MAURITIUS Law and Practice Contributed by: Valerie Bisasur, Jean-Vincent Dacruz and Shane Mungur, BLC Robert & Associates
Board of Directors The board of directors has a central role in proper governance, as it is responsible for the safety and soundness of the bank; it oversees the business strategy, organisation and govern - ance structure, risk management, compliance and key officers. Some of the salient require - ments are set out below. Composition As a matter of principle, a board must collec - tively possess the necessary qualification and background for a balance of expertise, skills, and adequate knowledge of its business/struc - ture and strengths of the industry, as well as of the regulatory framework. The board should consist of at least five natural persons, 40% of whom must be independent directors (the Guideline defines the term “inde - pendent director”). If the chairperson is a non- executive director, the board must be 50% com - posed of independent directors. Except with the prior approval of the BoM, a non-executive director may serve for a maxi - mum of six years. The chairperson should be an independent director or a non-executive director. The CEO must be a board member but must not be the chairperson. Responsibilities (non-exhaustive list) The board is responsible for the bank’s corpo - rate plan in the short- and long-term, and for the related strategy of the bank (in respect of its business objective, policies, risk management, capital adequacy, liquidity, compliance, controls, communication, staff compensation policies, operation budget) and the related supervision.
It is also responsible for the appointment, monitoring and assessment of the CEO, senior management, subcommittees and/or individual directors in their performance, to achieve the corporate objectives. It ensures that policies, practices, controls and systems are in place and are effective, reviewed and assessed periodically, to: • achieve prudential balance between risk and return to shareholders; and • be compliant with the regulatory framework. It should be independent from the management with a clear demarcation of responsibilities. It implements policies and procedures to identi - fy, redress and perform ultimate decision-taking in respect of conflict-of-interest situations at all levels of the organisation. It protects the interests of the bank, and ensures that decisions of a holding company or head office are not detrimental to the sound and pru - dent management of the bank and the financial health and legal interests of its stakeholders. Board subcommittees The Banking Act requires the boards of directors of banks to establish committees to effectively discharge their responsibilities. The mandates of each committee must be clearly set out and be publicly available. Proceedings of the sub - committees must be reported periodically to the board. The committees should cover at least the following areas: • audit; • conduct review; • risk management; and • nomination and remuneration.
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