Audit Committee Composition and Responsibilities
- Composed of board members, including the chairman, preferably with expertise in accounting, auditing, or related financial management.
- Oversees the institution's financial reporting, internal and external audit functions.
- Responsible for establishing the internal audit department and appointing both internal and independent external auditors, who report directly to the committee.
- Monitors the adequacy and effectiveness of internal control systems.
- Requires a written charter specifying authority, duties, and reporting relationships, approved by the board and periodically reviewed.
- Holds explicit authority to investigate matters within its remit, full access to management, discretion to invite directors or officers to meetings, and adequate resources for its functions.
- Conducts at least an annual review of internal controls, including financial, operational, compliance controls, and risk management.
Corporate Governance Committee Composition and Responsibilities
- Assists the board in corporate governance responsibilities.
- Reviews qualifications of all nominees to the board and other board-appointed positions.
- Composed of at least three board members, with two being independent directors.
- Maintains a written charter approved by the board and updated annually.
- Ensures board effectiveness and adherence to corporate governance principles.
- Oversees periodic performance evaluation of the board, its committees, and executive management.
- Conducts annual self-evaluation of its performance.
- Assesses directors’ ability to perform duties considering competence, candor, attendance, preparedness, and participation.
- Adopts guidelines on competing time commitments for directors serving multiple boards.
- Recommends continuing education, committee assignments, succession plans, and remuneration based on corporate and individual performance.
- Establishes objective performance criteria for evaluating the board’s enhancement of long-term shareholder value.
Risk Management Committee Composition and Responsibilities
- Responsible for developing and overseeing the institution's risk management program.
- Composed of at least three board members with expertise and knowledge of the institution's risk exposures.
- Oversees the system of discretionary authority limits delegated to management, ensuring effectiveness and compliance.
- Maintains a written charter approved by the board and periodically reviewed.
- Core responsibilities include:
- Identifying and evaluating risk exposures by assessing probability and potential impact.
- Developing a written risk management plan to manage and control major risks.
- Implementing the plan and communicating it to affected parties, including regular discussions based on management reports.
- Reviewing and revising the plan as necessary to ensure relevancy and effectiveness, considering changing exposures and developments.
- Reports regularly to the board on overall risk exposure, risk mitigation actions, and recommendations for further measures.
Effective Date
- The amendments and requirements contained in this Circular become effective on January 1, 2005.