Corporate governance presentation

Saira Akhtar Sarah Mashhood Arshian SiddiqueOwais Nathani

Zardar Waseem

Vision

Establish Islamic banking as banking of first choice to facilitate the implementation of an equitable economic system, providing a strong foundation for establishing a fair and just society for mankind.

Mission Statement

To be a premier Islamic bank, offering a one-stop shop for innovative value-added products and services to our customers within the bounds of Shariah, while optimizing the stakeholders’ value through an organizational culture based on learning, fairness, respect for individual enterprise and performance.

Objectives

To develop a committed service culture which ensures the consistent delivery of our products and services within the highest quality service parameters, promoting Islamic values and ensuring recognition and a quality banking experience to our customers.

Introduction

incorporated on January 27, 1997 It started operations as an

investment bank inAugust In January, 2002 in an historic

initiativeMeezan Bank was granted the

nation's first full-fledged commercial banking license dedicated to Islamic Banking, by the State Bank of Pakistan.

Introduction

excellent operating profitability, including a capital adequacy ratio

a long-term entity rating of A+, and a short-term entity rating of A1+, the highest short-term rating

extraordinary research and development capability

The Bank's main shareholders

Pak-Kuwait Investment Company the Islamic Development Bank of

JeddahShamil Bank of Bahrain

Board of Directors (ELEVEN)

H.E. Sheikh Ebrahim Bin Khalifa Al-Khalifa Chairman

Naser Abdul Mohsen Al-Marri Vice Chairman Rana Ahmed Humayun Mohammed Azzaroog Rajab Ahmed Abdul Rahim Mohamed Nawal Ahmed Alaa A. Al-Sarawi Mian Muhammad Younis Mohammad Abdul Aleem Irfan Siddiqui President & CEO Ariful Islam

Board & Senior Management

Strengths

First exclusive Islamic bank.  The largest Islamic Bank in Pakistan with a

network of over 204 branches in 54 cities. And ending this year they have increase his branches in Pakistan to 280 branches.

Strong growth of its Islamic banking SBU. Meezan Bank, the largest Islamic Bank in

Pakistan   Dedicated and professional staff Shariah board of renowned scholars Healthy working environment Strong shareholding

Weaknesses

High charges for different activities such as online or Demand Draft as compared to competitors.

Lack of promotions and advertising of their products and services.

Lengthy & extensive documentation Centralized procedures making process slow Weak marketing strategy, Target market not

identified  offering fewer services than the competitors Risk Averse, approach of Head office. Meezan Bank Limited has no Credit card facility Restricted Shariah based policies

Opportunities

House financing sector can be targeted to maximize the profit. 

Growing demand of Islamic financial product and services. 

Venturing into Islamic groups out side the countries as opportunity to expand business in UAE and Golf states i.e. financial institutions. 

Coming up with. Products for the SME to targeting the medium level customers.

Doing business with companies having Islamic mindset. I-e Islamic financial Institutions.

Increase branch network within the country

Threats

New competitors setting up their Islamic banking sections

High Interest Rate from SBP  SBP has not special policy regarding Islamic

Banking.  Disassociation of Maulana Taqi Usmani from the

Shariah advisory board of Meezan Bank  Govt. policies are mostly for conventional

banking system not for specially designed for Islamic banking.

Fears on the credibility of Islamic banking ethical compliance and monitoring systems.

Responsibility

The responsibilities of the directors, members and the staff are clearly written in:

Articles of Association MemorandumPotential RegulatesBanking Companies Ordinance 1962

(State Bank of Pakistan)

Performance Management Review

(?)

Composition of Board

Executive and Non-Executive Directors

ChairmanVice Chairman PresidentCFO COO CEOSponsor Shareholders are

appointed for the Annual General Meeting

Board and Senior Management Remuneration

No Remuneration Committee

Directors’ Pay according to SBP

Disclosure in the Annual report.

Pay to Senior Executives (C.E.O, C.F.O, and C.O.O).

Board and Senior Management Remuneration

Pay to the non-Executive directors

Disclosure in Articles of Association

Meetings

2/3rd quorum is maintained for board and board committees

Circulating the minutes to other members

Notice of Meeting

Role of Corporate Secretary

Minimum Criteria

No tenure

Responsibilities of Company Secretary

Disclosure of Information

The information is kept to inform the public about the company operations.

It is done through Karachi Stock Exchange (KSE) annually.

Some information is kept hidden fom the public as per company policy.

Board Meetings

Board Meeting in every three months

Agenda Paper

NO SURPRISES

Arrangement of Issues

Annual General Meetings

Formal Meeting in It is a legal requirement for voluntary

organizations that have company status.

It is good practice for charities to have an AGM to act as a review of the year .

Annual General Meetings Although it is a formal meeting, it can also

be a good opportunity to communicate with members, clients, partners and other interested parties.

They also approve the minutes of the previous meeting.

They also undertake a review to ensure that actions decided at meetings have been taken and the recommendations send by the risk management committee also been consider.

Conflict of Interest

Meezan has the policy on the conflict of interests as the transaction made by the directors or management in terms of shares reports to the SECP.

If anyone in the company has the shares of more than 5 % so bank should inform to the state bank of Pakistan (SBP).

Register of Interest

Section 189(1) (c) of the Companies Act requires that after its registration a company must establish an interests register. This is a list of the material interests that the directors have in:

  Businesses with which the company is dealing

  Transactions involving the company.

  Businesses or transactions which may impact on the company in some way.

Register of Interest

The shareholding interest is the important to be disclosed because it differentiates the directors as independent directors.

The organization also maintains the register of interests as every bank does and it is reviewed by the audit committee and chief financial officer (CFO).

It is not necessary for all the members to sign the register.

Register of Interest

HR heads is responsible to review the system.

The organization has a disciplinary committee to see the different mishaps.

They also have a fraud and fraudulent committee.

Voting of Shareholders Meeting

Proxy Guidelines

Case of Vote in Absentia

Resolutions Put before Shareholders Member’s Registrar Proxy / Vote to Attend Member of CDC

Financial Statements

IAS/IFRS & State Bank of Pakistan regulations

Financial Statements are signed by

Consolidated Financial Statements

Maintenance of Accounting Records

Warehouse at Site Area, Karachi

HRMS System for Access/Retrieval

Temenos (T24) for Adequate Security

Board Appointment

No Nominating Committee Recommendations by 3 main

shareholders:

Noor Financial Investment Co, Kuwait Pakistan Kuwait Investment Co. (Pvt.) Ltd.Islamic Development Bank, Jeddah

State Bank of Pakistan

Formal Process

Elected or re-elected after every 3 years

SBP Conducts a Test

Training Program (PICG)

In case of BAD review…

Corporate Social Responsibility

Clear Cut Agenda :

EducationHealth

Corporate Social Responsibility

Examples of CSRQarz e Hasna for Higher Studies

Rehabilitation of Flood-Affectees

Afzaal Memorial Thalessemia Foundation & Others

Corporate Social Responsibility

The Sharia Advisor and Shariah Supervisory Board of the Band are responsible to monitor the process.

An independent trust by the name of Ihsan Trust has been registered as an independent entity for disbursement of Meezan Bank’s charity fund.

Corporate Social Responsibility

During the year, Meezan Bank disbursed a total of Rs. 137.6 million from its charity fund, the highest in the history of the Bank.

During the year, an amount of Rs. 106.309 million was transferred to the Charity account

Charity

During the year, an amount of Rs. 106.309 million was transferred to the Charity account and an amount of Rs. 137.633 million was disbursed from charity saving account after the approval of the Shariah Advisor.

Problems Faced:

In case they do not receive any deposits in the charity account then this could lead to a few problems. It should be noted that there has been no such case in the history of Meezan Bank to this day.

Ombudsperson

A public official is one who acts as an impartial intermediary between the public and government or bureaucracy, or an employee of an organization who mediates disputes between employees and management. Their CCO is the ombudsperson of the company and he acts as the impartial intermediary in this case.

Sexual Harassment Policy

The policies of the company on sexual harassment have been mentioned in a proper document and are shown to all at one point or another so that it is taken care of properly. Women who work come to work wearing an Abaya so they feel safe and secure.

Code of Equal Employment Opportunity

The company follows the code of equal employment opportunity and mentions it everywhere in order to show its equitability in case of pay scale.

External Lawyers

Since they have loads of work and the size of the bank has been on the go for expansion they have not really gotten time or tied up money to arrange for external lawyers.

Instead they have a legal department that takes care of any lawsuits that come their way which are usually about non performing loans and then they also have Remedial Asset Management to work for this purpose.

Appointing external Corporate Governance Advisors

They do not appoint any external corporate governance advisors since they get all the information on regulations on corporate governance from State Bank of Pakistan.

They monitor the bank and its every move vigilantly.

SUCCESSION PLANNING

None in Place