CBB Volume 2: Contents

Central Bank of Bahrain Volume 2—Islamic Banks
Part A
Reporting Requirements
PD Public Disclosure Requirements
PD-1 Annual Disclosure Requirements
PD-1.3 Disclosures in the Annual Report for Bahraini Islamic Banks
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PD-1.3.10

The following information relating to corporate governance must be disclosed in the annual report:

(a) Information about the Board structure (e.g. the size of the Board, Board committees, function of committees and membership showing executive, non-executive and independent members, number and names of independent board members), and the basic organisational structure (lines of business structure and legal entity structure);
(b) Information about the profession, business title, and experience in years of each Board member and the qualifications and experience in years of all senior managersG ;
(c) Descriptive information on the managerial structure, including:
(i) Committees (see below for detailed disclosure requirements relating to various types of committees);
(ii) Segregation of duties;
(iii) Reporting lines; and
(iv) Responsibilities;
(d) Descriptive information on the performance-linked incentive structure for approved personsG (including but not limited to remuneration policies, executive compensation and stock optionsG );
(e) Nature and extent of transactions with related parties (as defined by AAOIFI and IFRS as appropriate see also PD-1.3.23(d));
(f) Approval process for related party transactions;
(g) Information about any changes in the structures (as mentioned in Subparagraphs PD-1.3.10(a) to PD-1.3.10(c) above) from prior periods;
(h) The communications strategy approved by the Board (including the use of the bank's website) which should perform at least the following:
(i) The disclosure of all relevant information to stakeholders on a timely basis in a timely manner; and
(ii) The provision of at least the last three years of financial data on the bank's website;
(i) Distribution of ownership of shares by nationality;
(j) Directors' and senior managers'G trading of the bank's shares during the year, on an individual basis;
(k) Distribution of ownership of shares by directors and senior managersG , on an individual basis;
(l) Distribution of ownership of shares by size of shareholder;
(m) Ownership of shares by government;
(n) The Board's functions — rather than a general statement (which could be disclosed simply as the Board's legal obligations under various laws) the 'mandate' of the Board should be set out;
(o) The types of material transactions that require Board approval;
(p) [This Subparagraph was deleted in April 2016 and requirements are now included in Subparagraph (a)];
(q) Board terms and start date for each term for each director;
(r) What the board does to induct, educate and orient new directors;
(s) Election system of directors and any termination arrangements;
(t) [This Subparagraph was deleted in April 2016 and requirements moved to Subparagraph (w)];
(u) [This Subparagraph was deleted in April 2016 and requirements moved to Subparagraph (w)];
(v) Whether the board has adopted a written code of ethical business conduct, and if so the text of that code and a statement of how the board monitors compliance;
(w) Minimum number of Board committee meetings compared with the actual dates and number of board and committee meetings, individual attendance of each director and the work of committees and any significant issues arising during the period;
(x) Reference to Module HC and any amendments subsequently made by the CBB, including explanation and nature of any non-compliance with Module HC in accordance with Paragraph HC-A.1.8;
(y) Review of internal control processes and procedures;
(z) Directors responsibility with regard to the preparation of financial statements;
(aa) Board of Directors — whether or not the board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution;
(bb) Bahraini Islamic bank licenseesG must maintain a website. Overseas Islamic retail bank licenseesG must provide a link on their website in Bahrain to the website of their parent bank;
(cc) Descriptive information on any investor/ consumer awareness programmes for information on new products and services;
(dd) Information on any mediation and advice bureaus for investors and customers set up by the bank, including clearly written procedures for logging of complaints;
(ee) Social functions and charitable contributions of the bank;
(ff) Descriptive information on the governance arrangements, systems and controls employed by the bank to ensure Shari'a compliance and on how these meet applicable AAOIFI standards, and if there is less than full compliance, an explanation of the reasons for non-compliance;
(gg) How non-Shari'a-compliant earnings and expenditure occur and the manner in which they are disposed of; and
(hh) The annual zakah contributions of the bank, where relevant;
(ii) Aggregate remuneration paid to board members;
(jj) Key features and objectives of the remuneration policy of the bank for board members, Shari'a Board and senior managementG as well as the frequency of review of the remuneration structure and the extent to which the policy is applicable to foreign subsidiariesG and branches; and
(kk) Aggregate remuneration paid to senior managementG .
Amended: April 2016
Amended: January 2014
Amended: October 2012
Amended: July 2012
Amended April 2012
Amended January 2012
Amended April 2011
Amended October 2010
April 2008
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