Affiliate: An entity owned by another entity by more than 25% and less than 50% of its capital.
Bank: Any juridical person licensed in accordance with the provisions of the Central Bank Law, to primarily carry on the activity of taking deposits, and any other Licensed Financial Activities.
Board: The Bank’s board of directors.
Central Bank: The Central Bank of the United Arab Emirates.
Chief Executive Officer: The most senior executive appointed by the Board.
Conflict of Interest: A situation of actual or perceived conflict between the duty and private interests of a person, which could improperly influence the performance of his/her duties and responsibilities.
Control Functions: The Bank’s functions that have a responsibility independent from management to provide objective assessment, reporting and/or assurance; this includes the risk management function, the compliance function and the internal audit function.
Controlling Shareholder: A shareholder who has the ability to directly or indirectly influence or control the appointment of the majority of the Board of directors, or the decisions made by the Board or by the general assembly of the entity, through the ownership of a percentage of the shares or stocks or under an agreement or other arrangement providing for such influence.
Corporate Governance: The set of relationships between the Bank’s management, Board, shareholders and other stakeholders which provides the structure through which the objectives of the Bank are set, and the means of attaining those objectives and monitoring performance. It helps define the way authority and responsibility are allocated and how corporate decisions are made.
Duty of Care: The duty to decide and act on an informed and prudent basis with respect to the Bank. Often interpreted as requiring Members of the Board to approach the affairs of the Bank the same way that a “prudent person” would approach his/her own affairs.
Duty of Confidentiality: The duty to observe confidentiality applies to all information of a confidential nature with which a Member of the Board is entrusted by the Bank or which is brought to his or her attention during or at any time after the carrying out of his/her assignment
Duty of Loyalty: The duty to act in the good faith in the interest of the Bank. The duty of loyalty should prevent individual Members of the Board from acting in their own interest, or the interest of another individual or group, at the expense of the Bank and shareholders.
First-Degree Relatives: The individual’s parents, siblings and children.
Fit and Proper Process: The evaluation of a Bank’s proposed members of the Board and Senior Management as to expertise and integrity. The specific fit and proper criteria are listed in article 2.13 of the Standards.
Government:The UAE Federal Government or one of the governments of the member Emirates of the Union.
Group: A group of entities which includes an entity (the ‘first entity’) and:
any Controlling Shareholder of the first entity;
any Subsidiary of the first entity or of any Controlling Shareholder of the first entity; and
any Affiliate, joint venture, sister company and other member of the Group.
Higher Shari`ah Authority: The Higher Shari`ah Authority that was established at the Central Bank by the Cabinet Resolution no. (102/ 1/ و5) 2016.
Independent Member of the Board: A Member of the Board who has no relationship with the Bank or Group that could lead to benefit which may affect his/her decisions. He/she must not be under any other undue influence, internal or external, ownership or control, which would impede the Member’s exercise of objective judgment. The Independent Member of the Board forfeits his/her independence in the cases specified in Article 3.4 of the Standards.
Islamic Financial Services: Shari`ah compliant financial services offered by Islamic Banks and Conventional Banks offering Islamic banking products.
Material Risk Takers: Staff whose work is deemed to have a significant impact on the overall risk profile of the Bank or the Group.
Non-Executive Member of the Board: A Member of the Board who does not have any management responsibilities within the Bank, and may or may not qualify as an Independent Member of the Board.
Pillar 3: Pillar 3 disclosure requirements – consolidated and enhanced framework issued by the Basel Committee on Banking Supervision in March 2017 and any subsequent revisions.
Public Joint Stock Company: A Public Joint Stock Company is a company whose capital is divided into equal and negotiable shares. The founders shall subscribe to part of such shares while the other shares are to be offered to the public under a public subscription. A shareholder shall be liable only to the extent of his share in the capital of the company, as per the Federal Law No. (2) of 2015 on Commercial Companies.
Regulations: Any resolution, regulation, circular, rule, standard or notice issued by the Central Bank.
Related Parties: The Group and its Controlling Shareholder’s Members of the Board and Senior Management (and their First-Degree Relatives) and persons with control, joint control or significant influence over the Bank (and their First-Degree Relatives).
Related Party Transactions: Include on-balance sheet and off-balance sheet credit exposures and claims as well as dealings such as service contracts, asset purchases and sales, construction contracts, lease agreements, derivative transactions, borrowings, and write-offs. The term transaction incorporates not only transactions that are entered into with related parties but also situations in which an unrelated party (with whom a Bank has an existing exposure) subsequently becomes a related party; disclosures must reflect all related party events and transactions for the financial period.
Risk Appetite: The aggregate level and types of risk a Bank is willing to assume, decided in advance and within its risk capacity, to achieve its strategic objectives and business plan.
Risk Governance Framework: As part of the overall approach to corporate governance, the framework through which the Board and Senior Management establish and make decisions about the Bank’s strategy and risk approach; articulate and monitor adherence to the risk appetite and risks limits relative to the Bank’s strategy; and identify, measure, manage and control risks.
Senior Management: The executive management of the Bank responsible and accountable to the Board for the sound and prudent day-to-day management of the Bank, generally including, but not limited to, the Chief Executive Officer, chief financial officer, chief risk officer, and heads of the compliance and internal audit functions.
Subsidiary: An entity, owned by another entity by more than 50% of its capital, or under full control of that entity regarding the appointment of the Board of directors.
Staff: All the persons working for a Bank including the members of Senior Management, except for the Members of its Board.