CODE OF CONDUCT FOR DIRECTORS

Transcription

1 CODE OF CONDUCT FOR DIRECTORS INTRODUCTION Sterling Bank Plc (the Bank ) is committed to conducting its business in accordance with applicable laws, rules and regulations, and the highest standards of business ethics and international best practices. This Code of Conduct (the Code ) reflects the business practices and principles of behaviour that support this commitment. The Board of Directors of the Bank (the Board ) is responsible for setting the standards of conduct contained in this Code and for updating these standards as appropriate to reflect legal and regulatory developments and requirements. The Code is intended to provide guidance in recognizing, and assist in dealing with, ethical issues. It is also intended that the Code will help to foster a culture of honesty and accountability. Every Director is expected to read and understand this Code and its application to the performance of his or her duties, functions and responsibilities. No provision in this Code should be taken as overriding any requirement of applicable laws and regulations in relation to the rights of the Bank s shareholders, the Board and the Bank itself. 1. Every Director must:- (i) Represent the interest of the shareholders of the Bank; (ii) Exhibit high standards of integrity, commitment and independence of thought and judgment; (iii) Dedicate adequate time, energy and attention to ensure the diligent performance of his/her duties including making all reasonable efforts to attend Board or Committee meetings; (iv) Take decisions objectively in the interest of the Bank; and (v) Comply with every provision of this Code. The Chairman of the Board shall administer this Code and the Directors, without prejudice to the provisions contained herein, may make any report or complaint provided for in this Code to the Chairman. 2. COMPLIANCE WITH APPLICABLE LAWS In the discharge of their duties and responsibilities, Directors must comply with all applicable laws, rules and regulations, including the following (as amended, restated and/or supplemented): 2.1 Banks & Other Financial Institutions Act Cap B3 Laws of the Federation of Nigeria ( LFN ) 2004; 1

2 2.2 Companies & Allied Matters Act Cap C20 LFN 2004; 2.3 Investments & Securities Act 2007; 2.4 Code of Corporate Governance for Banks and Discount Houses issued by the Central Bank of Nigeria ( CBN ); 2.5 Code of Corporate Governance for Public Companies issued by the Securities and Exchange Commission ( SEC ); and 2.6 Listing Requirements issued by The Nigerian Stock Exchange ( NSE ). 3. CONFLICT OF INTEREST 3.1 Directors must avoid conflict of interest in the discharge of their duties to the Bank. Directors should also be mindful of, and seek to avoid, conduct which could reasonably be construed as creating an appearance of a conflict of interest. While Directors should be free to make personal investments and enjoy social relations and normal business courtesies, they must not have any interests that adversely influence the performance of their duties, functions and responsibilities as Directors of the Bank. A conflict of interest can arise when a Director or a member of his immediate family receives improper personal benefits as a result of his or her position as a Director of the Bank. A conflict situation can also arise when a Director takes an action or has an interest that may make it difficult for him or her to perform his or her duties, functions and responsibilities objectively and effectively. 3.2 While this Code does not attempt, and indeed it would not be possible to describe all conceivable conflicts of interest that could develop, the following are some examples of situations, which may constitute conflicts of interest: (i) (ii) (iii) (iv) (v) Working, in any capacity, for a competitor, customer, supplier or other third party while serving on the Board of the Bank. Competing with the Bank for the purchase or sale of property, products, services or other interests. Improperly directing business to a supplier owned or managed by, or which employs, a relative or friend. Accepting bribes, kickbacks or any other improper payments for services relating to the conduct of the business of the Bank. Buying or selling, or otherwise dealing in Securities of the Bank which are offered to the public for sale or subscription if such 2

3 Director has information which he knows is unpublished Price Sensitive Information in relation to those Securities. For the purpose of this Code, the term Securities means debentures, stocks, shares, bonds or notes issued or proposed to be issued by the Bank. (vi) Where a Director, being in possession of confidential and Price Sensitive Information not generally available to the public, utilises such information to buy or sell Securities for his or her personal benefit or shares that information with others who may use it as the basis for trading in the Bank s Securities. 3.3 For the purpose of this Code, Price Sensitive Information means information which if made available to the market would likely have a material effect on the market price or value of the Bank s Securities and includes: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) Change in the Bank s Accounting Year; Declaration of financial results (quarterly, half-yearly and annually); Issue of securities by way of public offer, rights or bonus issue, etc; Any recommendation or decision that dividends or scrip issues will or will not be made; Profit warnings or a change in the financial forecasts or expectation; Proposed capital raising or restructuring exercise or changes in the capital structure; Giving or receiving notice of intention to make a takeover or merger or acquisition or tender offer or divestment; Any proposed change in the business model or general character or nature of business of the Bank; Any disruption of operations due to force majeure; Any major developments in the Bank s business including major products, contract awards and expansion plans; 3

4 (xi) (xii) (xiii) Any change in voting control or in beneficial ownership of the securities carrying voting control; The death, resignation, dismissal or appointment of a principal officer (includes Directors, Chief Executive Officer, Chief Finance Officer, Chief Compliance Officer, Chief Risk Officer, Company Secretary and Internal Auditor) of the Bank; Litigation or dispute with a material impact; (xiv) Any proposed alteration to the Memorandum & Articles of Association of the Bank; (xv) Any other information necessary to enable shareholders of the Bank appraise the Bank s position and to avoid the establishment of a false market in the Securities of the Bank; and (xvi) Any other information which, if disclosed, in the opinion of the person disclosing same, is likely to materially affect the price of the Securities of the Bank. 3.4 Conflict of interest may not always be clear-cut. Any question on a Director s actual or potential conflict of interest with the Bank should be brought promptly to the attention of the Chairman of the Board, who will review the circumstances and determine a proper course of action, including whether consideration or action by the full Board is necessary. 3.5 If any question arises before the Board as to the existence of a real or perceived conflict, the Board should by a simple majority determine if a conflict exists. The Director or Directors in an actual or potential conflict of interest situation shall not participate in any discussion and/or decision thereon. 3.6 Directors who are aware of any actual, potential or perceived conflict of interest on the part of a fellow Director have a responsibility to promptly raise the issue for clarification, either with the Director concerned or with the Chairman of the Board. 3.7 Notwithstanding the foregoing provisions, a Director may engage in any lawful business transaction with the Bank provided that: (a) the terms of such transaction are properly documented and are at arm s length (that is, the terms of the transaction are not different from the terms that would have applied between independent entities for a comparable transaction); and 4

5 (b) the transaction has been disclosed to, and approved by, the Board. 4. CORPORATE OPPORTUNITY 4.1 Directors shall not: (i) (ii) (iii) compete with the Bank; or take for themselves personally any business opportunities that belong to the Bank or are discovered through the use of corporate property, information or position; or use corporate property, information or position for personal gain. 4.2 Directors must disclose their membership of other boards and they should promptly notify the Board of any prospective appointment to the board of any other company. 4.3 Directors should not be members of boards of companies in the same industry to avoid conflict of interest, breach of confidentiality and misapplication of corporate opportunity. 4.4 Directors must scrutinise on an ongoing basis, within the scope of their competence, all events and changes taking place in the Bank s operations to enable them assess what information requires immediate disclosure in accordance with applicable laws and regulations. 4.5 Directors and their Connected Persons (as defined hereafter) shall not trade in the Bank s Securities, whether directly or indirectly, if they are aware of unpublished Price Sensitive Information relating to the Bank. Similarly, Directors and their Connected Persons shall not pass unpublished Price Sensitive Information in relation to the Bank s Securities to others or recommend to anyone the purchase or sale of any such Securities when they are aware of such information. The foregoing provision shall continue to apply to a Director even after he/she ceases to be a member of the Board. For the purposes of this Code, the term Connected Persons shall include a Director s spouse, relative or the spouse of a relative and other close dependants. 4.6 Directors shall not buy, sell or otherwise trade in the Bank s Securities or procure third parties to trade in the Bank s Securities directly or indirectly in the off trade months of December/January and June/July of each year. 4.7 Without prejudice to the foregoing, Directors and their Connected Persons shall not buy, sell or otherwise deal in or procure anyone, 5

6 directly or indirectly, to deal in the Bank s Securities during a Closed Period or such other period as may be specified by the NSE or SEC from time to time. In this Code, a Closed Period shall commence on the earlier of fifteen (15) days prior to the date of, or the date of circulation of agenda papers for, a Board meeting proposed to consider Price Sensitive Information and shall last up to twenty four (24) hours after the Price Sensitive Information is submitted to the NSE. 4.8 Directors and their Connected Persons must notify the Bank of all dealings, whether directly or indirectly, in the Bank s Securities. The notification must be in writing and shall be made to the Company Secretary of the Bank immediately but not later than the same day on which such dealing occurred. 4.9 In addition to the foregoing, Directors and their Connected Persons shall not buy, sell or otherwise deal in, or procure anyone, directly or indirectly, to deal in the shares or other securities of any other company in respect of which the Directors have unpublished Price Sensitive Information relating to any transaction (actual, contemplated or discontinued) involving the Bank and that other company. 5. CONFIDENTIALITY All Directors must maintain the confidentiality of Confidential Information entrusted to them or disclosed or acquired by them in carrying out their duties and responsibilities, except where disclosure is authorised by the Bank or is required by laws, regulations or legal proceedings. The term Confidential Information includes, but is not limited to non-public information that might be of use to competitors of the Bank or harmful to the Bank or its customers, if disclosed. Whenever feasible, Directors should consult the Chairman of the Board if they believe they have a legal obligation to disclose confidential information. 6. AMENDMENT, MODIFICATION AND WAIVER This Code may be amended, modified or waived only by the Board and must be publicly disclosed if required by any applicable law or regulation. 7. SANCTION Where a Director has been found to breach the provisions of this Code, the Director shall, upon a simple majority vote of the Board, be asked to resign his appointment and vacate his Board seat. Where such Director refuses to resign, a formal report of the activities of the Director 6

7 and the decision of the Board thereon shall be made to the CBN and to the SEC. 8. EFFECTIVE DATE This Code is effective this 9 th day of October, 2014 and supersedes any previous policy or code of conduct of the Bank in this regard. 9. CERTIFICATION I, the undersigned hereby confirm that I have received, read and understood the Code of Conduct for Directors of the Bank. I hereby undertake to be bound and abide by its provisions Name: Signature: Date: 7