First City Monument Bank: Corporate Governance

Corporate Governance tenets in Nigeria were formally codified in October 2003 by the Securities and Exchange Commission (SEC) and are contained in the publication titled, “Code of Corporate Governance in Nigeria”. The publication outlines a code of best practices for the board of directors of public and privately owned Nigerian companies, shareholders, disclosures and transparency in financial matters including the composition and terms of reference for audit committees.

FCMB’s corporate governance practices are in line with the SEC directive and are reflected in the way we manage to hold the balance between our economic and social interests and between individual and communal goals. It refers to the manner in which our Bank is directed and the laws and customs affecting that direction. It therefore encompasses authority, accountability, stewardship, leadership, direction and control.

One of the reasons for the Bank’s leadership and growing reputation in Nigeria is the fact that it discharges its corporate, social and statutory responsibilities as and when due and has benchmarked itself against international best practices.

FCMB is thus committed to exercising the highest level of corporate governance in adherence to the provisions of corporate governance in Nigeria as codified by the Securities and Exchange Commission (SEC) in October 2003; the Central Bank of Nigeria (CBN) Code of Corporate Governance for Banks in Nigeria - Post Consolidation in April 2006 and global best practice.

Clear strategic goals, corporate values, transparency and accountability are key elements of FCMB’s corporate governance policy.

Other key good corporate governance indicators for the Bank are:

Board Composition and Independence

The Bank’s Board is composed of a non executive Chairman, with executive and non-executive directors, all bringing high levels of competencies and experience, with enviable records of achievement in their respective fields. The Board meets regularly to set broad policies for the Bank’s business and operations, and it ensures that an objective and professional relationship is maintained with the Bank’s auditors in order to promote transparency in financial and non-financial reporting. Directors’ emoluments, as well as their shareholding information are disclosed in the Bank’s Annual Report and Accounts. Members of the Board are experienced professionals of diverse background.

Shareholders’ Rights & Privileges

The Bank through its board of directors ensures that shareholders’ statutory and general rights are protected at all times. The Investor Relations Unit ensures that FCMB’s relationship with shareholders is always healthy and that dividend warrants, share certificates and other relevant information about the Bank are communicated to shareholders regularly. The unit liaises with the Bank’s Registrar to ensure that shareholding matters are given prompt and adequate attention.

Audit Committee

This is established in accordance with Section 359 (3) & (4) of the Companies and Allied Matters Act Cap C20 Laws of the Federation of Nigeria 2004. It comprises dedicated individuals with proven integrity that have a thorough understanding of the Bank’s business affairs, including the associated risks and controls put in place to mitigate those risks. The committee has overall responsibility for the Bank’s internal audit processes.

Risk Management

The Bank has a well structured risk management system in place. Several levels of internal controls and checks ensure that risk assets and deposits are optimally managed.

Risk management structures and processes are continually reviewed to ensure their adequacy and appropriateness for the Bank’s risk and opportunities profile, as well as bringing them up to date with changes in strategy, business environment, evolving thoughts and trends in risk management. Policies are designed to identify and analyse risks, to set appropriate limits and controls and to monitor risks and adherence to limits.

The Bank recently engaged the services of a global management consultant to drive its enterprise risk management project in particular, with respect to the management of the key risks including credit risk, market risk, liquidity risk, operational risk, regulatory risk and reputational risk. The project is expected to improve the bank’s risk management capabilities in line with the Central Bank of Nigeria (CBN) risk based supervision framework, and global best practice.

Code of Conduct

The Bank promotes best practices in all aspects of banking operations, and it is one of the foremost banking institutions to evolve a written Code of Conduct regulating employees’ actions. Each employee of the Bank undergoes training in Business Ethics, and affirms the Code by individually endorsing same.

The code of conduct stipulates the Bank’s values and the minimum standards of good practice required of our people in dealings within the Bank and with parties maintaining relationships with our Bank. The code imposes obligations on all employees to maintain the highest standards of ethical conduct and integrity in all aspects of professional life.