Corporate Governance

The Bank’s major Shareholders are the following: –

The Shareholders determine the remuneration of the Non-Executive Directors and provide equity to finance the business.

In 2017, the Shareholders passed a resolution to increase the shared capital of the Bank in furtherance of its decision to capitalise the Bank and commenced the initiatives to mobilise their respective contributions for the capitalisation.

The appointment of Directors is in line with the Bank’s Memorandum and Articles of Association and the Board Charter. Each of the appointments complied with the requirements of the Companies Act, and the Financial Institutions Act.

The Directors are appointed based on the expertise required on the Board in order to enable it execute its mandate effectively. In exercising its mandate, the Board of Directors acts collectively as a body to exercise oversee the strategic direction and operations of the Bank.

The Board is accountable to the Shareholders for the Governance of the Bank and provides regular updates on the performance of the Bank at the General Meetings.

As at December 31, 2017, the Board had ten (10) Directors, eight (8) of whom were Non-Executive Directors and two (2) Executive Directors supported by the Company Secretary.

The Board composition was as follows:

Mr. David G. Opiokello – Chairperson
Mr. Frank Katusiime – Deputy Chairperson
Ms. Sarah Walusimbi – Non-Executive Director
Ms. Jean Mutabazi Kasirye – Non-Executive Director
Mr. Patrick Ayota – Non-Executive Director
Ms. Geraldine Ssali – Non-Executive Director
Ms. Josephine N. Mukumbya – Non-Executive Director
Mr. Jim V. Mugunga – Non-Executive Director
Mr. Paul Omara – Non-Executive Director
Ms. Peace Ayebazibwe Kabunga – Executive Director
Mr. Michael K. Mugabi – Managing Director

The Board appointed two new Non-Executive Directors, Mr. Paul Omara and Mr. Jim V. Mugunga, during the year in order to enrich the skills mix and the Board Composition.

The Board’s mandate is set out in the Board Charter which is regularly reviewed in order to align it to Regulatory guidelines and best Corporate Governance practices. The key responsibilities are executed in line with a tool; an annual Board Work Plan set prior to the beginning of each financial year.

In 2017, the Board held the annual Strategic Plan retreat with the Management team, which considered the mid-term review of the Bank’s Strategic Plan 2015-2019. This was in addition to the Strategic updates considered by the Board every quarter.

The Non-Executive Directors also met separately to consider matters relating to the effective functioning of the Board.

The Board has four standing committees which handle different aspects of its delegated mandate. The Board Committees operate based on well defined and agreed mandates set out in their respective Terms of Reference, which are reviewed by the Board at least once annually in order to align them to Regulatory guidelines and best Corporate Governance practices.

All Board Committees are comprised of at least two Non-Executive Directors except for the Board Audit Committee, which is composed of Independent Non-Executive Directors. The composition of the Committees was reviewed in 2017 when the New Directors joined the Bank. The Committees were constituted as follows inline with the Financial Institutions Act;

1. Ms. Josephine N. Mukumbya – Chairperson
2. Mr. Paul Omara – Member
3. Ms. Sarah Walusimbi – Member

This Committee considers all matters relating to the integrity of the Bank’s financial reporting including policy formulation and review. It also considers the Bank’s financial performance against the financial projections and the activities of the Auditors of the Bank.

This Committee ensures that the Internal Audit function is structurally independent and free from undue influence by Management. It also conducts the annual performance appraisal of the Head, Internal Audit. In 2017, a quality assurance review of the Internal Audit Function was conducted by KPMG, Kenya.

1. Mr. Patrick Ayota – Chairperson
2. Mr. Frank Katusiime – Member
3. Ms. Josephine N. Mukumbya – Member
4. Mr. Jim V. Mugunga – Member
5. Mr. Michael K. Mugabi – Member

This Committee considers and reviews all matters relating to policy on the asset and liability management of the Bank. It also oversees the credit, liquidity, interest rate, and currency risk management. The committee provides oversight on the performance of the Bank in terms of profitability and efficiency, overall product delivery and pricing. It also considers facility applications within its approval mandate.

1. Ms. Geraldine Ssali – Chairperson
2. Mr. Patrick Ayota – Member
3. Mr. Paul Omara – Member

This Committee exercises oversight for the Bank’s Enterprise-wide risk, compliance and Anti-Money Laundering programs. It reviews risk management strategies, overall risk appetite and tolerance taking into account the current and projected economic, political and social operating environment. It also reviews Bank policies to assess the effectiveness of the Bank’s internal controls and risk management framework in order to achieve a prudential balance between risks and potential returns.

• Ms. Sarah Walusimbi – Chairperson
• Mr. Frank Katusiime – Member
• Ms. Geraldine Ssali – Member
• Mr. Jim V. Mugunga – Member
• Ms. Jean Mutabazi Kasirye – Member

This committee is responsible for all matters concerning the Organisational structure, Human Resource policies and the welfare of the Bank’s Human Resources. It is also responsible for recruitment, succession planning, remuneration and performance appraisal of Executive and Senior Management. The Committee also oversees the stakeholder engagement and Social Responsibility activities of the Bank.

Board and Board Committee meetings in 2017 In furtherance of its oversight function, the Board and its Committees meet at least once quarterly to consider matters relating to the performance and operations of the Bank.

Below is the summary of the Board and Board Committee meetings held during 2017:

The Directors bring to the Board skills, knowledge and experience from their respective fields. The New Directors received detailed orientation on the Bank’s operations and the business environment and their responsibilities as Directors. The Board has an annual training plan for continuous development of the Directors based on their training needs assessment. During the year, the Directors attended re-fresher training on the following topics:

1. Leadership program for Board the Chairperson.
2. Customer Centric Strategy: Design and Implementation
3. Effective Directorship.
4. The Future of Banking.
5. Board Audit Committee.

Board performance is key to the success of the Bank and the realisation of Shareholder value. Therefore, Board performance evaluation continues to be a channel through which the Board assesses its effectiveness in execution of its mandate. The Bank carried out a Board performance evaluation facilitated by the Institute of Corporate Governance (ICGU) the results of which were utilised to improve Board effectiveness and performance.

The Board is supported by a Company Secretary whose key roles and responsibilities are set out in the Board Charter. The Company Secretary plays a pivotal role in ensuring efficient functioning of the Board and smooth communication from the Board to Management, Shareholders and other relevant stakeholders. The Company Secretary also supports the Board in championing best practices in Corporate Governance. The Company Secretary is charged with ensuring that the Board remains cognisant of its duties and responsibilities.

The Company Secretary also has the responsibility of implementing the annual Board Work Plan and good Corporate Governance practices. The Company Secretary supported by a Secretariat team ensures that the General and Board meetings are well facilitated and that the Board of Directors receive accurate and timely information for effective decision making at each Board and Committee meeting. The Company Secretary also oversees the orientation/induction, evaluation, training and up-skilling of the Board of Directors.