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STATEMENT OF CORPORATE GOVERNANCE
Introduction
The Board of Directors, hereinafter referred to as “The Board”, and the management of RoyalStar Group of Companies (RSHL or the Company) believe that good Corporate Governance is essential to the effective, efficient and prudent operation of the Company's business. Therefore, the Company has implemented an internal control environment, which contains strong Corporate Governance Structures and Procedures.
The Company's Corporate Governance system is based on regular contact between The Board and the management of the Company. It is supported by a high level of management supervision, compliance with all regulations and an annual external audit conducted by a chartered accounting firm.
Mandate of the Board of Directors
The Board supervises the management of the Company's business and affairs with the objective of maintaining the strength, dynamism and integrity of the Company. In particular, The Board oversees the Company's strategic direction and organization structure to reflect these objectives and to serve the interests of the Company, its customers, shareholders, employees and the community.
Responsibilities of The Board include supervising the Company's principal risk management policies and related monitoring systems. The Board monitors the integrity of the internal control systems and oversees the major activities performed by the Company. In addition, The Board appoints the Managing Director.
The Board fulfills its responsibilities and duties in a variety of ways. For example, at least annually, The Board is apprised of internal control and risk management policies related to insurance, credit, investment, legal and reputation risks. In addition, Board Members review the quarterly performance of the Company. Results are compared and measured against a previously established and approved budget and the performance of the previous year. The quarterly performance review includes significant performance ratios, large claims, aging of receivables and review of all compliance requirements.
Throughout the year, The Board conducts meetings where management is invited to make presentations and respond to questions. There are five committees focused on separate areas that meet at least twice annually. The committees are as follows: Audit & Compliance, Conduct Review, Investment, Risk and Administration & Compensation.
The assessment of management’s performance by The Board is based on both quantitative and qualitative factors such as experience, personal performance, leadership ability and the achievement of business objectives. Quantitative criteria primarily relate to the achievement of profit plan targets. Qualitative measures include maintenance of quality customer service standards and business ethics and the preservation of customer protection through compliance with solvency and other regulatory requirements stipulated by the relevant insurance authorities.
The Audit & Compliance Committee reviews any matters referred to in the Internal Control and Business Issues Report issued by the external auditor. In conjunction with The Board, the Audit & Compliance Committee recommends to shareholders the approval of the audited accounts and the appointment of the external auditor. In addition, the Audit & Compliance Committee meets with the external auditor as necessary throughout the year.
The Board of Directors
The Company's Board comprises eight non-executive members, all of whom are senior executives in their respective other businesses, providing vast experience highly relevant to the business of the Company. The knowledge, skill and experience of the Directors are deemed invaluable to the Company.
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