The Board must provide oversight of Senior Management. It must hold members of Senior Management accountable for their actions and document the consequences if these actions are not aligned with the Board’s expectations. This oversight involves ensuring that Senior Management is adhering to the Company’s values, Risk Appetite and risk culture. Oversight by the Board should include, but is not limited to:
a.
Monitoring Senior Management’s actions to ensure that they are consistent with the strategic objectives and policies approved by the Board and are aligned with the Company’s Risk Appetite;
b.
Overseeing implementation of the Company’s governance framework and reviewing it annually to ensure that it remains appropriate in the light of any material changes to the Company’s size, complexity, business strategy, markets and regulatory requirements;
c.
Overseeing the Company’s adherence to its Risk Appetite and Risk Limits;
d.
Overseeing the Company’s approach to Board and Staff compensation, including monitoring and reviewing executive compensation and assessing whether it is aligned with the Company’s culture and Risk Appetite;
e.
Meeting regularly with Senior Management;
f.
Critically reviewing and challenging explanations and information provided by Senior Management;
g.
Setting appropriate performance and compensation standards for Senior Management consistent with the long-term strategic objectives and the financial soundness of the Company;
h.
Assessing whether Senior Management’s collective knowledge and expertise remain appropriate given the nature of the business and the Company’s risk profile; and
i.
Actively engaging in succession planning for the Chief Executive Officer and ensuring that appropriate succession plans are in place for all Senior Management positions.
2.
The Board should review the Company’s policies and procedures on a regular basis to ensure that they are being implemented by those responsible within Senior Management. The Board should obtain reports from Senior Management in this regard, at least annually.
3.
The responsibilities of the Board in this regard include, but are not limited to:
a.
Determining the Company’s Risk Appetite, taking into account the competitive and regulatory landscape and the Company’s long-term interests, risk exposures and ability to manage risk effectively;
b.
Approving and overseeing the implementation of key policies including, but not limited to, liquidity , capital adequacy, technical provisions and solvency margin;
c.
Overseeing the appointment of the external auditor;
d.
Approving the annual financial statements and requiring periodic independent review of critical areas of the business and internal controls;
e.
Approving the selection of and overseeing the performance of Senior Management;
f.
A Takaful Company must demonstrate full Compliance with Islamic Shari’ah and establish a sound and effective Shari`ah governance framework with key mechanisms and functionalities to ensure effective and independent Shari`ah oversight, as per the requirements of the Takaful Regulation and any other requirements set by the Central Bank and the Higher Shari`ah Authority.