Certain specific responsibilities have been delegated to Board Committees by the full BLME plc Board.
The BLME plc Board Committees operate within clearly defined terms of reference. Each Committee Chairman reports to the Board at the BLME plc Board Meetings which are held on at least a quarterly basis.
Board Risk Committee
The Board Risk Committee (“BRC”) is chaired by David Williams and comprises Sheikh Abdullah Jaber Al-Ahmed Al-Sabah, Frank Vermeulen, Neil Holden and Zeyad Al-Mukhaizeem.
BRC is responsible for the oversight of the risk profile of the Bank and for providing guidance, advice and recommendations to the Board on credit, market, liquidity, direct investment and operational risks with a view to re-enforcing a culture that encourages good stewardship of risk. Within this mandate it reviews risk levels in consideration of the Group’s overall risk appetite, market conditions and business strategy. It also overviews BLME’s Internal Capital Adequacy Assessment Process (“ICAAP”) and Individual Liquidity Adequacy Assessment (“ILAA”) and assesses the adequacy of stress testing and risk policy.
Ultimate responsibility for risk rests with the Board which, with advice and recommendations from BRC, approves the risk appetite for each major class of risk in line with BLME’s business model and strategic priorities and also approves the annual ICAAP and ILAA. Board Credit Committee (“BCC”) is a sub-committee of BRC established to review and agree decisions made by the Counterparty Credit Risk Committee (“CCRC”) that are outside of stated risk appetite and/or meet other escalation criteria.
The management of risk is delegated to the Chief Executive Officer who in turn delegates the day-to-day management of risk to the Executive Committee and, in particular, to the three committees of the Bank responsible for risk oversight (being ALCO, CCRC and Executive Risk Committee). The day-to-day independent oversight of risk is performed by the Bank’s Risk Department. This process is supported by Finance Department’s internal control role in monitoring adherence to risk limits, management action triggers and regulatory limits.
Board Remuneration Committee
The Remuneration Committee is chaired by Neil Holden and comprises Sheikh Abdullah Jaber Al-Ahmed Al-Sabah, Frank Vermeulen and as a non-voting member Zeyad Al Mukhaizeem.
The Remuneration Committee ensures that staff, management and executive compensation is appropriately aligned to business and individual performance, and is consistent with Shareholder interests and is in compliance with the FCA's Remuneration Code. It performs these duties within a framework that takes account of prevailing market conditions, best market practice and regulatory compensation guidelines. The Remuneration Committee has appointed Kepler Associates as a professional advisor. Kepler Associates is independent and has no connection with BLME.
Board Nominations Committee
The Nominations Committee is chaired by Neil Holden and comprises Frank Vermeulen and David Williams.
The Nominations Committee is responsible for matters relating to the composition of the Board, including the appointment of new Directors, and making recommendations to the Board as appropriate. The Committee is also responsible for overseeing the annual performance evaluation of the Board, its principal Committees and the Chairman.
The Nominations Committee identifies qualified candidates to be Directors, through a robust and prudent process, with the use of external consultants as necessary. All candidates must be approved by the PRA.
Board Audit Committee
The Audit Committee is chaired by Frank Vermeulen and comprises Sheikh Abdullah Jaber Al-Ahmed Al-Sabah, Neil Holden and Zeyad Al Mukhaizeem.
The Committee’s main responsibility is to review any reports from management, the internal auditor, and the external auditor regarding the accounts and the internal control systems implemented throughout the Group, along with consideration of both interim and annual accounts. It also makes recommendations to the Board on the appointment of the auditors and their audit fee.
The Board considers that the members of the Audit Committee possess recent and relevant financial experience. The Audit Committee has unrestricted access to the Company’s auditors. The external auditor, KPMG, provide non-audit services in addition to the provision of audit services. In the year ending 31 December 2014, non-audit services provided by KPMG comprised advice with regard to taxation and other miscellaneous services.
The Audit Committee is responsible for reviewing and monitoring the external auditor’s independence and objectivity and the effectiveness of the audit process.
The process through which the Committee assesses the auditor’s independence and objectivity each year includes the following:
- a review of non-audit services provided to the Group and related fees
- discussion with the auditors of any relationships with the Group and any other parties that could affect independence or the perception of independence
- a review of the auditor’s own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner
- obtaining written confirmation from the auditors that, in their professional judgement, they are independent