INTRODUCTION

Given the vital role of banks in the Lebanese economy as well as the impact of good governance on the successful standing of these institutions, the following guidelines were developed in adherence with the policies set forth by Banque du Liban, the Banking Control Commission and the Association of Banks in Lebanon. Bank of Beirut’s Corporate Governance is driven by the Board of Directors’ principal responsibility to act in good faith, with prudence and in accordance with a set of values and standards that promote the stakeholders’ interests.

Bank of Beirut (the “Bank”)has been operating in Lebanon since 1963; its current management took the reins in 1993. It is currently one of Lebanon’s leading alpha banks; ranked highly in capitalization level, trade finance and asset management. The Bank targets commercial, retail and capital markets, and its rigorous corporate governance aims to ensure efficient credit, market and operational risk management. Today the Bank exists in nine countries and conforms to strict local, regional, and international regulations.


GOVERNANCE FRAMEWORK

Bank of Beirut faithfully operates under corporate governance policies and practices designed to ensure that the Bank’s performance maximizes long-term shareholder value.

The Governance framework of the Bank is documented in the “Corporate Governance Guidelines” and the charters of the Board Audit and Board Risk Management Committees, all of which are subject to continuous review and fine-tuning as deemed necessary. These guidelines hinge on the evolving needs and expectations of depositors, regulators, investors and the market at large.

The Board of Directors has overall responsibility for Bank of Beirut, not limited to approving and overseeing the implementation of the Bank’s strategic objectives, risk strategy, corporate governance and corporate values; and enforcing adequate, effective, and independent controls. Board authority is presently vested in nine individuals, two of whom are Managing Directors and the remaining seven, non-executive members.

The Board Audit Committee (BAC), promotes compliance with regulatory requisites as well as integrity of financial statements and reports. The main functions of the BAC are to assist the Board in fulfilling oversight responsibilities for

• Proficiency, independence and objectivity of both external and internal auditors,
• Financial reporting and disclosure processes,
• Effectiveness of the internal control systems,
• Review of audit reports issued by internal audit, and
• Ratification of recommended action plans.

The Board Risk Management Committee (BRMC), evaluates and manages all key business risks by administering policies and procedures. Its tasks include

• Formulating a strategy for the assumption of risk and the management of capital that align with the business objectives of the Bank,
• Annually reviewing and recommending to the Board the Internal Capital Adequacy Assessment Process (ICAAP) document,
• Developing an internal risk management framework, and
• Ensuring that the Bank conforms to Basel requirements.

Fourteen other management committees, including the Asset & Liability Committee (ALCO) and the Anti-Money Laundering (AML) & Counter-Financing of Terrorism (CFT) Compliance Committee, focus on specific day-to-day operations of the Bank.

The Bank has established a Code of Conduct Policy divided into six major themes: General Principles, Business Ethics, Confidentiality, Conflicts of Interest, Business Relationships, and Protection of the Bank’s Assets. It is the Board’s prerogative to ensure these tenets are observed by directors, managers, and employees alike.