness policies Bsiness and financial performance relative to the Board-approved strategy and Risk Appetite Framework Compensation policy for all hman resorces, to be consistent with Financial Stability Board (FSB) Principles for Sond Compensation and related Implementation Standards Implementation of internal controls, inclding their effectiveness Organizational strctre Mandate, resorces and bdgets for the oversight fnctions Compliance with applicable laws, reglations and gidelines External adit plan, inclding adit fees and the scope of the adit engagement

7 BOARD ASSESSMENT 7 The Board shold nderstand the decisions, plans and policies being ndertaken by Senior Management and their potential impact on the instittion. It shold probe, qestion and seek assrances from Senior Management that these are consistent with the Board-approved strategy and risk appetite and that controls are designed and operating effectively. The Board shold establish processes to periodically assess the assrances provided to it by Senior Management

8 BOARD COMPETENCIES 8 Relevant financial indstry and risk management expertise are key for Board members. There shold be reasonable representation of these skills at the Board and Board Committee levels. In order to assess the skills and competencies reqired to oversee the instittion's strategy, prodcts, and risks, Boards shold have a skills and competency evalation process, which shold be reviewed annally and pdated by the appropriate Board committee. The skills and competency evalation process shold be integrated with the overall Board sccession or Board renewal plans, with particlar attention to the positions of the Chair of the Board and Chairs of the Board committees.

9 BOARD INDEPENDENCE AND INTERFACE 9 The Board shold be independent from Senior Management, thereby allowing for the behavior and decision-making activities to be objective and effective. Independence can be demonstrated throgh reglarly schedled meetings withot the presence of Senior Management. To flfill responsibilities, the Board relies on Senior Management to provide sond advice on the organizational objectives, strategy, strctre and significant policies. Senior Management shold set ot and analyze options for the Board, identify potential tradeoffs of each option, and make and spport recommendations. Senior Management shold ensre that the information and material presented in a manner that enables the Board to focs on key isses and to make informed decisions. Senior Management shold provide assrances to the Board that policies, processes and controls are designed and operating effectively and that risk is being mitigated and accrately and conservatively measred.

10 BOARD CONTROL FRAMEWORK 10 The Board shold approve the overall internal control framework and monitor its effectiveness. The Board shold receive reglar reports on the performance of risk management and the control framework, inclding the ineffectiveness or significant breaches of these controls, the instittion s code of condct, or laws and reglations. The Board shold seek assrances from Senior Management that prompt action is being taken to correct any material internal control deficiencies or breaches, and that there is a process in place to monitor and report on the progress made to correct sch deficiencies.

11 RISK MANAGEMENT COMMITTEE 11 The Risk Management Committee (RMC) shold have a sond nderstanding of the risks and the techniqes and systems sed to identify, measre, monitor, report on and mitigate those risks. The RMC shold have a clear mandate. All committee members, inclding the Chair, shold be non-exectives, and an adeqate nmber of committee members shold have sfficient knowledge in the risk management of financial instittions. Where appropriate, the RMC shold inclde individals with technical knowledge in risk disciplines that are significant to the instittion. As part of its dties to oversee risk management the RMC shold seek assrances from the CRO (or eqivalent) that the oversight of the risk management activities are independent from operational management, are adeqately resorced, and have appropriate stats and visibility throghot the organization. The RMC shold receive timely and accrate reports on significant risks and exposres relative to the risk appetite statement (inclding approved risk limits).

12 CHIEF RISK OFFICER 12 The CRO and the risk management fnction are responsible for identifying, measring, monitoring and reporting on the risks on an enterprise-wide and disaggregated level, independently of the bsiness lines or operational management. The CRO and risk management fnction shold not be directly involved in revene-generation or in the management and financial performance of any bsiness line or prodct, and compensation shold not be linked to revene generation performance. The CRO shold provide reglar reports to the Board, the Risk Committee and Senior Management in a manner and format that allows them to clearly nderstand the risks being assmed. They shold provide an objective view to how the bank is operating in relationship to the Risk Appetite Statement. The CRO shold meet with the Risk Committee or the Board on a reglar basis, with and withot the CEO or other members of Senior Management present. The CRO and risk management fnction shold have processes and controls in place to assess the accracy of any risk information or analysis provided by bsiness lines in order to be in a position to offer objective reporting. The Board and the Risk Committee shold periodically seek assrances from the CRO and risk management fnction as to the objectivity information or analysis provided.

13 AUDIT COMMITTEE 13 The Adit Committee shold review the annal statements, evalate and approve internal control procedres for the instittion, and meet with the Chief Internal Aditor to discss the effectiveness of the instittion s internal controls and the adeqacy of reserving and reporting practices. The Adit Committee shold review and approve the banks adit plans (internal and external) to ensre that they are appropriate, risk-based and address all the relevant activities over a measrable cycle, and that the work of internal and external aditors is coordinated. The Adit Committee shold probe, qestion and hold reglar in camera meetings with the external aditor, the Chief Internal Aditor, to nderstand all of the relevant isses and how these isses have been resolved. The Adit Committee shold discss with Senior Management and the external aditor the overall reslts of the annal and qarterly financial statements adits. The Adit Committee shold receive reports smmarizing deficiencies inclding the assessment of materiality and management s action plans to mitigate the risk.

14 ROLES AND RESPONSIBILITIES

15 OVERVIEW AND PURPOSE 15 A Roles and Accontabilities docment otlines how a bank is governed and managed at the most senior levels, in terms of its operating philosophy, strctre and control environment. The Roles and Accontabilities records, in one place, the roles and accontabilities of the Board of Directors and its Committees, the Chief Exective Office, Strategic Bsiness Unit and Fnctional Grop leaders, other senior governance officers and senior management committees. In so doing, the Roles and Accontabilities also illstrates how the roles and accontabilities of these individals and grops fit together in comprising the overall governance framework for a bank. The prpose of the Roles and Accontabilities is to promote awareness and nderstanding of these roles and accontabilities, thereby fostering strong working relationships at all levels of the bank and between exective management and the Board. The Roles and Accontabilities has several objectives: - To act as the single complete and primary record of all significant accontabilities across the bank; - To docment the mandates of the Board, its Committees, key Exective Officers and the committees that spport them; and - To form the basis for nderstanding and assessing governance controls.

16 SENIOR EXECUTIVE ROLES AND ACCOUNTABILITIES 16 Each Senior Exective shold have a docmented Roles and Accontable that incldes a description of the following topics: - Role - Position-specific Accontabilities - General Accontabilities - Contribtory Accontabilities - Advisory / Committee Accontabilities - Accontability for Policies Key Senior Exectives Chief Exective Officer Chief Risk Officer Chief Financial Officer Chief Operating Officer Grop Head Retail Banking Grop Head Wholesale banking Grop Head Wealth Management Grop Head Corporate Credit Hman Resorces Technology and Operations General Concil Treasrer Chief Aditor Chief Compliance Officer Chief Accontant Enterprise Architectre Strategy and Corporate Development Corporate Secretary Ombdsman & Chief Privacy Officer Chief Secrity Officer Control Framework Anti-Money Landering

17 MANAGEMENT COMMITTEES ROLES AND ACCOUNTABILITIES 17 Each Senior Management Committees shold have a docmented Roles and Accontable that incldes a description of the following topics: - Prpose - Accontabilities and Responsibilities - Committee Procedres - Meeting Freqency - Reporting - Material - Secretarial Spport - Conflicts of Interest - Role of the Chair - Committee Athority and Roles Key Management Committees Asset Liability Committee Capital and Risk Committee Credit Committee Disclosre Committee Reptational and legal Risk Committee Governance and Control Committee Investment Committee Model and Parameter Risk Committee Cyber Secrity Committee Recovery and Resoltion Governance Committee

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