MAURITIUS Law and Practice Contributed by: Valerie Bisasur, Jean-Vincent Dacruz and Shane Mungur, BLC Robert & Associates
Senior Management The CEO is responsible for day-to-day opera - tions and for the implementation of the corpo - rate objectives approved by the board of direc - tors through the senior management. The board sets criteria for measuring the CEO’s perfor - mance in achieving the approved objectives on an annual basis. The CEO is in turn responsible for implementing a performance and account - ability regime for senior management. The senior management should implement business strategies, risk management systems, risk culture, processes and controls for manag - ing the risks to which the financial institution is exposed and concerning which it is responsible for complying with laws, regulations and inter - nal policies. This includes comprehensive and independent risk management, compliance and audit functions, and an effective overall system of internal controls. Senior management should recognise and respect the independent duties of the risk management, compliance and internal audit functions and should not interfere in their exercising of such duties. Senior management is responsible for delegat - ing duties to staff. It should establish a manage - ment structure that promotes accountability and transparency throughout the financial institution. Compliance While the board has the ultimate responsibility for ensuring compliance, the management must establish the parameters of the compliance pol - icy and its modus operandi. This would include identification of compliance risks and how these must be managed throughout the organisation. The compliance function must be independent from the management to avoid any undue influ - ence or obstruction. To be effective, the com - pliance function must have adequate authority,
resources, independence and importance in the organisation. The compliance function should report directly to the board of directors or to a committee of the board. Internal Audit Every financial institution should set out the mandate of internal audit. The purpose of the internal audit is to provide independent assur - ance to the board and senior management on: • whether the internal control system is effec - tive and adequately mitigates risks; and • whether the organisational goals are met and corporate governance processes are efficient. The head of internal audit department should not be responsible for any other function within the bank. External Auditors Banks must appoint a firm of auditors (approved by the BoM) at each annual meeting. The firm of auditors must be independent, experienced in the auditing of financial institutions and have the adequate resources to carry out its duties. A firm of auditors cannot be responsible for the auditing of a bank for more than five continu - ous years. The firm of auditors must prepare an annual report. The board of directors should ensure that the external auditors: • maintain high standards of professional con - duct; • have complete independence from the man - agement with no possible influence; • have no conflicts of interest with the bank or a related party; and • bring to their attention any matters that require urgent action.
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