Corporate governance

Corporate governance plays a pivotal role in the success of any company irrespective of the
kind and nature of business. Corporate govarnce is of great importance to financial
institution as it is treat as the back home of financial system. The essential four pillars of
strong corporate governance are responsibility, fairness, accountability and transparency.
Corporate governance helps in establishing system in which directors are entrusted with the
duties and responsibilities of the company`s affairs.
Corporate Governance at MCB refers to rights and responsibilities among different
stakeholders of the Bank through a set of rules, policies and practices keeping focus on
proper delegation, transparency and accountability in the organization as a whole. The
success of the Bank relies on its proven track record in upholding high standards of
corporate governance. Board composition The Bank encourages representation of
independent directors, non-executive directors and directors representing minority
interests on its board of directors.
Casual Vacancies on the Board of Directors
No casual vacancy occurred on the Board of Directors during the year 2017. Detail of Board
Meetings held outside Pakistan: During the year 2017, all the Board of Directors meetings were
held in Pakistan. Number of Board and sub-committee meetings held and attendance by each
Director
Board committees
The Board has eight sub-committees as given below:
1. Audit Committee;
2. Business Strategy & Development Committee;
3. Human Resource & Remuneration Committee;
4. Risk Management & Portfolio Review Committee;
5. Committee on Physical Planning & Contingency Arrangements;
6. IT Committee;
7. Compliance Review and Monitoring Committee; and
8. Write-Off and Waiver Committee;
Audit Committee
Meetings held:5
Composition:
1. Mr. Ahmad Alman Aslam – Chairman
2. Mr. Muhammad Ali Zeb
3. Mr. Samir Iqbal Saigol
4. Mr. Nor Hizam bin Hashim
Terms of Reference
The main terms of reference of the Committee are: Determination of appropriate measures to
safeguard the bank’s assets. Reviewing annual and interim financial statements of the bank,
prior to their approval by the Board of Directors, focusing on:
• Major judgmental areas;
• Significant adjustments resulting from the audit;
• The going concern assumption;
• Any changes in accounting policies and practices;
• Compliance with applicable accounting standards;
• Compliance with listing regulations, other statutory and regulatory requirements; and
• All related party transactions. Reviewing preliminary announcements of results prior to
external communication and publication. Facilitating the external audit and discussion with
external auditors of major observations arising from interim and final audits and any matter
that the auditors may wish to highlight (in the absence of management, where necessary).
Reviewing Management Letter issued by External Auditors and management’s response
thereto. Ensuring coordination between the internal and external auditors of the Bank. Making
recommendations to the Board of Directors, the appointment of external auditors, their
removal, audit fees, the provision of any service permissible to be rendered to the Bank by the
external auditors in addition to audit of its financial statements. Reviewing scope and extent of
internal audit, audit plan, reporting framework and procedures and ensuring that the internal
audit function has adequate resources and is appropriately placed within the bank; Reviewing
Performance appraisal of Group Head - Audit & RAR, jointly with the President & Chief
Executive Officer; Audit Committee may recommend to the BOD for its consideration for
removal of Group Head – Audit & RAR. Consideration of major findings of internal
investigations of activities characterized by fraud, corruption and abuse of power and
management’s response thereto; Ascertaining that the internal control systems including
financial and operational controls, accounting systems for timely and appropriate recording of
purchases and sales, receipts and payments, assets and liabilities and the reporting structure are
adequate and effective; Reviewing the Bank’s statement on internal control systems prior to
endorsement by the Board of Directors and internal audit reports.
Instituting special projects, value for money studies or other investigations on any matter
specified by the Board of Directors, in consultation with the Chief Executive Officer (“CEO”)
and to consider remittance of any matter to the external auditors or to any other external body;
Determination of compliance with relevant statutory requirements; Review of arrangement for
staff and management to report to Audit Committee in confidence, concerns, if any, about
actual or potential improprieties in financial and other matters and recommend instituting
remedial and mitigating measures. Monitoring compliance with the Listed Companies (Code
of Corporate Governance) Regulations, 2017 and identification of significant violations
thereof; Consideration of any other issue or matter as may be assigned by the Board of
Directors.