Welcome

1. Welcome

2. The Board of Directors takes in the big picture by looking at and caring about the entire forest, leaving operations, the small details, and the individual trees to the charge of management. Jesus P. Estanislao, 2002

3. Core Competencies Of Bank Directors

4. Core Competencies (As per BRPD Circular No 11) a) The concerned person must have management/business or professional experience for at least 10 (ten) years; b) (S)he has not been convicted in any criminal offence or involved in any fraud/forgery, financial crime or other illegal activities; c) (S)he has not been subject to any adverse findings in any legal proceedings, d) (S)he has not been convicted in regard to contravention of rules, regulations or disciplines of the regulatory authorities relating to financial sector;

5. e) (S)he has not been involved with a company/firm whose registration/license has been revoked or cancelled or which has gone into liquidation; f) Loans taken by him/her or allied concern from any bank or financial institution have not become defaulted; g) (S)he has not been adjudicated a bankrupt by a court;  h) (S)he must be loyal to the decisions of the board of directors. However, in case of note of dissent, (s)he may record it in the minutes of the board meeting and/or bring it to the notice of Bangladesh Bank considering its merit. Core Competencies (As per BRPD Circular No 11)

6. Skills & Experience for Directors of Banks

7. Range of Board Responsibility Conformance activities Performance activities Accountability Formulating Strategy Outword Looking Supervising Executive Activities Setting policy Inword Looking Past & Future Focus Future Focus Adapted From: R. Tricker, Corporate Governance: Principals, policies & Practices (OUP, 2009)

8. Formation of Board of Directors The newly amended Section 15 of the Bank Company Act, 1991 (Amended up to 2013) includes provisions for prior approval of Bangladesh Bank before The appointment of new bank directors, as well as dismissal, termination or removal of any director from the post; director’s fit & proper criteria; maximum number of directors; appointment of independent directors; appointment of maximum 2(two) members from a family as director; etc.

9. Appointment of New directors a) Personal information of the nominated person;b)Nominated person’s declaration;c) ‘Declaration for confidentiality’ by the nominated person;d) In case of Independent director, the approval letter from Security and Exchangecommission;e) In case of Independent director, a declaration of the directors concern.f) CIB report of the nominated person;g) Updated list of the directors. Under section 15(4) of the Bank Company Act, 1991 (amended upto 2013), everybanking company, other than specialized banks, at the time of taking prior approval fromBangladesh Bank for appointing/reappointing directors should furnish the followingdocuments along with the application:

10. BOARD COMMITTEE For ensuring good governance in the listed companies, the board of directors shall have at least following sub-committees: Audit Committee; Risk Management Committee; Executive Committee.

11. Corporate Governance

12. Corporate governance is different from management. The role of management is to run the enterprise and that of the board is to see that it is being run well and in the right direction. Robert Tricker, 1998

13. THE TERM THUS REFERS TO THE RULES AND REGULATIONS Governance, Risk Management, and Compliance are three pillars that work together for the purpose of assuring that an organization meets its objectives. It is the combination of processes established and executed by the board of directors(BOD) that are reflected in the organization's structure and how it is managed and led toward achieving goals. Definition

14. Basel Committee Definition of the Corporate Governance “The allocation of authority and responsibilities, including :• set the bank’s strategy and objectives;• determine the bank’s risk tolerance/appetite;• operate the bank’s business on a day-to-day basis;• protect the interests of depositors, meet shareholder obligations, and take into account the interests of other recognized stakeholders, and• align corporate activities and behavior with the expectation that the bank will operate in a safe and sound manner, with integrity and in compliance with applicable laws and regulations.

15. BROADER DEFINITION Corporate governance is the term used to refer to the policies and processes by which a corporation/company is controlled and directed. Its structure specifies the distribution of rights and responsibilities among the company’s different participants, such as board, management, shareholders and other stakeholders. Corporate governance ensures Accountability and responsibility through a set of principles, incorporated in every part of an organization.

16. Basel Principles On Corporate Governance In Banks Principle : 01 The board has overall responsibility for the bank, including approving and overseeing management's implementation of the bank's strategic objectives, governance framework and corporate culture.

17. Basel Principles On Corporate Governance In Banks Principle : 02 Board members should be and remain qualified, individually and collectively, for their positions. They should understand their oversight and corporate governance role and be able to exercise sound, objective judgment about the affairs of the bank.

18. Basel Principles On Corporate Governance In Banks Principle : 03 The board should define appropriate governance structures and practices for its own work, and put in place the means for such practices to be followed and periodically reviewed for ongoing effectiveness.

19. Basel Principles On Corporate Governance In Banks Principle : 04 Under the direction and oversight of the board, senior management should carry out and manage the bank's activities in a manner consistent with the business strategy, risk appetite, remuneration and other policies approved by the board.

20. Basel Principles On Corporate Governance In Banks Principle : 05 In a group structure, the board of the parent company has the overall responsibility for the group and for ensuring the establishment and operation of a clear governance framework appropriate to the structure, business and risks of the group and its entities. The board and senior management should know and understand the bank group's organizational structure and the risks that it poses.

21. Basel Principles On Corporate Governance In Banks Principle : 06 Banks should have an effective independent risk management function, under the direction of a chief risk officer(CRO), with sufficient stature, independence, resources and access to the board.

22. Basel Principles On Corporate Governance In Banks Principle : 07 Risks should be identified, monitored and controlled on an ongoing bank-wide and individual entity basis. The sophistication of the bank's risk management and internal control infrastructure should keep pace with changes to the bank's risk profile, to the external risk landscape and in industry practice.

23. Basel Principles On Corporate Governance In Banks Principle : 08 An effective risk governance framework requires robust communication within the bank about risk, both across the organization and through reporting to the board and senior management.

24. Basel Principles On Corporate Governance In Banks Principle : 09 The bank's board of directors is responsible for overseeing the management of the bank's compliance risk. The board should establish a compliance function and approve the bank's policies and processes for identifying, assessing, monitoring and reporting and advising on compliance risk.

25. Basel Principles On Corporate Governance In Banks Principle : 10 The internal audit function should provide independent assurance to the board and should support board and senior management in promoting an effective governance process and the long-term soundness of the bank.

26. Basel Principles On Corporate Governance In Banks Principle : 11 The bank's remuneration structure should support sound corporate governance and risk management.

27. Basel Principles On Corporate Governance In Banks Principle : 12 The governance of the bank should be adequately transparent to its shareholders, depositors, other relevant stakeholders and market participants.

28. Basel Principles On Corporate Governance In Banks Principle : 13 Supervisors should provide guidance for and supervise corporate governance at banks, including through comprehensive evaluations and regular interaction with boards and senior management, should require improvement and remedial action as necessary, and should share information on corporate governance with other supervisors.

29. The key players • BANK REGULATORS AND SUPERVISORS • SHAREHOLDERS • BOARD OF DIRECTORS • EXECUTIVE MANAGEMENT • AUDIT COMMITTEE AND INTERNAL AUDITORS • EXTERNAL AUDITORS • PUBLIC /CONSUMERS

30. Corporate Governance Laws by BSEC No. BSEC/CMRRCD/2006-158/207/Admin/80:- Bangladesh Securities and Exchange Commission (hereinafter referred to as the “Commission”) deems it fit that the consent already accorded by the Commission, or deemed to have been accorded by it, or to be accorded by it in future, to the issue of capital by the companies listed with any stock exchange in Bangladesh, shall be subject to certain further conditions i.e., Corporate Governance Code order to enhance governance in the interest of investors and the capital market;

31. Corporate Governance Laws by BSEC(Cont.) Now, therefore, in exercise of the power conferred by section 2CC of the Securities and Exchange Ordinance, 1969 (XVII of 1969), the Commission hereby repeals its earlier Notification No. SEC/CMRRCD/2006-158/134/Admin/44, dated 07 August 2012, published in the official gazette on 30 August 2012 and the relevant Notification(s) on the same matter and, imposes the following further conditions, i.e., Corporate Governance Code to the consent already accorded by it, or deemed to have been accorded by it, or to be accorded by it in future, to the issue of capital by the companies listed with any stock exchange in Bangladesh: Provided, however, that these conditions or Code are imposed on ‘comply’ basis; the companies listed with any stock exchange in Bangladesh shall comply with these conditions or Code in accordance with the condition No. 9.

32. Codes of Corporate Governance Laws by BSEC 1. Board of Directors. (1) Size of the Board of Directors (2) Independent Directors (3) Qualification of Independent Director. (4) Duality of Chairperson of the Board of Directors and Managing Director or Chief Executive Officer. (5) The Directors’ Report to Shareholders (6) Meetings of the Board of Directors (7) Code of Conduct for the Chairperson, other Board members and Chief Executive Officer.

33. Codes of Corporate Governance Laws by BSEC(Cont.) 2. Governance of Board of Directors of Subsidiary Company 3. Managing Director (MD) or Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit and Compliance (HIAC) and Company Secretary (CS). (1) Appointment (2) Requirement to attend Board of Directors’ Meetings (3) Duties of Managing Director (MD) or Chief Executive Officer (CEO) and Chief Financial Officer (CFO) 4. Board of Directors’ Committee

34. Codes of Corporate Governance Laws by BSEC(Cont.) 5. Audit Committee. (1) Responsibility to the Board of Directors. (2) Constitution of the Audit Committee. (3) Chairperson of the Audit Committee. (4) Meeting of the Audit Committee. (5) Role of Audit Committee. (6) Reporting of the Audit Committee. (7) Reporting to the Shareholders and General Investors.

35. 6. Nomination and Remuneration Committee (NRC). (1) Responsibility to the Board of Directors (2) Constitution of the NRC (3) Chairperson of the NRC (4) Meeting of the NRC (5) Role of the NRC 7. External or Statutory Auditors. 8. Maintaining a website by the Company. 9. Reporting and Compliance of Corporate Governance. Codes of Corporate Governance Laws by BSEC(Cont.)

36. MD. ATAUR RAHMAN PRODHAN Managing Director & CEO Rupali bank Limited