corporate governance & business ethics guidelines
TRANSCRIPT
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CORPORATEGOVERNANCE
ANDBUSINESS
ETHICS
GUIDELINES
COPYRIGHTNOTICE
Copyright(2011)byFFAPrivateBanks.a.l.
POBox:901283
OneFFAGateMarfaa128Bldg.FochStreet
BeirutCentralDistrictLebanon
Allrightsreserved.ThismaterialisconfidentialandproprietarytoFFAPrivateBanks.a.l.andnopartofthismaterial
shouldbe reproduced,published inany formbyanymeans,electronicormechanical includingphotocopyorany
information storage or retrieval system nor should thematerial be disclosed to third partywithout the express
writtenauthorizationofFFAPrivateBanks.a.l.
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1.
GENERAL
PRINCIPALS
1.1. TheseCorporateGovernanceandBusinessEthicsGuidelines(Guidelines)setforththeguidingprinciplesandpoliciesthatgoverntheactivitiesoftheFFAPrivateBanks.a.l. (Bank)and itsserviceprovidersand
employees.TheBank iscommittedtomaintaininghighethicalstandardsandexpectsalldirectors,officers
and employees, by virtue of their association or employment with the Bank, to adhere to the highest
standardsofpersonalandprofessionalintegrityandtocomplywiththeseGuidelinesandallapplicablelaws,
rulesandregulationsinLebanon;
1.2. TheBankhasalegalresponsibilitytoprotectclientspersonalandfinancialinformationinaccordancewithBankingSecrecyLawofSeptember3,1956.Eachemployeeshallmaintainatalltimestheconfidentialityof
information acquired in the course of work except when authorized by the client or otherwise legally
obligated to disclose. Confidential information acquired in the course ofwork shall not beused by any
employee
for
any
personal
advantage.
The
Bank
will
strive
to
maintain
compliance
with
all
applicable
rules
andregulationsinLebanon;
1.3. Noemployeeshalltakeunfairadvantageofhis/herpositionthroughmanipulation,concealment,abuseofprivilegedinformation,misrepresentationoffacts,oranyotherunfairdealing.
1.4. TheBankshallprovideacopyoftheGuidelinestoanyclientorprospectiveclientuponrequest.
2. APPLICATIONOFTHEGUIDELINES2.1. Except where otherwise indicated in this document, the terms employee or employees include all
directors,officers,employeesandagentsoftheBank.
2.2. TheprovisionsoftheseGuidelinesapplytoallemployeesandserviceproviders.2.3. Failure to comply with these Guidelines could result in disciplinary action, including termination of
employment.
2.4. Allemployeesshallfulfilltheirobligationsinsuchamannerthattheyconductbusinessbyethical,fairandbestpractices.
3. POLICYSTATEMENT3.1. TheseGuidelinesexplainthebasicprinciplesofethicsandprofessionalbusinessconductfortheBankand
areintendedtoraiseethicalawareness,andasaguidetothedaytodaydecisions.Theycanalsobeusedin
trainingprogramsandtoassurecustomersoftheintegrityoftheBank.TheseGuidelinesareacodification
ofstandardsthatarereasonablydesignedtodeterwrongdoingandpromotethefollowingobjectives:
(1) honest,ethicalandprofessionalconduct, includingtheethicalhandlingofactualorapparentconflictsofinterestbetweenpersonalandprofessionalrelationships;
(2) full,fair,accurate,timelydisclosure;(3) compliancewithapplicableLebaneselaws,rulesandregulations;
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e EmpowertheSeniorManagementnotablyforthepurposeofsupervisingandcontrollingtheHeads
of
Departments
and
Units;
f SetguidelinesaimingatprotectingtheBankfrominsideandoutsideinterference;g ConstituteSpecializedCommittees.
(2) TheBoardmustdeterminetheBanksstrategicobjectivesandcorporatevalues,communicatethemtothestaff,andsupervisetheirimplementation:
a Ensure the preparation by the Senior Management of policies and procedures aiming atapplyingthestrategicgoalssetbytheBoard;
b Set policies to avoid any excess in lending executives andmain shareholders, and grantingprivileges
to
close
parties,
and
disclose
said
policies
according
to
article
152
of
the
Code
of
MoneyandCredit;
c BealerttoanyReputationRisktowhichtheBankmaybesubjectedto;d Grantsufficientprotectiontoemployeeshavingdisclosedany irregularitiestothecompetent
authoritiesattheBank.
(3) The Boardmust clearly define responsibilities and accountability rules, and impose them at all theBanks levels, by defining the prerogative sand responsibilities of the Board and that of the Senior
Management (i.e. the persons responsible for supervising the Banks daily business, such as the
ChairmanoftheBoard GeneralManager,theAssistantGeneralManagers,theheadsofmaindivisions
andtheofficersinchargeofthespecializedcommittees),whereastheSeniorManagementwillbeheld
responsibletowardstheBoardfortheBanksperformance.
(4) TheBoardmustensurethatSeniorManagementisfirmlysupervisingtheBank,inaccordancewiththeestablishedpolicy,by
a Ensuring the Senior Management is formed of qualified people capable of conducting theBanksdailybusiness;
b EnsuringtheSeniorManagementissettingefficientproceduresfor internalcontrol, includingwrittenpoliciesandprocedurescoveringallkindsofoperations;
c EnsuringthattheSeniorManagement is followinguponthe implementationofsaidpoliciesand
procedures;
d Ensuringthatnoimportantdecisionistakensolelybyanyperson.(5) TheBoardandSeniorManagementmustefficientlyusetheresultsreachedbythe InternalAuditand
theInternalControlBodies,notably:
a Followuptherectificationsoferrorsstated intheInternalAuditReport,withinthedeadlinessetinthisReport;
b ProtecttheindependenceoftheInternalAuditbypresentingitsReportsdirectlytotheBoard
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regulatoryrequirements,andachievecorporategovernancegoalsaspertheBankspractices.
(2) TheBoardofDirectorsshallmaintainpoliciestoattract,retain,developandmotivateexecutivesandemployees.TheBoard shalldevelopa cultureof fairlyevaluatingeffortand rewardingperformance,anddevelopandmaintain a
coherent,ethicalsystemofvaluesandincentivesforhumanresourcedevelopmentthroughouttheBank.
(3) TheBoardshallappointand, ifnecessarydismisstheChairmanandGeneralManager,andshalldeterminehis/herannualremuneration.
(4) DirectorsQualifications: Inorder tobe considered for theBoardsproposal to theOrdinaryGeneralAssembly, acandidateshould:
haveahistorythatindicatesthathe/sheiscommittedtohighethicalstandards; haveaclearsenseof thebalancebetweenthe legitimate interestsandconcernsofall theBanksshareholders in
takingdecisions,ratherthanadvancingtheinterestofoneparticularconstituent;
havethewillingnessand intellectualauthoritytochallengemanagement,whileworkingconstructivelyaspartofateaminanenvironmentoftrust;
bereadytodevotesufficienttimeandenergytodischarginghis/herdutyasdirector; haveskills,expertiseandknowledgethatcomplementthoseoftheexistingdirectors.(5) ThenewBoard,asacollectivebody,shouldpresentthefollowingprofile: knowledgeofthefinancialindustry,including,butnotlimitedto,individualsthathaveorhadleadershippositionsin
financialinstitutions;
business, governmental,nonprofit or professional experience, including individuals that serveor have served asChairman,CEOsor seniormanagers in largeorganizations,andhavea reputation thatdemonstrates theability t
makeimportantandsensitivejudgment;
adequate understanding of the Banks client universe, and of the geographic environment in which the Bankoperates;
internationalandregional(MENA)experience; financialexpertisetoprovideeffectiveoversightofadiversifiedfinancialservicesbusiness.(6) The Board should comprise an adequate number of board members and should be able to exercise objective
judgmentindependentofboththeviewsofexecutiveandofinappropriatepoliticalandpersonalinterest.Therefore,
theBoardshallbecomprisedofamajorityofqualifiednonexecutivememberswhoarecapableofexercisingsound
objectivejudgment.
(7) Directors Incompatibilities: The following professional affiliations are incompatible with the position of Boardmember:
anexecutive,boardmemberoremployeeoranyotheraffiliationthatimpliesadutyofloyaltytooneoftheBankscompetitor or any other institution the interests ofwhich might conflictwith the interests of the Banks or its
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shareholders;
aconsultantorexternaladvisoroftheBankorapartneroremployeeofafirmthatisconsultingoradvisingtheBank,includingitsexternalauditors.
(8) DirectorsElection: TheOrdinaryGeneralAssembly shall elect themembers of the Board, and grant the required authorizations in
accordance with the provisions of the Commercial Law. Said General Assembly shall vest this Board with the
necessarypowersinordertoundertaketheactivitiesthatwerenotvestedbyLaworbytheBylaws,andingeneral,it
shalldeterminetheauthoritiesgrantedtotheBoardofDirectors.
(9) DirectorsRevocation: TheOrdinaryGeneralAssemblymayatanytimerevoketheBoardMembers; ThereisnoagelimitforretirementforBoardMembers; AllexecutiveoremployeemembersoftheBoardshouldresignupontheirretirementordeparturefromtheBankor
theGroup.
9. THEBOARDOFDIRECTORSA BoardsInternalRegulations
(1)CompositionandPeriod
1.1 TheManagementoftheBankshallbeentrustedtoaBoardofDirectors,composedofnolessthanthreemembers,andnomorethantwelvemembers,electedbythe
Ordinary General Assembly. Such Assembly may at any time revoke the Board
Members.
1.2 TheBoardofDirectors shallconsistofanumberofDirectorswithamajorityofLebanesenationals.
1.3 Members of theBoard ofDirectors are elected for amaximum period of threeyears;byoneyear it isunderstoodtheperiodelapsingbetweenthemeetingsof
two consecutive Annual Ordinary Assemblies; they may be reelected
consecutively.
1.4 If, in the intervening period between two Annual Meetings, the number ofmembers in office drops below three by death or resignation, or for any other
reason,theremainingBoardMembersmustconveneaGeneralAssemblywithina
maximumperiodoftwomonths,inordertofillthevacantposts.
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1.5 All companies which are Shareholders in the Bank shall have the right to bemembers
of
the
Board
of
Directors,
and
shall
be
represented
in
the
Board
by
a
personvestedforthispurpose,whoisnotrequiredtobepersonallyaShareholder
in the present corporation. Such companies have absolute authority to replace
theirrepresentativesduringtheperformanceoftheirtermanddutiesintheBoard
ofDirectors.
1.6 Nonemaybecalledtodirectorshipifhe/shehasbeendeclaredbankruptandhasnotbeenrehabilitatedoverthelasttenyearsat least,orconvicted inLebanonor
abroadwithin the last demeanor involving an act or attempt of forgery, theft,
fraud
or
breach
of
trust,
or
a
misdemeanor
subject
to
penalties
for
fraud,
embezzlement of funds or securities, or for issuing in bad faith checkswithout
provision,orforattemptingtocausedamagetothefinancialpositionofthestate
orforhidingchattelsobtainedthroughsuchoffenses.Thesameconditionsapply
totherepresentativesofcorporatebodiesontheBoardofDirector.
1.7 NomembermaybeamemberofmorethansixBoardsofDirectorsofJointStockcompanies having their principal office in Lebanon. Any Director of more than
seventyyearsofagemaynotbeaDirectorinmorethantwocompanies.
1.8 Themembersof theBoardmaynot takepart inthemanagementofaLebaneseBankhavingsimilarobjectstotheBank,unlesstheyobtainanauthorizationinthis
regard,whichmustberenewedeachyear.
(2) QualifiedShares
2.1EachmemberoftheBoardofDirectorsmustatleastholdOneHundredSharesthroughoutthe
duration of his term. Such Shares are not negotiable to secure the individual and collective
liabilityoftheDirectorsforallactsofmismanagementofwhichtheymightbeliable.
2.2Such
Shares
will
not
be
returned
to
the
Director
until
he
has
duly
obtained
afinal
discharge
from
theGeneralAssemblyapprovingtheaccounts.
(3) CallingofDirectorstoMeetings
3.1TheBoardofDirectorsshallmeetattheBanksHeadOfficeor inanyotherplace inLebanonor
abroaduponthecalloftheChairmanastheinterestoftheBankrequires.
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3.2The
notice
of
the
meeting
shall
be
addressed
by
letter
with
acknowledgment
of
receipt
or
fax
or
by telexor telegram registeredwithanotice receiptorbypublishing in two localnewspapers
accompaniedbytheAgendaoneweekatleastbeforethedateoftheproposedMeeting.
3.3WhenthenoticecannotbecommunicatedpersonallytoaDirector,anynotificationtothiseffect
made to any person of age in his actual or elected domicile shall be considered valid and
sufficient.
(4)Quorum
and
Voting
4.1All debates of the Board shall be considered as valid if themembers of the Board present or
representedinsuchMeetingrepresentatleastthemajorityoftheBoardofDirectorsMembers.
Anymembermaydelegateanyofhis colleagues to representhimandvoteonhis/herbehalf
providedthateachmembercanonlyrepresentoneothermember.
4.2The resolutionsof theBoardareadoptedbyamajorityof thevotesof themembersDirectors,
attendingorrepresented.Ifthenumberofvotesisequal,thevoteoftheChairmanshallprevail.
(5) AuthorityoftheBoard
5.1ThescopeofauthoritiesoftheBoardofDirectorsshallbedeterminedbytheGeneralAssembly.
5.2 The Board may vest the Chairman and/or the General Manager with part of its authorities
accordingtoArticle157oftheCommercialCode.
5.3Any
Agreement
reached
between
the
Bank
and
aDirector
is
subject
to
the
prior
approval
of
the
GeneralAssembly,whethersuchAgreementistransacteddirectly,indirectlyorthroughamiddle
person.ActscoveringoperationsbetweentheBankanditscustomersareexemptedfromthese
provisions.
5.4Equally subject to theaforesaidauthorization isany transactionpassedbetween theBankand
any other corporation inwhich one of the BankDirectors is an owner, an active or ordinary
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partner,aManageroraBoardmember.AnymemberoftheBoardwhomaybeinoneofthese
casesis
required
to
advise
the
Board
of
Directors
accordingly.
5.5TheBoardofDirectorsand theauditorsshallsubmitseparately totheGeneralAssemblya
reportonthetransactionstobeconcluded,andtheGeneralAssemblyshalltake itsdecision in
lightofthesetworeports.Authorizationmustberenewedeveryyearifitconcernstransactions
involvinglongtermconsecutivecommitments.
(6) ObligationsoftheBoardThe
Board
of
Directors
is
required
to:
1 AscertainthattheBankhasbeendulyestablishedsuchtasktobeconductedbythefirstBoardofDirectors;
2 Accomplishallthelegalformalitiesrequiredforthepublicationandfortheregistrationwiththecourtregister,aswellastheCommercialRegister.
3 CarryouttheresolutionspassedbytheGeneralAssembly.4 Establish at the end of the semester of each financial year a summary statement
regardingtheCompanyssituationwithallitsliabilities,assetsandreceivables.
5 Establish,attheendofeachfinancialyear,theinventory,thebalancesheet,theprofitsandlossesstatement,aswellasallreportsrequiredbyLaw.
6 ConvenetheShareholdersGeneralAssembly.7 Setupthelegalandotherreserves.
(7) ResponsibilitiesoftheMembersoftheBoard
Themembersof theBoardofDirectorsare responsibleeven towards thirdparties forall
fraudulentactsandallinfringementsoftheLawortheseArticlesofAssociation.Membersof
theBoard
are
also
responsible
towards
the
shareholders
for
their
management
mistakes.
The Bank is entitled to bring an action against the members of the Board for their
managementfaults.Failingtodoso,anyShareholdershallbeentitledtoactonbehalfofthe
Bankproratatohisequityinterest.
Article170oftheCommercialCodeshallbeappliedwithrespecttotheapportionmentof
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responsibilitiesamongsuchmembersoramongpartofthem.
ConflictofinterestmayariseasaresultofthevariousactivitiesandrolesoftheBankandits
variousstakeholders.TheBoardshouldensurethatpoliciesto identifypotentialconflictof
interestaredeveloped and implemented and, if these conflicts cannotbeprevented,are
appropriatelymanaged.
TheBoardshouldensurethatappropriatepublicdisclosure(intheBanksannualreport) is
made, and/or information is provided to supervisors, relating to the Banks policies on
conflictofinterestandpotentialconflictofinterest.
(8) ResolutionsoftheBoard8.1 The resolutions of the Board of Directors shall be recorded in minutes in a special
register.
8.2 Thesaidminutesmaybeusedasprooftowardsthirdparties.
8.3TheChairmanoftheBoardofDirectors,andinhisabsence,theGeneralManager,shall
certify extracts drawn from the said minutes intended to be produced in Courts or
beforePublicandPrivateAdministrationsoranypersonwhomsoever.
(9) ChairmanoftheBoard,ViceChairman,GeneralManagerandDelegatedBoardMembers9.1 The Chairman is elected among themembers of the Board for a period of time not
exceedingthedurationofhisoffice intheBoard;theChairmanmustbeamemberof
the Board in his personal capacity and not as representative of a corporation. The
Chairmanselectionmayberenewedconsecutively.
9.2TheChairman isnotentitledtobeaChairman inmorethan fourLebanesejointstock
companies provided that he appoints a General Manager for two out of the four
companies.
9.3 If necessary, the Board may elect a Vice Chairman, and in case of absence of the
ChairmanandanappointedViceChairman, theDirectorsmayelect foreachMeeting
oneofthememberstochairtheMeeting.
9.4TheChairman shallactasGeneralManagerof theBank,andmay recommend to the
BoardtheappointmentofanAssistantGeneralManagertoactonhisbehalfandathis
personalliability.
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9.5IftheChairmanistemporarilyunabletocarryouthisduties,hemayappointoneofthe
Directorsto
perform
all
or
part
of
such
duties,
provided
that
such
appointment
is
for
a
limitedperiodoftime.9.6IncasetheChairmanbecomespermanentlyunabletoperformhisduties,theBoardof
Directorsshallconsiderhimtohaveresigned,andshallelectanotherChairman.
9.7 The Boardmay appoint a Secretarywhomay not be aDirector, for a period not to
exceedthemandateoftheBoardofDirectors.
(10)AuthoritiesoftheChairmanoftheBoardThe
Chairman
of
the
Board
of
Directors
shall
represent
the
Bank
towards
third
parties
and
shall implementtheBoardresolutionsandexercisesuchauthoritiesasmaybedetermined
bytheBoardandunderitssupervision.HeshouldensurethatBoarddecisionsaretakenona
soundandwell informedbasisand thatdissenting views canbeexpressedanddiscussed
withinthedecisionmakingprocess.
B SpecializedCommitteesThe Bank must submit its decisions related to facilities and placements of its available funds, real estate
investments,participationsandoperations for itsownaccountonstructuredproductsandderivatives, to the
priorapproval
of
specialized
committees
created
and
operating
according
to
the
rules
set
by
the
Board
of
Directors.
ThefollowingCommitteeshavebeenconstitutedinthisrespectandtheirChartersdulyapprovedbytheBoard:
a BoardRiskManagementCommittee;b CreditCommittee;c AssetLiabilityandRiskManagementCommittee;d InvestmentandParticipationCommittee;e AntiMoneyLaunderingandComplianceCommittee;f InformationSecurityandManagementInformationSecurityCommittee;g AuditCommittee;h SubsidiariesControlCommittee.
TheChairmanandmembersoftheCommitteesaretobeelectedbytheBoardofDirectors.
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TheBoardmayestablishadditionalCommitteesasnecessaryandappropriate.
10. CORPORATEGOVERNANCEINTHEGROUPIn theGroupstructure, theBoardof theBank,being theparentcompany,has theoverall responsibility foradequate
corporategovernanceacrosstheGroupandensuringthattherearegovernancepoliciesandmechanismsappropriatefor
thestructure,businessandrisksoftheGroupanditsentities.
TheBoardoftheBankshouldexerciseadequateoversightoversubsidiaries,whilerespectingtheindependentlegaland
governanceresponsibilitiesthatmightapplytoregulatedsubsidiariesboards.Inparticular,itshould:
a Establishanadaptedgovernancestructurewhichcontributestotheeffectiveoversightofsubsidiaries;b EnsurethatenoughresourcesareavailableforeachsubsidiarytomeetbothGroupstandardsandlocal
governancestandards;
c Have appropriate means to monitor that each subsidiary complies with all applicable governancerequirements.
11. THESENIORMANAGEMENT4.1AppointmentofDirectorsinManagerialPosts
Directorsmay
assume
managerial
posts
in
the
Bank,
against
remuneration
to
be
fixed
by
the
Board ofDirectors.However, suchDirectors shall not benefit from the provisions of the
LaborLawsunlesstheyshallhavebeenemployedbytheBankforatleasttwoyearsbefore
theirelectionasDirectors.
The Chairman may recommend to the Board the appointment of an Assistant General
Manager to act on his behalf and at his personal liability, and shall determine his/her
prerogativesbyvirtueofinternalcirculartobenotifiedasneeded.
4.2SeniorManagement
SeniorManagement isresponsibleandshouldbeheldaccountableforoverseeingtheday
todaymanagementof theBank.These individuals shouldhave thenecessaryexperience,
competenciesandintegritytomanagethebusinessesundertheirsupervisionaswellashave
appropriatecontroloverthekeyindividualsintheseareas.
SeniorManagement contributes substantially to the Banks sound corporate governance
throughpersonalconductby:
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a Providingadequateoversightofthosetheymanage;b Ensuring that the Banks activities are consistent with the business strategy, risk
tolerance/appetiteandpoliciesapprovedbytheBoard.
SeniorManagement isresponsible fordelegatingdutiestothestaffandshouldestablisha
managementstructurethatpromotesaccountability.
SeniorManagementshouldremainawareof itsobligationstooverseetheexerciseofsuch
delegatedresponsibilityand itsultimateresponsibilitytotheBoardfortheperformanceof
theBank.
Senior
Management
should
implement
appropriate
systems
for
managing
the
risks
both
financialandnonfinancial towhich theBoard isexposed.This includesacomprehensive
and independent riskmanagement function and an effective system of internal controls
designed and operated to ensure adherence to the Banks strategy and risk
tolerance/appetite.
4.2SpecializedCommittees
a BOARDRISKMANAGEMENTCOMMITTEE
Mission&Scope:TheBoardRiskManagementCommittee (BRMC)shallbecomposedofnot fewer
thanthree
non
executive
Directors,
each
of
whom
shall
be
totally
independent
and
appointed
from
amongstthenonexecutiveoftheBankforaperiodof3years.Itsmission istoReviewandmanage
risk issuesandpolicies,ensure that theBanks riskpoliciesarecompliedwithandproceduresare
being consistently applied in all locations, consider and propose changes to existing risk related
policies/proceduresasandwhenappropriate.TheBRMCreviewsreportsand findings identifiedby
theRiskManagementDepartmentandasset liabilitymanagement,includingthedifferentrisk limits
that are recommended for ultimate approval by the Board, and reviews strategy set by ALCO to
manageliquidityandinterestraterisksinbusinessasusualscenariosandunderstresstesting.
ThekeyresponsibilitiesoftheBRMCareto:
1. AssessriskstrategyandensurethatitisalignedwiththeBank'soverallobjectives.2. Oversee the implementation of the business plans/portfolio strategies and set accordingly the
prudentiallimits/ceilings:
a. Maximumexposuretoanindividualcounterpartyb. Maximumexposuretoanindustryc. Maximumexposuretoonesecurityd. Geographicaldiversificatione. Sovereign/countryrisklimit
3. OverviewthedelegationofcreditapprovalauthoritiesbytheCreditCommittee.4. Approve, and oversee the implementation of a firmwide operational risk framework to explicitly
manage each and every source of operational risk as a distinct risk to the banks safety and
soundness,including:
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a. Technology risk: technological failure, programming errors, deteriorating systems,contingency
planning.
b. Employeerisk:humanerror,internalfraud,confidentialitybreach.c. Customerrisk:clientdissatisfaction,contractualdisagreement.d. Capitalassetrisk:safety,security,fire/flood,insurancecoverage.e. Externalrisk:externalfraud,legalrisk,collapseofmarkets,war.f. HR risk: Hiring practices, Compensations and bonuses regulations, workplace safety,
diversityanddiscrimination.
The framework includes an appropriatedefinitionofoperational risk, policiesoutlining thebanks
approachtomanagingoperationalrisk,andclear linesofmanagementresponsibility,accountability
andreporting.
5. Review theBank'spractices and ensure that riskpolicies are efficient, appropriate, and arebeingcompliedwith.
6. Ensure that the Bank is always in conformity with the Basel requirements concerning riskmeasurement
and
management.
7. Review the comments issuedby the Banking ControlCommission that relate to risk;oversee andmonitormanagementsresponsethereto;andreportasnecessarytotheAuditCommitteeandthe
BoardofDirectorsconcerningtheresultsofsuchexaminationsandtheprogressofmanagement in
implementinganycorrectiveaction.
8. ReviewtheresultsofinternalauditsthatrelatetoriskasdefinedbytheBank;overseeandmonitormanagementsresponsethereto;andreportasnecessarytotheAuditCommitteeandtheBoardof
Directorsconcerningtheresultsofsuchauditsandtheprogressofmanagementinimplementingany
correctiveaction.
9. Reviewtheannualexternalauditreports.10. Manage and control Reputation risk by overseeing how the management deals with negative
publicityabouttheBank,relatedmostlytocasesofmoneylaunderingandbadcustomerserviceand
whichmayhavepotentialimpactontheBanksearningsandmarketshares.
11. OverseetheworkoftheAMLCC,CreditCommitteeandALCO,byreviewingreportspreparedbysaidcommittees.
bCREDITCOMMITTEE
Mission&Scope:TheCreditCommittee(CC)isthehighestcreditauthorityinthebank.Itsmissionis
toreviewandapprovecreditproposals,settherulesandguidelinesofMarginAccountsandreview
theapplicationofsuchrulesandguidelines.
TheCCscreditlimitsshouldnotexceedtheBanksregulations,authorizedlendinglimitsandcomply
withlocalandinternationallawsandregulations.
ThekeyresponsibilitiesoftheCCareto:
ApprovecreditproposalsrecommendedbydivisionsoftheBank SettherulesapplicabletoMarginAccounts,advancesonsecurities,andotherengagementsor
risksrelatedtoClientstransactionsonSecuritiesorotherfinancialInstruments.
Preparemonthly reports of the credits granted to clients, and submit them to the Board ofDirectorsevery6monthsincludingMarginaccountsandClientsMarketEngagementsandRisks.
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Approvedecisionsby theChairman GeneralManager tograntcredits individually.Otherwise,said
matters
will
be
submitted
to
the
BOD.
ProvidetheBoardofDirectorsperiodicallywithitsrecommendationsconcerningtheinvestmentdecisionswhichvalueexceeds1%oftheBanksprincipalnetassetsortheamountofonemillion
AmericanDollars,whicheverisless,foreachinvestmentproposal.
TheCCscreditlimitwillnotexceedtheBanksregulatorylendinglimit.
c ASSETLIABILITYANDRISKMANAGEMENTCOMMITTEE
Mission
&
Scope:
Monitorthecompliancewithapprovedregulatoryratios(capitaladequacyandliquidity)
Reviewandmanagethefollowingissues:
Liquidity,FX,Market,andinterestratesrisks
Counterpartyrisk
AssetLiabilityManagementriskLitigationRiskandPolicies
OtherReputationrisk
Considerandproposechangestoexistingriskrelatedpolicies/proceduresasandwhenappropriate.
ActastheplatformwhereissuesrelatedtotheimplementationofBasel2projectswillbediscussed
andfollowedupthroughthefeedbackfromrelatedsteeringcommittees
ThekeyresponsibilitiesoftheCommitteeareto:
ManagetheLiquidityPosition:
LiquidityratioistobeagreedupononCommitteemeetings.
TheobjectiveoftheCommittee istohavesufficient fundsonhandtomeettheBanksobligations.
Obligationsincludemainlyrunoffondepositsandliabilitiesandincreasesinloandemands.
Manage
the
interest
rates
position:
TheobjectiveoftheCommitteeistoreducetheriskofadecrease intheBanksnet interestmargin
andtheriskofadecreaseinthemarketvalueofequityinavolatileinterestrateenvironment.
ManageMarketRisk:
TheobjectiveoftheCommitteeistominimizetheriskofalossinon andoffbalancesheetpositions
that the bankmay experience as a result of unfavorablemovements inmarket prices. Themain
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exposuretomarketriskintheBankisinthefixedincomesecuritiesportfolio,theequityinvestment
portfolioand
the
foreign
exchange
exposures.
Oversee the implementationand approve theproprietary tradingand investment strategiesand
proceduresandfixaccordinglytheprudentiallimits/ceilingregardingmarketrisk:
Maximumexposuretoanassetclass
Maximumexposuretoanindustry
Maximumexposuretoonesecurity
Geographicaldiversification
Sovereign/country
risk
limit
Manageandcontrolvariousriskssuchas:
Reputationrisk:overseehowthemanagementdealswithnegativepublicityabouttheBank,related
mostlytocasesofmoneylaunderingandbadcustomerserviceandwhichmayhavepotentialimpact
ontheBanksearningsandmarketshares.
Litigationrisk:overseehowthemanagementdealswithclientcomplaintsandassessrelatedrisk.
Oversee,manageandcontrol risks related toAsset/liabilityManagementandensurecompliance
withthegeneralprincipleofmatchingbetweenmaturitiesofassetsandliabilities.
d INVESTMENTANDPARTICIPATIONCOMMITTEE
Mission&Scope:ThemissionoftheInvestmentandParticipationCommittee(IPC)istoapprove
specific investment decisions in real estate and participations in Financial or nonFinancial
Companies.
TheIPCskeyresponsibilitiesareto:
Defineinvestmentneedssuchasnature,specifications,terms. SetupastrategywhichguaranteestheBankwillnotbesubjecttorisksitcannotbearas
aresultoftheinvestmentdecisionsortheirconsequences.
Assessthefeasibilitystudyofproposed investment intermsoftheirfuturereturn,andsubjecttheBanktoStressTestingScenariosinordertomeasureitscapacitytobearthe
changesintheRiskfactors andtheirimpactontheBanksfinancialstatus.
ProvidetheBoardofDirectorsperiodicallywithitsapprovalconcerningtheinvestment
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decisionswhichvalueexceeds1%of theBanksprincipalnetassetsor theamountof
onemillion
American
Dollars,
whichever
is
less,
for
each
investment
proposal.
Studythecreditrisksthebankmayencounterandsetceilingsandrestraintsensuringthe balanced distribution and diversification of these risks, notably concerning the
EconomicalSectorsandregions.
e ANTIMONEYLAUNDERINGANDCOMPLIANCECOMMITTEE
Mission & Scope: The Compliance Committee (AMLCC) is established based on the
recommendationsoftheBDLdecisionnumber7818datedMay18,2001(Chapter4,article10),
and
its
addenda.
The
mission
of
the
committee
is
to
ensure
that
the
Bank
is
in
compliance
with
antimoney laundering laws (mainlyLawNumber318datedApril20,2001)andtoensurethat
the internal antimoney laundering procedure (KYC policy) is comprehensive, clear and is
followedbyallBankstaff.Thecommitteewillbecopiedandwillreviewallreportsmadebythe
Compliance Officer. The committee will also decide on whether to report any suspicious
customer to the Special Investigation Commission brought forward to its attention by the
Compliance Officer or the Internal AuditUnit. Anymatter not resolved by the committee is
escalatedtotheChairmanoftheBoard.
Thecommitteeisconcernedwithallreportsissuedbyanyofthefollowing:
ComplianceOfficer SpecialInvestigationCommission InternalAuditreportsonantimoneylaundering ExternalAuditorsreportsonthesubjectmatter
TheAMLCCs keyresponsibilitiesareto:
Draft the Bank procedures for fighting Money Laundering and any changes madethereon(namelyKYCProcedure)andensuring itscompliancewith local legislationand
regulations.
EnsurethattheKnowYourCustomer(KYC)policyadherestominimumstandardsonobtainingnecessaryinformationoncustomersprofile.
Ensure that the antimoney laundering policies and procedures are comprehensive,completeandeffective.
Ensure that proper and effective controls are applied to prevent and detectMoneyLaunderingoperations.
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projectswheresecurityissensitive.
SetInformationSecurityandInformationSystemspriorities Set Information security and Information Systems direction and strategy and drive
policies
Provide resources to information security and information systems efforts as perprioritiesandneeds
Supportchangeanddefineculturalvaluesrelatedtoriskawareness. EnsureallSecurityissuesraisedbyinternalandexternalauditorsarecarefullyaddressed Require monitoring and metrics to ensure the effectiveness and the efficiency of
Information
Security
and
Information
Systems
investments
Ensurethatsecurityisconsideredanintegralpartofallbusinesssolutionsdevelopment.
gAUDITCOMMITTEE
Mission&Scope:
OverseeingtheAuditfunction; FacilitatetheeffectivesurveillancebytheBoardofDirectorsofthe implementationof
thegeneralstrategyasdefinedbythelatter;
AssisttheBoardofDirectorsintheoversightof:TheintegrityoftheBanksfinancialstatements
ThesafeguardoftheassetsandincomeoftheBank
Theexternalauditorsqualificationsandindependence
TheperformanceoftheBanksinternalauditfunctionandexternalauditor
Thecompliancewith theBanksethicalstandards,policies,plansandprocedures,and
withapplicablelawsandregulations.
EncouragethecommunicationbetweentheDirectors,theInternalAudit,theStatutoryAuditorsandtheLebaneseBankingControlCommissionmembers;
SubmitareportonthetasksaccomplishedtotheBoardofDirectorsonceayearatthemeetingofthelatterprecedingtheAnnualGeneralMeetingoftheshareholders,which
approvestheFinancialStatementsfortheprecedingyear.
Review internal control regulations and procedures, including procedures relating tofightingmoney launderingandterroristfinancing, inordertoascertaintheirefficiency
andeffectiveness.
Discuss the main financial and administrative reports prepared by the Senior
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Management, the Internal AuditUnit (IAU), the auditors, or the control authorities,
aboutany
weakness
in
the
internal
control
regulations
and
procedures.
Coordinateworkbetweenthe IAUandtheauditors,particularlywheneachofthem isreviewingtheseregulationsandprocedures.
TheAuditCommittees keyresponsibilitiesareto:
Directlyoversee the IAU toascertain its independence from the SeniorManagementandtheobjectiveperformanceofitstasks.
ApprovetheIAUsremunerations.
Propose
the
IAUs
Chiefs
appointment
or
dismissal.
MeetonaquarterlybasisandwhennecessarywiththeIAUsChieftodiscusstheUnitsactivities,andalsoonceayear,at least,withouttheattendanceofanymemberofthe
SeniorManagement.
ApprovetheIAUsManualofProceduresand,whennecessary,proposeitsamendment,inadditiontoensureallthehumanandmaterialresourcesneededforitsapplication.
ReviewalltheUnitsreports. Give its opinion about any agreement the bank would like to conclude with any
specialized institution for performing all internal control tasks (outsourcing) or part
thereof(cosourcing).
TheAuditCommitteeshallalso:
Giveitsopinionaboutauditorsbeforetheirappointment,anddeterminetheconditionsoftheirappointmentincludingtheirannualremuneration.
Evaluatetheauditorsperformance,independenceandobjectivity. Discuss with the Management and the auditors the financial statements to be
published.
Discussthemainsremarksandrecommendationsincluded intheauditorsreportsandreportthemtotheBoardofDirectors.
Meetwiththeauditorsonceayearat leastandwhenevernecessarytoenquireabouttheiractivitiesanddiscusstheresultsoftheirassignments.
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hSUBSIDIARIESCONTROLCOMMITTEE
Mission & Scope:Pursuant to BDL Basic Circular 110 dated August 16, 2007, a Subsidiaries Control
Committee (SCC)shallbeestablished to followup,monitorandcontrol the statusandactivitiesof the
Bankssubsidiaries,the latterbeingbranchesabroad,affiliatedbanksof financial institutionsabroad, in
whichFFAPrivateBankholds,directlyor indirectly,aminimumof40%of the voting rights,orwhose
managementiseffectivelycontrolledbyFFAPrivateBank,regardlessofthelattersstake.
TheSCCs keyresponsibilitiesareto:
1. Examine the reports, financial statements and documents submitted by the subsidiaries, and toexpressopinionsaboutthem;
2. Askforclarificationsandadditionalinformation;3.
Require
from
subsidiaries
the
taking
of
remedial
measures,
and
verify
the
implementation
of
these
measures;
4. Propose,whenneeded,thesendingofateam tosubsidiaries forthepurposeofonsitediscussionandassessmentoftheirstrategy,performance, resultsandrisks;
5. Provide the Banks Board of Directorswith summaries of its minutes of meetings, andwith thequarterlyreport(businessletter)submittedbyeachsubsidiary.
12. THEINDEPENDENTCONTROLFUNCTIONS12.1. INTERNALAUDIT
Thescopeof theworkof the InternalAuditUnit shall includeallprograms,activities,
group divisions, and departments administered by the Bank. The Internal AuditUnit
shall determine whether the Banks networks of risk management, control and
governanceprocessesareadequateandfunctioninginamannertoacknowledgethat:
Risksareappropriatelyidentified,quantifiedandtheirimpactassessed; Riskmanagementsystemsandproceduresarereliableandintegral; The Bank is complying with risk policies in terms of reviewing and assessing credit,
market,andoperationalrisks;
Appropriate policies and procedures have been developed tomanage the identifiedrisks;
TheBanksandclientsassetsaresafeguarded; Properduediligenceisconductedonsubcustodiansandcorrespondents; Interactionwiththevariousgovernancegroupsoccursasrequired; Significant financial,managerial, and operating information is accurate, reliable, and
timely;
Activitiesare incompliancewithpolicies,standards,proceduresandapplicableBDL&
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TheBanksArticlesofAssociation.
Report&AccountsCoordinatingthepublicationanddistributionoftheBanksannualreportandaccounts
and interimstatements, inconsultationwiththeBanks internalandexternaladvisers,
inparticular,whenpreparingthedirectorsreport.
ShareRegistrationMaintaining the Banks register of shareholders; dealing with transfers and other
matters
affecting
share
holdings;
dealing
with
queries
and
requests
from
shareholders.
ShareholderCommunicationsCommunicating with the shareholders (e.g. through circulars); arranging payment of
dividendsandinterest;maintaininggoodgeneralshareholderrelations.
CorporateGovernanceContinually reviewing developments in corporate governance; facilitating the proper
inductionofdirectorsintotheirrole;advisingandassistingthedirectorswithrespectto
theirdutiesandresponsibilities,inparticularcompliancewithCompanyLawandCentral
BankofLebanonrequirements.
CompanySealEnsuringthesafecustodyandproperuseoftheBanksseals.
SubsidiaryCompaniesEnsuring that procedures are in place for the correct administration of subsidiary
companiesand
that
correct
information
is
given
to
the
holding
company;
maintaining
a
recordofthegroupsstructure.
GeneralComplianceMonitoring and laying in place procedureswhich allow for compliancewith relevant
regulatoryand legal requirements; retaining theminimumsetof records required for
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(8) Undertakeriskassessmenttakingintoconsideration/eventLikelihoodandtheirimpact,and
Event
Interdependencies;
(9) UndertakeRiskMeasurement(ScenarioAnalysisandStressTesting)(10)ImplementthedelegationofcreditapprovalauthoritiesbytheCreditCommittee.(11)Ensurethatcreditriskpoliciesarebeingcompliedwith.(12)Ensure that theBank isalways in conformitywith theBasle requirementsconcerning
creditriskmeasurementandmanagement.
(13)Assess regularly the overall composition of the loan portfolios and the economicenvironmentascreditriskisaffectedbychangesineconomicconditions.
(14)Manage
and
control
various
risks
such
as
reputation
risk.
TheBoardandSeniorManagementpromoteacultureofriskawarenessandriskmanagementwithinthe
Bank.
The risk management function is independent of the business units whose activity and exposures it
reviews.
WhilereportingtotheChairman CEO,theChiefRiskOfficer (CRO)hasregularaccesstotheBoardand
theBoardRiskManagementCommittee.
TheBoardandtheBankingControlCommissionaretobeinformedofthedismissaloftheCRO,andofthe
reasonsofsuchdismissal.
13. COMPENSATION
Compensation systems contribute to the Banks performance and risktaking, and are therefore a key
component of the Banks governance and riskmanagement. The overall design and operation of the
compensation system does not include determining compensation for individual employees; the
compensationpolicyisdevelopedfortheBankasawhole.
Becausecompensationshouldbealignedwithrisk,anunderstandingoftheBanksriskmeasurementand
management,and
of
how
different
compensation
practices
can
impact
the
Banks
risk
profile,
is
important. Incentivesarisingfromcompensationsareevaluated,andanannualcompensationreview is
undertakenbySeniorManagement.
In addition, Senior Management monitors and reviews outcomes of the established compensation
system, toensure the latter isoperationas intended.Forexample,SeniorManagement shouldensure
thatlowerriskadjustedincomeinabusinesslinewillresultinlowercompensation.
Thecompensationofthecontrolfunctionsshouldbestructuredinawaythatisbasedprincipallyonthe
achievementoftheirobjectivesanddoesnotcompromisetheir independence(i.e.compensation isnot
substantiallytiedtobusinesslinerevenue).
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COMPENSATIONALIGNMENTWITHRISKTAKINGa Anemployeescompensationshouldbeeffectivelyalignedwithprudentrisktaking;b Compensationshouldbeadjustedforalltypesofrisk;c Compensationoutcomesshouldbesymmetricwithriskoutcomes;d Compensationpayoutschedulesshouldbesensitivetothetimehorizonsofrisks;e Themixofcash,equityandotherformsofcompensationshouldbeconsistentwithrisk
alignment.
Sinceemployeescangenerateequivalentshorttermrevenueswhiletakingonvastlydifferentamountof
riskinthelongerterm,theBankshallensurethatvariablecompensationisadjustedtotakeintoaccount
the risksanemployee takes.This should considerall typesof risksovera timeframe sufficient for risk
outcomestoberevealed.
Compensationshouldbesensitivetoriskoutcomesoveramultiyearhorizon.
14. KNOWYOURSTRUCTURE
TheBoardandSeniorManagementshouldunderstand (i)thestructureandorganizationoftheGroup;(ii)the
legalandoperational risksandconstraintsofthevarioustypesof intragroupexposuresandtransactionsand
howtheyaffecttheGroupscapitalandriskprofile.
Soundandeffectivemeasuresand systemsare inplace to facilitategenerationandexchangeof information
among and about the various entities, tomanage the risks of the Group as awhole, and for the effective
supervisionoftheGroup.
TheBoardapprovespoliciesandstrategiesfortheestablishmentofnewstructures.Moreover,theBoardshall:
a Avoidsettingupunnecessarilycomplicatedstructures;b Requiretheapprovalofthe InvestmentandParticipationCommittee forthecreationofnew
legalentities;
c Recognizetherisksthatthecomplexityofthelegalentitystructureitselfmaypose;d Evaluatehowtheaforementionedrisksof thestructureand legalentityrequirementsaffect
theGroupsabilitytomanageitsriskprofileanddeployfundingandcapitalundernormaland
adversecircumstances;
e Ensure compliance with applicable regulations governing the creation and supervision offoreignsubsidiaries;
When the Bank is indirectly exposed to riskswhile performing certain services or establishing structures on
behalfofcustomers,SeniorManagementshallensuretheBankhasappropriatepoliciesandproceduresto:
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a Establish processes for the approval of such activities taking into account the implications for theresulting
operational
structure
of
the
organization;
b Ensurethatthe informationregardingtheseactivitiesandassociatedrisk isappropriatelyreportedtotheBoardsandcompetentsupervisors;
c Ensurethattheseactivitiesaresubjecttoregularinternalandexternalauditreviews.
15. PRINCIPLESANDSTANDARDSOFBUSINESSCONDUCT
15.1. GeneralPrinciplesforBankEmployees(1) Integrity:mustobservehighstandardsofintegrityandfairdealingincarryingouteveryfunction;(2) Dueskill,careanddiligence:mustactwithdueskill,careanddiligenceincarryingouteveryfunction;(3) MarketConduct:mustobserveproperstandardsofconduct infinancialmarkets incarryingoutevery
function;
(4) RelationswithBDL,BCCandSIC:mustdealwithBDL,BCCandSICinanopenandcooperativemannerand must disclose appropriately any information of which BDL, BCC or SIC would reasonably be
expectedtobenotified;
(5) Management, Systems and Control: an employee who has significant responsibility must takereasonablecaretoensurethatthebusinessoftheBankforwhichheisresponsibleisorganisedsothat
itcanbemanagedandcontrolledeffectively;
(6) Compliance:anemployeewhohassignificantresponsibilitymusttakereasonablecaretoensurethatthebusinessoftheBankforwhichheisresponsiblecomplieswithanylegislationapplicableinLebanon.
15.2. GeneralPrinciplesfortheBanksBusiness(1) Integrity:mustconductitsbusinesswithhighstandardsofintegrityandfairdealing;(2) DueSkill,CareandDiligence:mustconductitsbusinessactivitieswithdueskill,careanddiligence;(3) Management, Systems and Controls: must ensure that its affairs are managed effectively and
responsiblybyitsseniormanagement.ABankmusthaveadequatesystemsandcontrolstoensure,as
farasisreasonablypractical,thatitcomplieswithlegislationapplicableinLebanon;
(4) Resources:mustmaintainandbeabletodemonstratetheexistenceofadequateresourcestoconductandmanageitsaffairs.Theseincludeadequatefinancialandsystemresourcesaswellasadequateand
competenthumanresources;
(5) MarketConduct:mustobserveproperstandardsofconductinfinancialmarkets;(6) Information and Interests: must pay due regard to the interests of the clients and communicate
informationtotheminawaywhichisclear,fairandnotmisleading;
(7) Conflictof Interest:must take reasonable steps toensure that conflictsof interestarepreventedor
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meritand,wheneverappropriateandfeasible,competitivebidding;
15.6. SoftDollarsPolicy:undernocircumstancesshouldemployeesenterintosoftdollararrangementsonbehalfoftheBank;
15.7. FairCompetition:discussionswithcompetitorsoftheBankaboutcurrentorfuturepricingplansarestrictlyforbidden.However,thisdoesnotprohibitanemployeefromconductingsurveysofcurrentBankratesand
feesinourareawhenmanagementhasassignedsuchatask;
15.8. PersonalFeesandCommissions:noemployeemayacceptpersonalfeesorcommissionsinconnectionwithanytransactionsonbehalfoftheBank,exceptwheresuchfeesorcommissionsareexplicitlyauthorizedby
theBoardofDirectorsand/orSeniorManagementoftheBank;
15.9. Employmentoutside theBank: an employee is expected todevote full attention to the Banks interestduring
regular
working
hours
of
employment.
All
outside
employment
must
be
reported
to
and
approved
by
theChairmanandGeneralManager.TheBankreservestherightnottoapproveanyoutsideemployment
thatcouldbedetrimentaltotheBanksinterests.Forthepurposesofthisparagraph,thetermemployee
doesnotincludedirectorsoftheBank;
15.10. Work Relationships: no employee may give or receive any special consideration to the conditions ofemployment of another employee due to family or personal relationships. Just as external business
decisionsarebasedonsound,ethicalbusinesspractices,allpersonneldecisionsmustbebasedonsound
managementpracticesandmustnotbeinfluencedbypersonalconcerns.
15.11. Confidentiality: the Bank has the fiduciary responsibility tomaintain all information regarding clients instrictconfidence,includingtheclientsidentity,theclientsfinancialsituation,theclientsportfolioholdings;
andanyadviceorarrangementprovidedtotheclient,inaccordancewithBankingSecrecyLaw.
(1) AllemployeesmustcomplywiththeBankssecrecyandprivacylaws.(2) Employeesmustnotdivulge information regarding theBank to anyoutsider except for a legitimate
businesspurposeandwith theunderstanding that the information is confidentialand is tobeused
solelyforthelimitedbusinesspurposeforwhichitwasgivenandreceived.
(3) Employees must collect and maintain only the information that is necessary to serve a client inmanaginghisrelationship/accountsproperlyandtorenderfairadvisoryanddealingservices;
(4) Employees must maintain in a secure manner all files and record keeping systems which containcustomerinformation;
(5) Employees, during or subsequent to association or employmentwith the Bank andwithout properauthority,maynotgiveormakeavailabletoanyone,oruseforhisorherownbenefit,informationofa
confidentialnaturederivedfromassociationoremploymentwiththeBank;
(6) Employeesareexpectednottodivulgeconfidential informationabouttheBanksassets,businessandareexpectedtouseconfidentialinformationonlyintheperformanceoftheirduties.Employeesshould
be discreet with the Bank confidential information and not discuss it in places where it can be
overheard,suchaselevators,restaurants,taxisandairplanes;
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15.20. Communication of Information: all communications with clients must conform to BDL regulatoryrequirements,
the
Banks
Conduct
of
Business
Compliance
Policy.
All
information
provided
to
clients,
prospectiveclients,theirrepresentatives,orthemediamustbeprofessional,unbiased,clear,fairandnot
misleadinginanyway
15.21. QualityServiceandComplaintsHandling:allemployeesmustbecommittedtodeliveringqualityservicesina cost effective manner. All employees should provide the best service to clients. All employees are
expected to treat the client fairlyandcourteously, recognizingclientsdistinctneedsand respect clients
legalrightsandprivacy.Thefollowingaresomeofthetipsthatshouldbeobserved.
(1) clientgreeting;(2) fullyexplainfinancialproductsandservicesthatmeetclientsprofileandneeds.(3) remain knowledgeable and well aware of the financial products, market issues and BDL rules and
regulations;
(4) accessible,dependableandtimelyresponsiveservice;(5) clear,open,andrespectfulrelationship;(6) mustalwaysshowandacceptresponsibilityandaccountabilityforrespondingtoclientcomplaints;(7) responsiveserviceandcommittedtoimprovement;
15.22. AntiFraudRequirements:allemployeesarerequiredatalltimesto:(1) acthonestlyandwithintegritytosafeguardtheBanksactivitiesforwhichtheyareresponsible;(2) participateactivelyinprotectingclientsmoneyandinformation;(3) toreportsuspiciousoperationstotheChairmanandGeneralManagerandtheCompliance Officer;
15.23. AML, CTF and KYC Requirements:AntiMoney Laundering (AML), Counter Terrorist Financing (CTF) andKnowYourCustomer(KYC)areprioritizedfocusareaswithintheBank.Appropriateproceduresareinplace
andimplementedwithintheBankinaccordancewiththeapplicablelocalandinternationallaws,rulesand
regulations.AllemployeesmuststrictlycomplywithallapplicableAML,CTFandKYCpolicies,procedures,
systemsandcontrols.Allemployeesmustbeabletoidentifyandunderstandrisksofmoneylaunderingand
terroristfinancinginordertoapplypreventivemeasures.AllemployeesmustbeabletoapplyproperKnow
YourCustomer
(KYC)
practices
for
understanding
the
general
activities
in
which
aclient
would
be
expected
toengage.Allemployeesmustbeabletodetectunusualandsuspiciousactivitiesandtodeterminewhether
aspecificcustomerisincludedondifferentlistingsofterroristsand/orsanctions.
15.24. Personal Account Transactions: during the course of employment with the Bank, it is prohibited toundertake,orenter into,apersonalaccounttransaction;tocommunicateany informationoropiniontoa
close relative, familymemberor toanotherperson if theemployee knows,orought to know, that that
personwillasaresult,enterintosuchatransactionorprocuresomeotherpersontodoso.
15.25. ClientsOrdersandSuitability:allemployeesmustactinthebestinterestoftheclientswhilereceivingandpassing orders. It is prohibited to make any personal recommendation to any client to buy or sell a
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19.
REPORTING
POSSIBLE
VIOLATIONS;
ACCOUNTABILITY
FOR
ADHERENCE
TO
THE
GUIDELINES
TheBankhasdevelopedthefollowingprocedurestoensurethepromptandconsistentenforcementofthe
Guidelines, protection for persons reporting questionable behavior, clear and objective standards for
compliance,andafairprocessbywhichtodetermineviolations.
(1) Ifanemployeebelievesthatheorsheviolatedorcreatedapotentialviolation,ortheappearanceofaviolation,oftheseGuidelines,eveninadvertently,theemployeeshouldreportthefactsofthesituation
totheComplianceOfficer.
(2) If an employee suspectsor is awareof anapparent violation of theseGuidelines orother illegalorunethicalbusinessorworkplaceconductbyanotheremployee, that factshouldbe reported ingood
faithtotheComplianceOfficer.
(3) TheComplianceOfficerhasanobligationtoreportthebreachdirectlytotheBoardofDirectorsandtheAMLCC.
(4) Upon receipt of a breach or suspected violation, the Compliance Officer in consultation with theAMLCC,will evaluate the report as to gravity and credibility. If suchpersonsdetermine that further
action iswarranted, theywill consult, as appropriate, the BCC or outside advisor (legal or external
auditors);
(5) Reportscreatedasaresultofinvestigation,shallbemaintainedbytheComplianceOfficerforaperiodofminimumsixyearsfromthedateofitsreceipt.
(6) TheBankmustnotifyemployeesuponanymaterialamendmenttotheGuidelines.Onanannualbasis,the
Compliance
Officer
will
review
the
sufficiency
and
effectiveness
of
the
Guidelines.
(7) Retaliation against any employee who reports a violation is strictly prohibited and constitutes anadditionalviolationoftheGuidelines.
(8) Any violation of these Guidelines could result in disciplinary action, including, but not limited toTermination of employment, Downgrading, Suspension, Warnings, Probationary status and, if
warranted,legalproceedings.
(9) Asnecessary,violationsmayresultinreferraltotheBCCorgovernmentauthorities.(10)Noone,regardlessofhisorherposition,isauthorizedtodirectanothertocommitanillegalact.(11)No violationof theseGuidelines,anypolicies,procedures, systems and controls,orany law, ruleor
regulationwillbejustifiedthatitwasorderedbysomeoneinhigherauthority.
(12)Should itbediscovered thatanemployeehasbeenarrested foror chargedwith suspected criminalconduct,eitheronoroffthejob,theBankmayconductan independentreviewoftheavailablefacts
anddeterminewhetherdisciplinaryoremploymentactioniswarranted.
(13)TheBanksdirectors and SeniorManagement are expected to complywith theseGuidelines and allapplicablelaws,rulesandregulations.Theyarealsoexpectedtopromoteethicalbehaviorby(1)having
open door policy; (2) encouraging employees to report violations to the ComplianceOfficer and/or
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appropriate personnel; and (3) reminding employees that the Bank will not permit retaliation for
reports
made
in
good
faith.
(14)Allemployeesarerequiredtocooperate fully inany internal investigation. Ifanyemployeediscoverstheneedtoreportasuspectedviolation,thatpersonwillnotbeterminated,disciplined,demotedor
otherwisediscriminatedagainst for (1)makinga reportofaviolationor suspected violation ingood
faithandonthebasisofareasonablebeliefthataviolationhasoccurredorwilloccuror(2)assisting
withanyensuing investigation.Totheextentpermissible,theBankwillendeavortokeepconfidential
theidentityofanyonereportingpossibleviolations.
20. INTERPRETATIONAND EXCEPTIONS TO THESEGUIDELINES: theseGuidelinesmay be amended ormodified by the Compliance Officer of the Bank. Amendments to the Guidelines will be disclosed to
shareholdersandallemployeesinaccordancewithBDLandBCCRulesandRegulationsandtheBanksPolicy
andProcedures.
21. CERTIFICATIONS:Allemployeesare required to certify compliancewith theseGuidelinesonanannualbasisbysigningandreturningthecertificationattachedheretototheComplianceOfficer.
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CorporateGovernanceandBusinessEthics
39
ANNEX1
LISTOFSHAREHOLDERSASONMarch10,2011
ShareholderName BalanceShares % out of common
170000
JeanRiachi 23093 13.58
EmileRiachi 14714 8.66
GeorgesBouJaoude 11898 7.00
MariaCatafagoAudi 21356 12.56
JoeAouad 2869 1.69
TareckFarah 1593 0.94
SihamBakhaaziCatafago 6418 3.78
KapitalHoldingSAL 4446 2.62
PaulKebbe 100 0.06
PatrickGeorge 2273 1.34
ZahiaRiachiJabre 26000 15.29
AbdelKarimAlKhalil 2272 1.34
NestInvestmentsHoldingLebanonSAL 4546 2.67
SalehAlHajjaj 2273 1.34
AbdelAzizAlAfaliq 6182 3.64
MohammedAlDhoheyan 4546 2.67
SalahAlQahtani 2273 1.34
ShadiKaram 100 0.06
SultanMohammedBenSalehBenSultan 4546 2.67
DarwishBenAhmad&SonsCo. 4546 2.67
MohamedAlQassimi 4546 2.67
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CorporateGovernanceandBusinessEthics
41
ANNEX2
GROUPSTRUCTUREASONMarch10,2011
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Initial:_________
CorporateGovernanceandBusinessEthics
42
ANNEX3
ORGANIZATIONALCHARTASONMARCH10,2011
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Initial:
CorporateGovernanceandBusinessEthics
DECLARATIONOFCOMPLIANCEANDCORPORATEGOVERNANCE
Name :__________________________________________
DateofAppointment :__________________________________________
CurrentPosition/Designation :__________________________________________
IherebyacknowledgehavingcarefullyreadFFAPrivateBanks.a.l.CorporateGovernanceandBusinessEthics
Guidelineson_______________(dd/mm/yyyy).
Iunderstandthatitismyresponsibilitytoreadthisstatementcarefully.Iunderstandthatanyviolationofthe
Guidelines or illegal or unethical conduct is subject to disciplinary action, up to and including removal or
dismissal,and,ifwarranted,legalproceedings.
IamexecutingandsubmittingthisReceiptandCertificationFormbecause:
Iamcurrentlyanemployee,officerordirector,andIamsubmittingeitheran initialorarequiredannual
Receipt&CertificationForm.
Iamanewemployee,officerordirector.
Iamawareofmyrolesandresponsibilitiesasprovidedundermyjobdescription.Iundertaketostandready
toservethevaluesandprinciplesoftheBank.
IundertaketocomplywiththerequirementoftheseGuidelinesandwithallapplicablePolicies,Procedures,
Systems and Controls of BDL, BCC, the Bank, and the applicable laws and regulations, a copy ofwhich I
acknowledgehasbeenmadeavailableformyreview,andanyotherproceduresandmanualsassuppliedto
mefromtimetotime.
_________________________/_________________________ Date:_____________
EmployeeName
Signature
(dd/mm/yyyy)
_________________________/_________________________ Date:_____________
Witnessedby:Name Signature (dd/mm/yyyy)