Good corporate governance practices represent a key pillar of the way in which Fincorp operates and conducts business. Indeed, the Board of Fincorp is committed to continuously foster a corporate culture towards upholding the highest standard of business integrity, transparency and professionalism in all its activities to ensure that the activities within the Company and its subsidiary are managed ethically and responsibly to enhance business value for all stakeholders.
The Board is responsible for setting out the strategic directions of the Company, oversees their execution and establishes the procedures and practices for effective capital management and internal controls alongside ensuring adherence of the Company and its subsidiary to relevant legislations and policies.
The Board has set up an Audit committee to assist it in fulfilling its financial reporting responsibilities. Moreover, corporate governance matters are taken up at the level of the Board which ensures that principles adopted adhere to those of MCB Group Ltd, the ultimate holding Company. Furthermore, the Board Charter provides for an appropriate reporting mechanism whereby matters affecting the affairs and reputation of the Company and its subsidiary are escalated as appropriate to the Board by the relevant Board Committee and the Chairperson of the Board of its subsidiary respectively.
Board and Board Committees
In accordance with the Board Charter of Fincorp Investment Ltd, the objective of the Board is to define the Company’s purpose, strategy and value and to determine all matters relating to the directions, policies, practices, management and operations of the Company.
The Board may from time to time establish standing and ad hoc committees to assist it in carrying out its responsibilities. As such, it has set up an Audit Committee which has its own charter approved by the Board and reviewed periodically as deemed necessary. The Charter sets out the committee’s role, composition, powers, responsibility, structure, resources and any other relevant matters.
The Committee currently consists of two directors with relevant financial expertise and experience, namely Messrs Sunil Banymandhub and Michel Doger de Speville, C.B.E. It meets on a regular basis and on an ad hoc basis when required. Its duties are to assist the Board in fulfilling its financial reporting responsibilities by overseeing the financial reporting process to ensure the integrity and transparency of the financial information published by Fincorp. It also reviews the internal control system, the management of financial risk and the audit process as well as monitors compliance with relevant laws and regulations.
Corporate Governance Committee
The Company being a subsidiary of MCB Group Limited does not have a separate Corporate Governance Committee. The Board ensures that the principles of good governance of MCB Group Ltd are followed and applied throughout.
The Board of Fincorp consists of five non-executive directors. The Company has no workforce and all administrative matters are outsourced to MCB Group Limited and its subsidiaries.
The directors of Fincorp are shown below. Bioprahies are available by clicking on the relevant name.
MCB Registry and Securities Ltd acts as Secretary to the Board. Click here for biographies of its representatives.
Director nomination and appointment process
The responsibility of selecting new directors forms part of the responsibility of the Remuneration, Corporate Governance and Ethics Committee of MCB Group Ltd.
As regards the nomination process, directors recommended by the Remuneration, Corporate Governance and Ethics Committee of MCB Group Ltd must stand for election at the Annual Meeting of Shareholders. The latter are provided with relevant information on the potential candidates prior to the Annual Meeting, to assist them to take an informed decision on the directors’ election. It is worth highlighting that, at each Annual Meeting, one-third of Board members, notably those having been longest in office, are required to retire, while being eligible for re-election.
Internal Audit function
As the Company is a holding company with no operations, the requirement for an internal audit function at the level of the Company is not considered as relevant. The board of Fincorp is appraised at its board meetings and through its Audit Committee, of all material matters reported by the internal audit function and audit committee of its subsidiary.
Moreover, the Board reviews annually the need to establish an internal audit function and is of opinion that the costs to be incurred compared to the benefits to be derived from establishing an internal audit function are presently not justified.
Risk Management and Internal Control System
The Board of Directors is ultimately responsible for risk management, the organisation’s systems of internal control, procedures in place within the organisation and for the definition of the overall strategy for risk tolerance. The Company’s policy on risk management encompasses all significant business risks including physical, operational, business continuity, financial, compliance and reputational which could influence the achievement of the Company’s objectives.
The risk management mechanisms in place include:
- a system for the ongoing identification and assessment of risk;
- development of strategies in respect of risk and definition of acceptable and non-acceptable levels of risk;
- reviewing the effectiveness of the system of internal control; and
- processes to reduce or mitigate identified risks and contain them within the levels of tolerance defined by the Board.
Given that the Company is a holding company, any material matters arising out of the risk management committee and audit committee of its subsidiary, are reported and discussed at the board of the Company.
At the Company level, the key residual risks are legal, regulatory, reputational, performance and financial risks and the Board is directly responsible for the management and monitoring of these risks.
Relations with shareholders and other stakeholders
The shareholders are properly kept informed on matters affecting the Company as they are fairly represented on the Board. All Board members are requested to attend the Annual Meeting to which all shareholders are invited. Open lines of communication are maintained to ensure transparency and optimal disclosure.