BOARD CHARTER
Transcription
BOARD CHARTER
BOARD CHARTER Prepared by; Mazars, Certified Public Accountants (K). th 3 Floor, the Greenhouse, Suite 8, Ngong Road, P.O. Box 61120-00200, NAIROBI, KENYA. Phone: 254-20-3861175/76/79 Fax: 254-20-3861169 Email : [email protected] Website: www.mazars.co.ke JULY 2012 Table of Contents 1. Background ........................................................................................................................................... 3 2. Purpose of Charter ................................................................................................................................ 3 3. Purpose of the Board ............................................................................................................................ 3 4. Roles and Responsibilities .................................................................................................................... 5 5. Membership and Term .......................................................................................................................... 5 6. Board Committees ................................................................................................................................ 7 7. Board/General Manager Relationship ................................................................................................... 7 8. Board Culture ........................................................................................................................................ 8 9. Independence of Directors .................................................................................................................... 8 10. Reporting and Resolutions ................................................................................................................ 9 11. Indemnity ......................................................................................................................................... 10 12. Review of Charter ........................................................................................................................... 10 Page 2 of 10 1. Background Kenya Medical Association SACCO is a Savings and Co-operative Society registered by a handful of medics in 1998 to serve as a vehicle for mobilization of Savings and provision of credit facilities principally for medical doctors in Kenya. KMA SACCO was initially housed at the KMA housing Cooperative Offices until November 2004 when it employed its first staff and relocated to its own office within the Old KMA building along Kyulu Road at Upper Hill Area of Nairobi. It’s currently based at the New KMA building along Ragati Road – Upper hill. Vision To be the leading SACCO for doctors in the provision of Innovative Financial Services Mission To bring together doctors, their spouses and employees and build a financial services firm that provides savings opportunities, credit facilities, investments and innovative financial services in order to improve their social and economic welfare Core Values • Integrity, • Professionalism, • Prudence, • Team Work and, • Fairness. 2. Purpose of Charter The Board Charter herewith sets out the role, responsibilities and rights of the Board of Directors (“the Board”) of KMA SACCO Limited. The conduct of the Board is also governed by the bylaws of the SACCO as may be amended as provided therein. Some of operational matters relating to the Board such as composition, number of meetings per year, notification of interests, election of directors and functions of critical committees (Supervisory and Credit) are governed by the amended by laws of the SACCO (Articles 45 to 61) and are not reproduced here. 3. Purpose of the Board The Board has two broad purposes, compliance and performance: I. Compliance; It is expected that the board will ensure that the SACCO conforms with and/or exceeds all legal requirements. Compliance activities are divided into; Legal; • Overseeing the monitoring of members’ and office bearers’ compliance with the bylaws. Page 3 of 10 • • • Compliance with directors’ responsibilities as set out on the SACCO bylaws and various national legislation, Compliance with national laws and, Overseeing contractors compliance with contract terms for major projects Accountability; • • II. Design and monitoring effective financial systems and, Design and monitoring effective internal control systems Performance; “Ensure the organization performs to its best potential” This will be achieved through the following key roles; Strategy and policy formulation; • • Formulate/approve Vision/mission and ensure it is embedded into the organizations operations and, Draw/approve strategic plan and policies which shall be monitored and kept in review regularly. Accountability; • • • • Oversee overall performance of the organization in terms of financial performance and goal achievement, Oversee an effective system of Board evaluation and formulate systems for successful overall organization planning, Formulate effective reporting and monitoring systems for reporting outcomes to stakeholders and, Formulate effective performance evaluation and appraisal of the General Manager. Public Relations; • • • • • • • Ensure effective representation of the organization and participate in appropriate board level activities, Ensure timely and accurate dissemination of appropriate information to stakeholders, Ensure projection of a strong and positive image of the SACCO, Promotion of the SACCOs vision, Facilitation of both internal and external cohesion and unity of purpose, At all times ensure that the interests of stakeholders are protected and At all times ensure that board members speak with one voice regarding Board decisions. Risk management; • • Ensure timely and effective risk profiling and management strategy and, Design effective monitoring systems for the loan portfolio and other critical risks. Page 4 of 10 4. Roles and Responsibilities The Board has delegated authority for the operations and administration of the organization to the General Manager. It should not have, and must resist the temptation to get involved in, the operational conduct of organization’s business activities and delivery of services. Its role is confined to setting and reviewing policy. The functions of the board are to: a) Provide effective leadership and collaborate with the executive management team in: Articulating the organization’s values, vision, mission and strategies, Developing strategic (direction) plans and ordering strategic priorities and, Maintaining open lines of communication through the organization and with external stakeholders on the values, vision, mission and strategies Developing and maintaining an organizational structure and correct platform to support the achievement of agreed strategic objectives, Monitor the performance of the General Manager against agreed performance indicators, Review and agree the business (action) plans and annual budget proposed by the executive management team, Monitor the achievement of the strategic and business plans and annual budget outcomes, Establish such committees, policies and procedures as will facilitate the more effective discharge of the board’s roles and responsibilities, Draw the terms of reference for such sub-committees including their composition, operational rules, and functions and reporting frameworks, Ensure, through the board committees and others as appropriate, compliance obligations and functions are effectively discharged, Initiate a board self-evaluation program and follow-up action to deal with issues arising and arrange for directors to attend training courses, seminars and participate in development programs as the board deems appropriate, Ensure that all significant systems and procedures are in place for the organization to run effectively, efficiently, and meet all legal and contractual requirements, Ensure that all significant and probable risks are adequately considered, mitigated and accounted for by the executive management team and, Ensure that organization has appropriate corporate governance structures in place including standards of ethical behavior and promoting a culture of corporate and social responsibility. Establish expenditure approval mandates for the board and management. This shall be detailed in a board resolution and communicated to management. The board shall keep such mandates under review depending on new circumstances and demands that may arise from time to time. Appoint an internal auditor and set out related terms of reference. Make necessary recommendations to the AGM in regard to appointment of auditors. • • • b) c) d) e) f) g) h) i) j) k) l) m) n) o) 5. Membership and Term The amended bylaws provides for a maximum of nine directors and a minimum of five directors (With quorum limits of seven to transact business at meetings). The Board consists of both executive and non-executive directors. Page 5 of 10 Directors must be free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the SACCO. Membership of the Board shall be disclosed in the annual report including whether a director is independent or not independent. The board shall be constituted in accordance with the tenure provisions and guidelines set out in the amended bylaws. 6. Executive Officers The Executive officers shall comprise of the Chairman, Vice Chairman, Treasurer and Honorary Secretary. The Executive officers shall be the official signatories to all documents, cheques, instruments and contracts of the Society and such other signatories authorized by the Board. All correspondence shall be addressed to the Chairman. 6.11 Chairman and Vice-Chairman a) The Chairman shall preside at all General Meetings, Annual General Meetings and the Board. b) The Chairman shall generally manage the Society giving directions and guidance. c) The Vice Chairman shall perform the duties of the Chairman during his or her absence. 6.12 Honorary Secretary The duties of the Honorary Secretary shall include: a) b) c) d) 6.13 To ensure that minutes of the Board Meetings are prepared and circulated on time. To ensure that the Society's correspondence is properly and correctly attended to. To ensure that notice of the meetings are circulated on time. To generally carry out such administrative duties as directed by the Board. Treasurer The duties of the Treasurer shall include: a) b) c) d) e) Generally to manage, or cause to be managed the affairs of the Society in a competent manner. To ensure that a proper record is kept of all monies received and paid out by the Society; its assets, liabilities, capital reserves, and its income and expenditure. To ensure the safekeeping of the Society's money, securities and Common Seal. To ensure that all payments and expenditures are duly authorized. To ensure compliance with all directives of the Board and the Commissioner. Within 15 days after the close of each month, the Treasurer shall cause the preparation and submission to the Board and a financial statement showing the conditions of the Society at the end of such a month, and shall promptly post a copy of such monthly financial statement in a Page 6 of 10 conspicuous place for the information of the members. He/she shall prepare and forward to the Commissioner such financial reports as the Commissioner may require. 7. Board Committees The board shall set up the committees as provided for in the SACCO bylaws and others that may become relevant as the organization grows. The following diagram provides the hierarchy of committees established in terms of functional reporting and authority. 8. Board/General Manager Relationship The board delegates routine day to day running and management of the SACCO to the General Manager. The General Manager reports to the board or other committees established by the board in accordance with the reporting systems and framework set out by the board. The General Manager shall not purport to represent the board unless such approval has been granted. Page 7 of 10 The General Manager shall execute overall policy direction of the operations of the organization for; • • The efficient and effective operation of the organization, and, Bringing material and other relevant matters to the attention of the Board in an accurate and timely manner. 9. Board Culture The Board shall always actively seek to have an ‘engaged culture’ which is characterized by candour and a willingness to challenge. The following points provide an illustration of key aspects that constitute an ‘engaged culture’ of which the board shall collectively and individually strive to attain. Agendas • The agendas of the Board limit presentation time and maximize discussion time. • There are lots of opportunities for informal interactions among Board members. Norms • Board members are honest yet constructive. • Members are ready to ask questions and willing to challenge leadership. • Members actively seek out other members’ views and contributions. • Members spend appropriate time on important issues. Personal beliefs • “If I don’t come prepared, I will be embarrassed.” • “If I don’t actively participate, I won’t be fulfilling my responsibility.” • “I’ll earn the respect of fellow Board members by making valuable contributions and taking responsibility for what I do.” • “If I can’t carry my load, or if I can’t agree with what’s going on, I should resign.” Values • Serving the stakeholders by actively participating in governance. • Collective responsibility to various stakeholders. • Personal accountability for what goes on within the organization. • Responsibility for maintaining the organization’s stature in the sector. • Individual respect for each member. 10. Independence of Directors Independent Directors are those who have the ability to exercise their duties unfettered by any business or other relationship and are willing to express their opinions at the board table free of concern about their position or the position of any third party. It is not possible to draft a list of criteria which are appropriate to characterize, in all circumstances, whether a director is independent. It is the approach and attitude of each director which is critical and this must be considered in relation to each director while taking into account all other relevant factors, which may include whether the director; Page 8 of 10 a) Has, within the last three years, been employed in an executive capacity by the SACCO, b) Has, within the last three years, been a principal of a material professional adviser or a material consultant to the SACCO or an employee materially associated with the service provided, c) Is a material supplier, or an officer of or otherwise associated directly or indirectly with, a material supplier, d) Has any material contractual relationship with the SACCO other than as a director, e) Has served on the board for a period which could materially interfere with the ability to act in the best interests of the SACCO, f) Is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the ability to act in the best interests of KMA. The board shall set out materiality thresholds to be taken into account when considering the independence of directors. Independence guidelines must be applied with common sense. Directors, themselves, are best able to determine if they have an interest or relationship which is likely to impact on their independence. As such, each director is expected to advise the chairman immediately if he/she believes they may no longer be independent. Should the chairman or any other director have any concern about the independence of a director, they must immediately raise the issue with that director and, if the issue is not resolved, with the Board. Further; a) Should the chairman have any concern about his/her own independence, he/she must immediately raise the issue with the board. b) Each director must immediately disclose to the chairman (with a copy to the secretary) all information relevant for determining whether the director is independent, including details of situations that compromise or may be deemed to compromise such independence. c) In the preparation of the agenda for each board meeting, the chairman and secretary need to be sensitive to disclosed interests and consider whether it is appropriate to withhold part or all of an agenda item (including any relevant papers) from any director because of a potential or actual conflict. If the chairman decides to withhold part or all of an agenda item from a director, he/she must advise the director at the time of dispatch of the relevant board paper. d) Directors are to inform the chairman prior to accepting any new appointment to any entity’s board e) Where the independent status of a director is lost, this is to be disclosed to the board and any vacancy arising be filled in accordance with the bylaws. 11. Reporting and Resolutions Proceedings of all meetings are minuted and signed by the chairman/vice chairman of the board. Minutes of all Board meetings are circulated to directors and approved by the Board at the subsequent meeting. Resolutions are first put to the Board in draft form (as a “Board Paper”) and, once passed, are recorded in the minute book. A resolutions register should be kept where all important resolutions are filed for quick reference. Extracts of important operational resolutions and approvals shall be made, signed and communicated to relevant SACCO staff in a timely manner. Page 9 of 10 The minute book and the resolutions registers are confidential documents that should always be kept secured and safely kept. Written Resolutions; a) Are not to be forwarded to directors until they are approved by the chairman (and the directors are to be informed that the chairman has approved the proposed resolution); b) Are to be sent to all directors; c) Are not to be implemented if any director advises that they have any reservations about the proposed resolution (in which case the matter is to be considered at the next board meeting); and d) Are not to be implemented until: i. Assented to by at least half of the directors, or ii. If the chairman considers it appropriate, assented to by all the directors. 12. Indemnity Each director shall be indemnified by the SACCO to the fullest extent permitted by law for his/her actions performed within the mandate of the board. Each director is entitled to; a) b) c) d) Access to board papers, Confidentiality, All approved resolutions and minutes and, SACCO records and documents that facilitate his/her decision making role within the mandate of the board. 13. Review of Charter This charter shall be reviewed when and if the board deems necessary to ensure it remains consistent with the board’s objectives and responsibilities. Page 10 of 10