National Finance House (NFH) (the Group) is committed to establishing and maintaining the highest standards of corporate governance in line with industry best practice, in order to ensure fairness for all stakeholders, and to achieve the highest levels of organisational efficiency and effectiveness.
NFH recognizes that strong corporate governance is essential for building trust and confidence among its stakeholders, including shareholders, customers, employees, and regulators. The Group has established a comprehensive framework of policies and procedures to ensure transparency, accountability, and ethical behaviour at all levels of the organization. This includes a robust system of internal controls and risk management practices, as well as regular reporting and disclosure requirements. NFH also places a strong emphasis on board independence and diversity, with a diverse mix of directors who bring a range of skills and perspectives to the table. The Group's commitment to corporate governance extends beyond compliance with legal and regulatory requirements; it is an integral part of its culture and values. By maintaining the highest standards of corporate governance, NFH aims to build long-term relationships with its stakeholders based on trust, integrity, and mutual respect.
Structure
NFH has put in place a robust corporate governance structure that clearly sets out the objectives of the Group, together with the means and incentives through which the Board and Management pursue objectives that are in the best interests of the Group and its shareholders. This structure is designed to establish and maintain an environment which adopts the highest standards of ethical business conduct, facilitates effective monitoring, and encourages the most efficient use of resources.
Principles
The corporate governance structure of NFH is based on a number of critical principles. These include: an independent, active and engaged Board of Directors that has the skill to properly oversee and direct Management; a Code of Conduct to guide directors, managers and staff in their day-to-day administration of the Group’s business; the imposition of effective controls and monitoring systems; and the dissemination of timely and accurate information to shareholders, regulatory authorities, and other stakeholders.
Board of Directors
The Board consists of nine members, two of whom are independent directors. The Board members are elected by the Ordinary General Meeting via secret ballot for a renewable three-year term. The full Board meets for a minimum of four times each year. The Board of Directors is accountable to the Group’s shareholders and other stakeholders for ensuring that NFH operates in a responsible and sustainable manner while fulfilling its public purpose.
Board Committees
The Board has formed three committees to assist it in carrying out its responsibilities: Audit, Compliance & Risk Committee, Nomination and Remuneration Committee and Executive Committee.
Audit, Compliance & Risk Committee
This committee is comprised of three directors, two of whom are independent directors. Its responsibilities include reviewing the integrity of the Group’s financial reporting; selecting external auditors for approval by shareholders; monitoring the activities and performance of the internal audit function; and ensuring compliance with all applicable laws and regulations.
Nomination and Remuneration Committee
This committee has three members, the majority of whom are independent directors. Its responsibilities include evaluating and recommending the composition of the Directors and sub committees; considering and recommending the appointment of Directors including Independent Non-Executive Directors; and determining the processes for evaluating the effectiveness of individual directors and the Board as a whole.
Executive Committee
This committee consists of four directors and the Group’s Chief Executive Officer. Its responsibilities include following-up with the Management to ensure timely implementation of all related decisions and resolutions issued by the Board of Directors, overseeing the Group’s strategic planning, directing the funding and business strategies of the Group to achieve its goals and guiding the Group in its relationships with all stakeholders.
Management
The Board has delegated authority to the Chief Executive Officer for the day-to-day management of the Group. She is supported by a qualified and experienced management team and five committees: Management Committee, Credit Committee, Risk Management Committee, Asset & Liability Committee and IT Steering Committee. These committees provide a forum for collaboration and decision-making among experts in their respective fields. Together, this structure allows for effective management of the Group's resources while maintaining a focus on growth and innovation.
Compliance
The Group conducts its business in compliance with all relevant bye-laws, rules and regulations governing financial institutions, including the rules and guidelines established by the Central Bank of Bahrain. In light of the increased risk environment and the heightened expectations of the regulators, the Board has made compliance risk management a priority within the Group, with oversight provided by the Board's Audit, Compliance & Risk Committee. The Group has also appointed a Compliance and Money Laundering Reporting Officer (MLRO) to ensuring that all operations are conducted in accordance with the highest standards of compliance and regulatory requirements.
Communication with Stakeholders
The Group communicates with all of its stakeholders in a transparent, precise and timely manner. The primary channels of communications include annual general meetings, semi-annual and annual financial statements, the Group’s website, and regular announcements in local media.