10/11/2020

This document summarises the governance arrangements for Gulf International Bank (UK) Limited (“GIB (UK)”).

Overall approach

GIB (UK) believes that an effective governance framework includes:

  • Clearly defined roles and responsibilities across the organisation;
  • Executable and auditable decision making process;
  • Enforceable discipline (e.g. monitoring of compliance with policies and procedures); and
  • Committees taking collegial decisions, based on reporting/escalated information and effective change.

GIB (UK) Corporate Structure

GIB (UK) is a London based wholesale commercial bank and asset manager. It is fully owned by GIB BSC. GIB BSC is a group based in Bahrain with a principal subsidiary in Saudi Arabia and branches

in Abu Dhabi, London and New York in addition to a representative office in Dubai.

GIB (UK) operates a subsidiary UK regulated entity, GIB (UK) Alternative Investment Management Limited, to manage those fund(s) subject to alternative investment management regulation, and two fully-owned subsidiaries. It also has a branch in New York. The GIB (UK) New York branch was established in 1983. It is supervised by the Federal Reserve and its regulator is the Office of the Comptroller of the Currency.

Regulatory Background

GIB (UK) is authorised by the Prudential Regulation Authority (PRA) and regulated by both the PRA and the Financial Conduct Authority (FCA). GIB (UK) is also registered as an Investment Advisor with the US Securities and Exchange Commission. The UK regulators expect firms to have in place clear structures of accountability and delegation of responsibilities for individuals and committees, including checks and balances to prevent dominance by an individual and the right culture driven by the Board and Senior Management.

The FCA handbook of rules and guidance (the “Handbook”) includes a section called Senior Management Arrangements, Systems and Controls (SYSC) to promote effective governance control in firms.

As a subsidiary of a Bahraini Licensee, GIB (UK) also needs to comply with certain Central Bank of Bahrain requirements, in particular those set out in the Financial Crime (‘FC’) and High Level Control (‘HC’) modules of the CBB rule book. The HC module sets out principle and rules, and these have been considered in GIB UK’s governance framework.

Roles and Responsibilities

The Board is ultimately responsible for leading and controlling the organisation and setting its strategy and its culture. It is also ultimately responsible for ensuring that an adequate, effective, comprehensive and transparent corporate governance framework is in place. In accordance with the Articles of Association, the Board has delegated the authority for all day-to-day management and control to the Chief Executive Officer (“CEO”).

Under the UK Senior Management and Accountability regime, the UK regulators authorise those individuals within regulated firms who perform senior management functions, which are roles that have a particular regulatory significance.

GIB (UK) has nominated senior management for a number of Senior Management functions.

GIB (UK)’s Corporate Governance Structure

The Board has established three oversight committees chaired by non-executive Directors to support it. The Board committees are:

  • Audit and Risk Oversight Committee
  • Remuneration Committee; and
  • Nomination Committee

The CEO has established an Executive Committee (ExCo) and a number of Management Committees report into it.

All Governance Committees operate to agreed and documented Terms of Reference stating objectives, authorities and responsibilities.

Board of Directors of GIB (UK) Limited

The Board has ultimate authority for the management and control of GIB (UK). The Board’s primary role is to oversee the activities of executive management.

The Board is largely non-executive to ensure its independence of management and consequently to ensure independent judgement on issues brought before it by executive management.

Audit & Risk Oversight Committee

The purpose of the Audit & Risk Oversight Committee is to review and consider any matters relating to the financial affairs, the effectiveness of the risk control and compliance framework of GIB (UK) and its subsidiary companies to ensure that their remains aligned with the board’s risk appetite, and that the board has the management information it needs. The Committee shall seek appropriate assurances from Management, the Internal and External Auditors, the Chief Risk & Compliance Officer and the Money Laundering Reporting Officer.

Remuneration Committee

The Remuneration Committee is a non-executive committee of the Board. The purpose of the Remuneration Committee is to oversee the design of, and recommend to the Board, an overall remuneration policy for GIB (UK) that is aligned with its long term business strategy, its business objective, its risk appetite, culture, and recognises the interests of relevant stakeholders. It oversees the implementation of, and reviews, remuneration and related policies and the alignment of incentives and rewards with culture.

Nomination Committee

The Nomination Committee is a non-executive committee of the Board. The purpose of the Nomination Committee is to lead the process for Director Appointments, and ensure plans are in place for orderly succession to both the Board and senior management positions, and oversee the development of a diverse pipeline for succession.

Strategy setting, business planning and budgetary control

GIB (UK)’s business strategy is a matter reserved to the Board, and it is informed by strategic planning by the Executive Committee.

The business planning process involves the preparation of plans by the business areas, and submitted to the Board for approval.

Budgets are prepared for each financial year, under the leadership of the CFO.

Regular performance review measures progress against the GIB (UK)’s agreed strategy, strategic goals and business plans.

Employees and temporary staff

GIB UK’s governance framework sets out the firm’s approach to: recruitment, performance appraisal, and development and training for permanent employees and temporary staff.

The Remuneration Policy is reviewed by the Remuneration Committee and approved by the Board on an annual basis.

Policies and Procedures

The Risk & Compliance function keeps an inventory of policies owned by GIB (UK) or by the GIB BSC Group, but applicable to GIB (UK). The inventory sets out the schedule and approach to policy and procedure approvals.