A conflict of interest may arise where a Board member or close family members such as a spouse, child, parent, or sibling has private interests that could improperly influence the performance of the Board member’s official duties and responsibilities. Conflict may also arise where a Board member uses their office for personal gain.
Board members are required to avoid conflict of interest and deal at arms-length in any matter that relates to the organization. However, a Board member who identifies an area of conflict shall be required to disclose any actual or potential conflict of interest to the Board.
In so reporting, the Board member is required to provide all relevant information, including information which relates to their immediate family members by blood or marriage which is related to the area of conflict. Then declared, the Board member shall abstain from decisions where the conflict exists.
The Secretary should keep a record of conflicts of interest declared, for accountability purposes, and as a rule of good practice on appointment and on regular intervals or at any time when circumstances change, all members shall in good faith disclose to the Board for recording, any other business or interest likely to create a potential conflict of interest.
The Board shall request a director to take reasonable steps to remove the conflict of interest, then the director shall absent himself/herself from the room when discussion and voting occur on matters to which the conflicts relate. The entry and exit of the director concerned shall be minuted by the secretary
Directors do not have to absent themselves when either;
- The conflict of interest relates to an interest common to all members or;
- The Board passes a resolution that identifies the director, the nature and extent of the directors interest and clearly states that the other directors are satisfied that the interest should not disqualify the director concerned from discussion and/or voting on the matter.
Conflicts of Interest Policy
Conflict of Interest refers to a situation in which a person has a direct or indirect private or personal interest in a matter which is sufficient to directly or indirectly influence or has the potential to directly or indirectly influence the objective exercise of his or her official or professional duties or the making of an impartial decision over the same or related matter.
This policy shall be applicable to the Directors, Senior Management and any other employees of the Company that may as a consequence of their role participate in any activity which gives rise to any actual or potential Conflict of Interest (together, the “Relevant Persons”).
No Relevant Person should participate, directly or indirectly, in any activity which gives rise to any actual or potential Conflict of Interest between their own interests and those of the Company. This policy extends to the Associates of the Relevant Persons, who include:
a) a spouse, son, adopted son, step-son, son-in-law, daughter, adopted daughter, step-daughter, daughter-in-law, father, step-father, father-in-law, mother, step-mother, mother-in-law, brother, step-brother, brother-in-law, sister or step-sister, sister-in-law, grand child or spouse of a grandchild of that Relevant Person;
b) any company in which that Relevant Person is a director or secretary, has a controlling interest or is the controlling interest;
c) any company in which that Relevant Person, or any of the Associates mentioned in subparagraph (a) above, has control of 20% or more of the voting power on appointments to the board of directors or entitlement to dividends in the company, whether such control is exercised individually or jointly; or
d) any employee of that Relevant Person.
While it is in the interest of the Company for the Directors and staff members to participate in various civic and professional organizations, it is important that the Company’s ethical standards are not compromised and that Conflicts of Interest are avoided. Business relationships must be carefully scrutinized to avoid even the appearance of impropriety.
If any Director or Senior Management is unclear of the impact of this policy upon a personal, non-Company situation, it is important to seek guidance from: (i) the Company Secretary and the Chairperson; or (ii) the Company Secretary and the chairperson of the Audit Committee, prior to entering into that transaction or situation.
If any other employee is unclear of the impact of this policy upon a personal, non-Company situation, it is important to seek guidance from the Company Secretary and the head of the relevant department of the respective employee.
Objective of this policy
The Board shall establish this Conflict of Interest Policy in recognition that excessive activities and gratuities and access to information may lead to actual or potential Conflicts of Interest between the interests of the Company and those of its Relevant Persons.
Scope
Activities which may compete or conflict with the Company’s interests include, but are not necessarily limited to, the following:
Outside Financial Interest
Where the Relevant Person has a financial interest in a customer, Shareholder, creditor or debtor, such an interest must be disclosed immediately to the Senior Management or the Board as appropriate. Thereafter, the Relevant Person shall not be directly involved in the Company’s dealings with the customer so long as the interest continues to exist.
The above restriction does not apply in cases where employees of the Company have holdings of public quoted Securities unless the Senior Management views the interests to be material, and that the financial interest is considered likely to impair the objectivity of the member of staff concerned.
The Board or Senior Management may determine from time to time what may be considered material. Any holding of 5% or more of the voting shares of a public listed company would be regarded as material.
Other Business Interests
It shall be considered a Conflict of Interest if the Relevant Person of the Company conducts business other than the Company’s business during office hours. Where the acquisition of any business interest or participation in any business activity outside the Company and office hours demands excessive time and attention from the member of staff, thereby depriving the Company of that employee’s best efforts on the job, a Conflict of Interest is deemed to exist.
Other Employment or Directorships
Before making any commitment, employees are to discuss possible part-time employment or other business activities outside the Company’s working hours with their manager or departmental head. A written approval of the head of department shall be obtained before an employee embarks on part-time employment or other business activities. Approval shall be granted only where the interests of the Company will not be jeopardised.
Permission will not be granted for employment that:
a) encroaches on the time or attention which should be devoted to Company activities;
b) adversely affects the quality of work performed;
c) competes, directly or indirectly, with the Company’s activities or create the inference thereof;
d) involves the use of the Company’s personnel, equipment, supplies, or facilities;
e) implies sponsorship or support by the Company on behalf of such interest, employment, activity or organisation; or
f) adversely affects, directly or indirectly, the good name of the Company.
Other Directorships
No person shall be permitted to hold the position of a director in more than 2 institutions licensed under the Banking Act unless the said institutions are Associates, subsidiaries or holding companies. This rule shall not apply to government bodies represented in institutions’ boards by virtue of their position as shareholders.
Corporate Directorship
Senior Management must not solicit corporate directorships. A person in a position of Senior Management shall not serve as a director of another corporation without the approval of the Board. Persons in positions of Senior Management who hold directorships without such approval must seek approval immediately, if they wish to remain as directors of other corporations and provided that such directorships have been notified to the Company Secretary.
However, Senior Management may act as directors of non-profit public service corporations, such as religious, educational, cultural, social, welfare, and philanthropic or charitable institutions, subject to the policy guidelines of the Company.
Trusteeship
Employees must not solicit appointments as executors, administrators or trustees of customers’ estates. If such an appointment is made and the employee is a beneficiary of the estate, his signing authority for the estate’s bank account(s) must be approved by the Board, who shall not unreasonably withhold approval.
Gifts, Fees, Legacies, and Loans
Employees must not solicit any gifts, monies, commissions, benefits or other favours extended or received from any party in respect of or in relation to any business dealings between the Relevant Persons and the Company.
Political Involvement
The Company is politically neutral and any Director, Senior Management and any other employee of the Company that may as a consequence of their role participate in any activity which gives rise to any actual or potential Conflict of Interest shall not be involved in any activities that will adversely affect the reputation of the Company.
Identifying and Managing Conflicts of Interest
Should a Conflict of Interest arise, it must be managed promptly and fairly. As a minimum standard the Company shall have in place arrangements designed to ensure that:
a) divisions and legal entities operate with appropriate independence from one another;
b) there are effective procedures in place to control the flow of information;
c) supervisory arrangements provide for separate supervision of staff where necessary for the fair management of Conflicts of Interest;
d) there are appropriate controls in place to identify and manage cross-board memberships and outside business interests of Relevant Persons;
e) information disclosed by the Relevant Persons to the Company Secretary shall be recorded alongside details of the Company’s existing relationships in a secure environment to enable the effective identification and management of potential and actual Conflicts of Interests;
f) where necessary, Relevant Persons may be asked to step aside from working on a specific transaction or participating in the management of a potential Conflict of Interest; and
g) there is a periodic review of the adequacy of the Company’s systems and controls.
Information Barriers
The Company shall respect the confidentiality of information it receives from all its customers and complies with all applicable laws with respect to the handling of that information.
The Board shall put in place effective procedures to ensure that confidential information pertaining to any of the Company’s customers, prospective customers, products, or procedures shall not be revealed to any persons outside of the Company except by court order, nor used in any manner for personal gain.
Inside financial or other material information regarding the Company is not to be released to any person or entity without prior written approval from the Chief Executive Officer.
Further, under no circumstances may a director or staff member obtains or knowingly assist others to obtain unauthorized confidential information about any individual, nor perform any unauthorized computer function, or knowingly provide inaccurate, misleading, altered, or incomplete information regarding any account or document.
Staff members should not attempt to answer inquiries from the media about or on behalf of the Company or its customers. All questions from the media should be referred to the Chief Executive Officer or to his/her designated Senior Management official.
The principal way in which the Company structures its business, to manage actual and potential conflicts of interest, is through the maintenance of information barriers which are designed to restrict information flows between different divisions of the Company and to enable the Company and the Relevant Persons to carry out their roles without being influenced by information held within the Company or Relevant Persons that may give rise to an actual or potential Conflict of Interest.
Organizational Arrangements
The Board shall ensure that an organisational structure is in place within the Company which provides for the segregation of duties of the Relevant Persons in order to prevent conflicts arising through inappropriately apportioned roles and responsibilities so as to ensure that no one Relevant Person can exercise inappropriate influence over a particular process within the Company without effective oversight and supervision.
Board Meetings
Where a Director (or where applicable Senior Management) has an interest in a particular matter at a meeting of the Board, he/she shall declare such interest immediately and shall recuse themselves from or be recused by the Board from participating in discussions on the matter in question in order to ensure that the matter is objectively dealt with. They shall not be counted for the purpose of constituting a quorum.
Where a Director has already declared an interest, he/she shall not receive the information relating to the issue where he/she is conflicted as part of the Board pack.
Matters pertaining to the Chairperson
One of the Independent Non-Executive Directors shall chair meetings where there are discussions relating to the succession of the Chairperson, the Chairperson’s performance appraisal and where the Chairperson has a Conflict of Interest.
Reporting and Disclosure of Interests
It is the responsibility of each Relevant Person to familiarise themselves with this Policy and to immediately disclose Conflicts of Interest or potential Conflicts of Interest.
The Relevant Persons shall provide a written confirmation or state any conflict that they may have to the Company Secretary, on an annual basis, stating that they have no material interest or any Conflicting Interest with the Company.
In the event of a conflict arising, the Director or Senior Management shall inform the Company Secretary and the Chairperson or the Company Secretary and the chairperson of the Audit Committee. In the event of conflict arising, the employee shall inform the Company Secretary and the head of the relevant department of the respective employee.
Consequences of Breach of Conflict of Interest Policy
In some cases, a breach of this policy could be a violation of the law or regulations and could be cause for legal action against a Relevant Person.
If in the opinion of the Board, any Director violates any of the provisions of this policy, severe and appropriate disciplinary action will occur. Such disciplinary action may include such Director being required to vacate the office of Director and/or termination of employment.
If in the opinion of the Senior Management, any employee violates any of the provisions of this policy, severe and appropriate disciplinary action will occur. Such disciplinary action may include immediate termination of employment. The Board will be made aware of all violations of this policy by employees via the appropriate communication channels.
