1. Role of Board of Directors in Strengthening Corporate Governance in Banks

2. Role of the Board of Directors
Setting Tone at the Top
Defining Business Philosophy

3. Independence of Board Independent of the influence of Management
Clearly know their responsibilities and powers
Focus on Policy Making and general direction
No role in day to day affairs
No conflict of interest
Understand the bank’s risk profile
- training programs for Board members

4. Board Sub-committees
Preferably comprising non-executive board members, in the areas of:
Audit
Risk Management
Human Resource
Credit
Others
With well defined objectives, authorities and tenure
Without indulging in day to day affairs
Full board to review their performance

5. Responsibilities of Board
Setting the:
Objectives
Vision and Mission statement
Strategy & Business Plan
Providing oversight to ensure achievement of organizational objectives
- within the legal and regulatory framework and high business ethics
Standing accountable to stakeholders

6. Responsibilities (Contd.)
Appointing key executives – based on FPT criteria
Defining powers and responsibilities of senior management
Succession planning for key positions
Disclosing conflict of interest
Ensuring disclosure to promote transparency and market discipline

7. Responsibilities – Policy Framework
Formulating policies :
Credit
Investments and Treasury Management
Human Resources
Internal Audit and Control
Compliance
Risk Management
Other areas
Communication and compliance

8. Responsibilities – Internal Audit
Creation of separate department of Internal Audit, with
Professional Staff
Full Scope coverage
Audit Charter & Manual
Head of Internal Audit reporting to the board or the Audit Committee
Appointment and remuneration of Head of Internal Audit

9. Responsibilities - MIS
Ensuring existence of an effective Management Information System
For keeping itself abreast with
Activities
Operating Performance & financial condition
Operating environment
Major Risks
Evaluating Performance of the management - based on certain benchmarks

10. Responsibilities – Board Meetings
At least quarterly, preferably more frequently
Individual Directors to attend at least half of the meetings in a year
Information through agenda items in advance
Recording minutes of deliberations in detail

11. Responsibilities - Others
Reviewing the effectiveness of Internal Controls
Strengthening Risk Management

12. Responsibilities - Others
Annual Financial Statements :
- Coverage of Directors’ Report
- Statement on Internal Controls
- Risk Management Framework

13. Responsibilities - Others
IRAF Reporting
Regulatory compliance
Basel-II implementation

14. Thank You