Sustainability

Corporate Governance

The scene on the inner face of the rear wall of Kom Ombo temple is particularly fascinating since it depicts what archaeologists believe are representations of surgical instruments.

We at CIB believe corporate governance is built on a set of concrete principles and values that aim to not only gain investors’ trust, but also sustain it. Based on this belief, we have for years now consistently followed numerous codes and values derived from the core of corporate governance best practices. In fact, CIB laid out the foundations of good governance many years ago, which have now come to form the framework around which our five-year plan revolves.

Striving for the best interests of our shareholders guides everything we do, and we have established a sound reporting system that ensures the dissemination of material information in a timely, transparent and accurate manner. The Bank continues to uphold its mandate of creating value for its shareholders, something we are firmly committed to in the present and in the future.

We take pride in our strong corporate governance structures, which include an experienced team of senior management professionals, competent Board committees as well as a distinguished group of non-executive directors, who believe mandated laws and rules that govern business activities can never be substituted for ethical behaviour and voluntary compliance.

CIB’s highly qualified Board of Directors (BoD) is supported by internal and external auditors, as well as other internal control functions (Risk, Compliance, and Internal Audit) and effectively utilises the work carried out by those functions to ensure the Bank adheres to international best practices of corporate governance.

Board of Directors

CIB prides itself on its strong, renowned BoD that provides the Bank with the necessary leadership and experience to manage its business with integrity, efficiency and, most importantly, excellence.

The Board primarily focuses on long-term financial returns and the best interest of all stakeholders, whether they are customers, shareholders, employees or members of the communities in which the Bank operates. The Board’s role is to set the Bank’s long-term strategy and provide proper oversight. It establishes the appropriate tone at the top, oversees management and long-term performance, reviews financial planning and audit process, ensures risk oversight and compliance, sets compensation and performance goals and manages director nomination, evaluation and succession planning. It oversees our economic, social and environmental sustainability, performing its duties with entrepreneurial leadership, sound strategies and risk management oversight to ensure risks are assessed and properly managed.

CIB’s Board is composed of eight members, with a diverse knowledge base and a balanced skill set that gives the Bank a distinct competitive edge. The directors meet at least six times per year to discuss matters that are important to shareholders. Over the course of 2016, CIB’s BoD met seven times. Being the single largest shareholder in CIB, Fairfax Financial Holding Ltd, through its wholly owned subsidiaries, currently holds 6.65% of CIB’s local shares on the back of its transaction with Actis in May 2014 and has one representative on the Board.

Mr. Hisham Ezz Al-Arab

Chairman and Managing Director

Mr. Hisham Ezz Al-Arab has led CIB since 2002 as Chairman and Managing Director. Under his leadership, CIB expanded its leading position, grew its market capitalisation from EGP 1 billion to EGP 84.3 billion and developed from a wholesale lender into the full-fledged financial institution it is today. His vision transcended financial performance to include the adoption of best practices in corporate governance, risk management and building a modern banking culture. With these efforts, CIB’s stock is now viewed by the international investment community as a proxy stock for Egypt and the benchmark for its banking industry.

As Managing Director, Mr. Ezz Al-Arab along with the excellent and competent CIB Chief Executives and Management Team bring decades of experience and thought leadership that guide CIB’s direction in addition to overseeing the day-to-day tasks of managing the Bank.

While directing this effort, Mr. Ezz Al-Arab is personally responsible for ensuring adequate and effective governance of the Bank through managing the Risk, Compliance and Legal Departments.

In June 2016, Mr. Ezz Al-Arab received Euromoney’s Award for Excellence for his “Outstanding Contribution to Financial Services in the Middle East”. In January 2015, he was awarded EMEA Finance African Banking Award’s “Best CEO in Egypt and Africa Region” for the year 2014 in recognition of the distinguished success of CIB in the banking sector under his leadership.

Mr. Ezz Al-Arab is the Chairman of the Board of Trustees of the CIB Foundation. He has also been a Director at MasterCard Middle East and Africa’s Regional Advisory Board since June 2007, in addition to being a principal member of the American Chamber of Commerce. For his distinguished work, he was elected as a member of the Board of Trustees for the American University in Cairo in November 2012. In March 2013, Mr. Ezz Al-Arab was also elected as Chairman of the Federation of Egyptian Banks. In February 2014, he became a member of the Institute of International Finance Emerging Markets Advisory Council – EMAC. Prior to joining CIB, Mr. Ezz Al-Arab led a reputable banking career as Managing Director of international investment banks in London (Deutsche Bank, JP Morgan and Merrill Lynch), Bahrain, New York and Cairo.

Dr. Medhat Hassanein

Non-Executive Board Member

Dr. Medhat Hassanein is a PhD, DUP (Distinguished University Professor) and Professor of Finance and Banking with the Management Department of the School of Business at the American University in Cairo and a former Minister of Finance (1999-2004). Dr. Hassanein obtained his BA in Economics from Cairo University (with Honours) and holds an MBA from New York University (with Distinction) and a PhD from Wharton School, University of Pennsylvania, US.

Dr. Hassanein was the senior economist of the Projects Department of the Arab Fund for Economic and Social Development in Kuwait – a regional development fund operating according to the rules of the World Bank and servicing all developing Arab countries. During his term with the fund, he participated in the financing of infrastructural, agro-industrial, industrial and agricultural projects. Thereafter, he was promoted to Director of the fund’s Technical Assistance Department.

Dr. Hassanein then joined the Arab Investment Bank in Egypt as the Director of the Investment Sector in charge of project finance, asset management and private equity transactions of the Bank. After his service with the Arab Investment Bank, he was offered the position of President of the Egyptian Gulf Bank in Egypt (commercial bank).

Dr. Hassanein is a senior policy analyst with vast experience in institutional building, macro-policy analysis, financial economics, corporate finance and international financial management. He previously served as advisor to the government, high-level advisory bodies and the donor community.

During his term as Minister of Finance, he developed and instituted the second-generation program of the fiscal public policy reforms of the Egyptian government. These included, inter-alia, tax, customs reforms, reviewing the procurement system in government, revising the pension system (pay-as-you-go versus fully funded systems) together with the investment policy of social insurance funds, introducing public expenditure reviews and performance-based budgeting, building and designing policies for the formalisation of extra-legal entities, securing international and local funding packages for the appraisal and implementation of national projects, developing a program for the corporatisation of public economic authorities, setting a program for the management of government cash flow, effecting the public debt-management function through introducing Egypt’s debut Eurobond issue in international financial markets, in addition to the implementation of the primary dealers system and national debt equity swaps.

He has authored numerous articles and government reports on topical issues in economics, fiscal and monetary policy, finance and banking, macroeconomic reforms, privatisation, capital markets and the extra-legal economy in Egypt.

Dr. Hassanein was a member of the UN’s high-level Commission on the Legal Empowerment of the Poor. He was selected among commissioners to be the chairman of Group 4, which is entrusted with the study of Entrepreneurship: Expanding Opportunities for Legally Establishing Business and Fostering Innovative Financial Instruments and Institutions for the Transition from informal to Formal Business.

Dr. Hassanein holds membership in many local and international professional associations. He has served as Chairman and Board Member of banks (investment, commercial and development), public holding companies and private corporations.

Dr. Hassanein has been a CIB Non-executive Board Member and Audit Committee Member since July 2009 and Chaired the Audit Committee in January 2014. He is also a member of the Sustainability Advisory Board and the GCC.

Mr. Jawaid Mirza

Non-Executive Board Member

Mr. Jawaid Mirza is the founder and president of Focalone Consulting Company Incorporation in Ontario, Toronto, Canada. A strong proponent and practitioner of international corporate governance and well-versed in multi-country compliance, Mr. Mirza brings with him over 35 years of diversified experience and a solid track record in all facets of financial, technology, risk and operation management. In mid-May 2013, he joined CIB’s Board and assumed the responsibilities of Managing Director overseeing the daily work of the following areas: Consumer Banking, COO, Finance Group and IT.

He is widely recognised for realigning and returning to excellence and profitability floundering business units and divisions and building collaboration across multiple jurisdictions for business and cultural change. Mr. Mirza has extensive experience as a Director, taking a firm and resolute approach to leading board committees while allowing free and open discussion and keeping a tight rein on proceedings.

Mr. Mirza has a demonstrated ability to lead a business through challenges, removing barriers to drive success and sharpening its competitive edge in all economies and cultures. Having spearheaded numerous mergers and acquisitions, working alongside experts through due diligence to final negotiation, contractual conclusion and blending of multicultural resources, he has proven to be an adaptive leader, intuitive of international business protocol and cultural diversity, with the ability to manage teams crossing multiple geographies.

Over the years, Mr. Mirza has worked with global institutions like Citicorp and ABN AMRO Bank. He started his career in Citibank as a Financial Controller in Pakistan before serving in a variety of senior regional positions in ABN AMRO in Central Eastern Europe, Europe, Central Asia, the Middle East and Africa. He later moved to Hong Kong as Corporate Executive Vice President and CFO responsible for the Asian region and Australia/New Zealand. He has led successful due diligences for acquiring banks in Hungary, Taiwan, Thailand, Germany, France and Pakistan.

Mr. Mirza was a member of the Top Executive Group of ABN AMRO bank, member of ABN AMRO Group Finance Board as well as the Group COO. He also served on the Board of Directors of Prime Bank and ABN AMRO Pakistan Ltd. after the acquisition and integration of Prime Bank. He also served on the boards of non-profit organisations, namely Artistri Sud (Montreal) and Humewood House (Toronto). Mr. Mirza is also a member of the Institute of Corporate Directors, Canada and holds business management degrees from reputable institutions including Queens Business School and Wharton Business School.

Mr. Mirza has been a CIB Non-executive Board Member since January 2014, chairs the Operations & Technology Committee at CIB and is a member of the Risk Committee. He is also a member of the Advisory Board and the GCC.

Dr. Nadia Makram Ebeid

Non-Executive Board Member

Dr. Nadia Makram Ebeid is the Executive Director of the Centre for Environment and Development for the Arab Region and Europe (CEDARE), an international diplomatic position she has held since January 2004. She joined CIB’s Board of Directors in March 2005 and acts as a member of the CIB Foundation’s Board of Trustees.

For five years beginning in 1997, Dr. Ebeid served as Egypt’s first Minister of Environment, becoming the first woman to assume this position in the Arab world. One of her most notable achievements was declaring the River Nile free from polluted industrial wastewater discharge. Proudly, Dr. Ebeid is the Chairperson of CIB’s Sustainability Advisory Board and the Governance and Compensation Committee.

Early in her career, Dr. Ebeid held several managerial posts with the United Nations Development Program (UNDP), the United Nations Food and Agriculture Organization’s regional office for the Near East and the Council for Environment and Development Research. In recognition of her role in environmental policy and advocacy, Dr. Ebeid has been the recipient of numerous awards and distinctions from local and international NGOs and leading institutions and associations.

Dr. Sherif H. Kamel

Non-Executive Board Member

Dr. Sherif H. Kamel is the Vice President for Information Management and is former founding dean of the American University in Cairo’s (AUC) School of Business (2009-2014). Dr. Kamel was associate Dean for Executive Education (2008-2009) and Director of the Management Center (2002-2008). Before joining AUC, he was director of the Regional IT Institute (1992-2001) and managed the Training Department of the Cabinet of Egypt’s Information and Decision Support Center (1989-1992). His experience focuses on investing in human capital and building and managing executive development institutions addressing IT, management, governance, entrepreneurial and leadership issues. Dr. Kamel is a member of the Egypt-US Business Council (2013-present) and a member of the AACSB International Middle East Advisory Council (2015-present). He is an Eisenhower Fellow (2005).

Dr. Kamel holds a PhD in Information Systems from London School of Economics and Political Science (1994) and an MBA (1990) and MA in Islamic Art and Architecture (2013) from AUC. His research and teaching interests include IT transfer to developing nations, IT management, electronic business and decision support systems. Dr. Kamel received a number of organisational leadership awards for serving the IT community from the Cabinet of Egypt (2011), BIT World, Mexico (2000) and Information Resources Management Association, US (1999). He also received AUC’s Distinguished Alumni Faculty Service Award (2014), the UNDP National Human Resource Development Award (2014), the School of Business Leadership Award (2013) and the AUC President’s Catalyst of Change Award for Citizenship and Service (2013).

Dr. Kamel has been a CIB Non-executive Board Member since May 2014 and is a member of the Audit Committee, the Operations & Technology Committee and the GCC.

Mr. Yasser Hashem

Non-Executive Board Member

Mr. Yasser Hashem has been the Managing Partner at Zaki Hashem & Partners since 1996 and was Partner from 1989 to 1996, immediately following his graduation from Cairo University’s Faculty of Law in 1989 with an LL.B. He was admitted by the Egyptian Court of Cassation in 2007 and is a member of the Egyptian Society of International Law and the Licensing Executive Society. The legal skills he has in corporate M&A and capital markets extends to the privatisation of public sector entities, the inception of the private provision of telecom services in Egypt and the promulgation of its laws, which have placed him as a valued veteran of legal practice in Egypt.

With a special focus on corporate law, Mr. Hashem played a major role in the privatisation of public sector entities in Egypt through his support to hundreds of restructurings, capital market transaction incorporations of foreign and domestic companies and advising foreign and local investors on the most efficient vehicles and structures that suit their investment in Egypt.

Mr. Hashem’s legal skills were also extended to the telecommunication sector in Egypt throughout his contribution to the drafting and negotiation of all major telecom licenses, including public pay phones, mobile cellular networks, private data networks and satellite and marine fibre optic cabling. His expertise in the telecom field led to his appointment by Ministerial Decree as Member of the New Telecommunication Act Drafting Committee. He has also been responsible for most of Egypt’s IPOs in the last decade and has reliably represented acquirers in all major tender offers and M&A transactions in Egypt. Furthermore, he has led the largest four major multibillion USD M&A transactions in Egypt after the January 2011 Revolution.

Mr. Hashem has been a CIB Non-executive Board Member since May 2013 and is a member of the Audit Committee.

Mr. Mark Richards

Non-Executive Board Member

As Chairman and Chief Executive of IPGL Ltd., the principle shareholder of Exotix, Mr. Mark Richards brings considerable expertise in navigating frontier and emerging markets, most recently as Partner and Global Head of Financial Services at Actis, one of the world’s leading and most ethical emerging market private equity groups focused on Africa, Asia and Latin America. He has global responsibility for making and leading investments in fast-growth financial services groups and in ensuring good governance. During 11 years at Actis, Mr. Richards was responsible for building many successful companies, including the market-leading Brazilian brokerage XP Investmentos.

He previously spent 18 years at Barclays in senior roles including CFO of the International Offshore Bank, Director of Group Strategy and Head of Group Corporate Development.

With his 29 years of global experience in banking and financial services (including the UK, Africa and Asia), Mr. Richards serves as Non-executive Director for a number of companies, including CIB. He has a first-class degree from Oxford University in modern history and economics.

He completed the Accelerated Development Program from London Business School and Group Level Strategy from Ashridge Management College. He also attended the Leading Professional Services Firms Program at Harvard Business School.

Mr. Richards has been a CIB Non-executive Board Member since March 2014 and chairs the Risk Committee. He is also a member of the Audit Committee and the GCC.

Mr. Bijan Khosrowshahi

Non-Executive Board Member

Mr. Bijan Khosrowshahi joined Fairfax Financial Holdings in June 2009 and is currently based in London, UK. Fairfax is a financial services holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management. Fairfax is listed on the Toronto Stock Exchange.

Mr. Khosrowshahi also represents Fairfax’s interests as a board member in Gulf Insurance Group and Gulf Insurance & Reinsurance Company in Kuwait, Bahrain Kuwait Insurance Company, Arab Misr Insurance Group S.A.E. in Egypt, Arab Orient Insurance Company in Jordan, Gulf Sigorta in Turkey, Alliance Insurance Company in the UAE as well as Jordan Kuwait Bank in London and BRIT Limited in the United Kingdom.

Prior to joining Fairfax, Mr. Khosrowshahi was the President and CEO of Fuji Fire & Marine Insurance Company Limited in Japan. He is the only non-Japanese individual who has been the president of a publicly traded Japanese insurance company. In 2002, Fuji Fire & Marine began a major reform of the company after investment by its major shareholders American International Group (AIG) and ORIX Corporation. Mr. Khosrowshahi was elected President in June 2004 and successfully implemented a turnaround strategy to return Fuji to profitability and growth through taking strategically leading positions within the insurance industry in Japan.

From 2001 to 2004, he was the President of AIG’s General Insurance operations based in Seoul, South Korea where a major restructuring plan resulted in significant revenue and profitability increases through specific product and channel strategies.

From 1997 until 2001, Mr. Khosrowshahi was the Vice Chairman and Managing Director of AIG Sigorta based in Istanbul, Turkey and was involved in negotiating strategic alliances and joint ventures with Turkish conglomerates and working with governmental regulators to improve support for new product introductions for the emerging Turkish insurance market.

Prior to this position, he was Regional Vice President of AIG’s domestic property and casualty operations for the Mid-Atlantic region based in Philadelphia. Mr. Khosrowshahi also held various underwriting and management positions with increasing responsibilities at AIG’s headquarters in New York since joining AIG in 1986.

Mr. Khosrowshahi obtained an MBA in 1986 following an undergraduate degree in Mechanical Engineering in 1983 from Drexel University. He participated in the Executive Development Program at the Wharton School of the University of Pennsylvania in 2003 and is a regular lecturer at universities and insurance institutes.

He has served on the Board of the Foreign Affairs Council and the Insurance Society of Philadelphia. He has also been a council member of USO in South Korea, the Chairman of the Insurance Committee on the American Chamber of Commerce in South Korea and a member of the Turkish Businessmen’s Association. He is also a member of the UK Chartered Insurance Institute.

Mr. Khosrowshahi has been a CIB Non-executive Board Member since October 2014, representing the interest of Fairfax Financial Holdings Ltd. He was nominated by Fairfax to continue serving the company’s interest in CIB for the Board Term 2017-2019. He is also a member of the Risk Committee and the GCC.

Board of Directors’ Committees

CIB’s BoD has eight standing committees that assist the Board in fulfilling its responsibilities. Accordingly, the BoD is provided with all necessary resources to enable them to carry out their duties in an effective manner. Each committee operates under a written charter that sets out its responsibilities and composition requirements and the committees report to the BoD on a regular basis. Separate committees may be set up by the BoD to consider specific issues when the need arises.

CommitteeMembersKey Responsibilities
Audit Committee

Supervising the quality and integrity of CIB’s financial reporting.

Chair:

Dr. Medhat Hassanein

Members:

Dr. Sherif H. Kamel
Mr. Yasser Hashem
Mr. Mark Richards

The Committee’s mandate is to ensure compliance with the highest levels of professional conduct, reporting practices, internal processes and controls. Consistent with the interests of all stakeholders, the Audit Committee also insists on high standards of transparency and strict adherence to internal policies and procedures. In performing its critical functions, the Committee is cognisant of the important role CIB plays in the Egyptian financial sector as a leader in all the areas. The Committee met four times in 2016.

Governance and Compensation Committee

Responsible for CIB’s corporate governance as well as the Board’s performance evaluation, compensation and succession planning.

Chair:

Dr. Nadia Makram Ebeid

Members:

All other Non-Executive Board Members

The Committee is an integral part of the overall responsibilities of the BoD. In line with CIB’s corporate governance framework, it is responsible for establishing corporate governance standards, providing assessment of BoD effectiveness and determining the compensation of BoD members. The Committee also determines the appropriate compensation levels for the Bank’s senior executives and ensures that compensation is consistent with the Bank’s objectives, performance, strategy and control environment. The Committee met four times in 2016.

Risk Committee

Supervising risk management at CIB.

Chair:

Mr. Mark Richards

Members:

Mr. Jawaid Mirza
Mr. Bijan Khosrowshahi

The primary mission of the Risk Committee is to assist the Board in fulfilling its oversight risk responsibilities by establishing, monitoring and reviewing internal control and risk management systems to ensure the Bank has the proper focus on risk. It also makes recommendations to the Bank’s risk strategy and associated limits to the Board. The Committee met four times in 2016.

Operations and IT Committee

Assisting the BoD in overseeing Bank operations and technology strategy as well as operations and technology risk.

Chair:

Mr. Jawaid Mirza

Members:

Dr. Sherif H. Kamel

This Committee is appointed by the BoD and assists members in their oversight of Bank operations and technology strategy, significant investments to support that strategy, and operations and technology risk. The Committee met five times in 2016.

Management Committee

Responsible for execution of the Bank’s strategy.

Chair:

Mr. Hisham Ezz Al-Arab

Members:

CIB Senior Management

This Committee is responsible for executing the Bank’s strategy as approved by the BoD. It manages the Bank’s day-to-day functions to ensure alignment with strategy, effective controls, risk assessment and efficient use of Bank resources. The Committee adheres to high ethical standards and ensures compliance with regulatory and internal CIB policies. The committee also provides the BoD with regular updates on the Bank’s financial and business activities, as well as any key issues. The Committee met 12 times in 2016.

High Lending and Investment Committee

Responsible for asset allocation, quality and development.

Chair:

Mr. Hisham Ezz Al-Arab

Members:

Senior CIB Management

This Executive Committee is responsible for managing the assets side of the balance sheet and keeping an eye on asset allocation, quality and development. As per its mandate, the Committee convened weekly throughout 2016 and met 52 times.

Affiliates Committee

Responsible for steering and managing CIB affiliates.

Chair:

Mr. Hisham Ezz Al-Arab

Members:

CIB Senior Management

The Affiliates Committee reports to the BoD and is responsible for steering and managing CIB’s affiliates. It also acts as a think-tank for setting and initiating all strategic goals related to the Bank’s affiliates. The Committee met five times during 2016.

Shareholders’ Rights

Our General Assembly is the platform where shareholders exercise their voting rights. The Bank’s Annual General Meeting of Shareholders is held in March each year, no later than six months after the end of the company’s financial year. Additional Extraordinary General Shareholders meetings may be convened at any time by the BoD. Shareholders’ consent is required for key decisions such as:

  • Adoption of the financial statements.
  • Declaration of dividends.
  • Significant changes to the Bank’s corporate governance.
  • Remuneration policy.
  • Remuneration of Non-Executive Directors.
  • Discharge from liability of the Board of Directors.
  • Appointment of the external auditor.
  • Appointment, suspension or dismissal of the members of the BoD.
  • Issuance of shares or rights to shares, restriction or exclusion of preemptive rights of shareholders and repurchase or cancellation of shares.
  • Amendments to the Articles of Association.

External Auditor

The General Meeting of Shareholders appoints the external auditor. The Audit Committee recommends the auditor to the BoD, to be proposed for (re)appointment by the General Meeting of Shareholders. In addition, the Audit Committee evaluates the performance of the external auditor. CIB changes auditors every five years to ensure objectivity and the exposure to new practices.