This note on the Corporate Governance
practices set in place by the Bank, is as per the requirements of the Code of
Corporate Governance of the Capital Market Authority, Sultanate of Oman.
1. Corporate Governance Philosophy
Bank Muscat (SAOG) is committed to adopting the best global practices of
Corporate Governance and has adopted the Code of Corporate Governance as
required by the Central Bank of Oman and the Capital Market Authority. The
principles of Corporate Governance require the commitment of the Bank to
attaining a high level of transparency, accountability and business propriety,
with the ultimate objective of increasing long term shareholders value. This is
to ensure that the interests of all the stakeholders namely customers,
shareholders, employees and the community in which the Bank operates are
safeguarded.
2. Adoption of Corporate Governance
The following paragraphs briefly describe the implementation of the principles
of Corporate Governance at Bank Muscat:
2.1 The Board of Directors ('the Board')
Responsibilities of the Board |
| The responsibilities of the Board encompass the following: |
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Reviewing and monitoring the Bank's performance and effectiveness of the
management's policies and decisions. |
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Providing strategic direction to the Bank's Management with regard to
corporate policies and business strategies. |
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Reviewing the role and responsibility of the executive management and
approving the delegation of powers. |
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Safeguarding shareholders interests by ensuring that the Bank conducts its
business in a transparent and ethical manner. |
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Reviewing the observations contained in internal / statutory audit reports. |
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Constituting various Board Committees, nominating members, delegating powers
to such committees and reviewing the functioning of the Committees. |
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Approval of the Bank's interim and annual financial statements. |
2.2 Structure of the Board
Size and composition
The Board comprises of nine non-executive Directors who are elected by the
Shareholders.
Selection process
The criteria for a member of the Board includes character, background, judgement,
professional competence and experience as also industry specific knowledge and
familiarity with national, international and competitive issues facing the Bank.
The shareholders identify individuals qualified to become members of the Board
(including nominees) and recommend them for
election at the Annual General Meeting. The Board also reviews the appropriate
skills and characteristics required in the context of the perceived needs of the
Board and recommends suitable names to the shareholders for election at the
annual general meeting of shareholders. Following the election, the Chairman of
the Board extends an invitation to the elected candidate to join the Board. The
Board of Directors then elect by ballot from amongst the members of the Board, a
Chairman and Deputy Chairman.
Terms
Directors are elected for three year terms and are required to retire from the
Board on completion of their three-year term. However the Directors are eligible
for re-election to the Board on completion of their terms.
Independence
A Director is considered independent if he or she satisfies the requirements for
independence under the applicable regulatory standards. The selection criteria
of the Board ensures that the independence of the Board of Directors is not
compromised with a view to enable the Board to discharge its duties in the most
independent manner in the interest of the shareholders. The Board does not
involve itself in the routine functioning of the Bank.
Conflict of interest
A Director's business or personal relationships may give rise to a material
personal interest on a particular issue that conflicts or appears to conflict
with the interests of the Bank. Each Director is personally responsible for
identifying and reporting any actual or apparent conflict of interest to the
Board. A Director who has a material personal interest in a matter being
considered by the Board shall not be present when such matter is being
considered and shall not vote on the matter.
Equity Ownership
A member of the Board of Directors or the legal entity he represents is required
to own not less than five thousand of the Bank's shares which would remain
non-negotiable until the end of his membership and the approval of the annual
report of the last financial year in which the member performed his
duties.
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