Corporate governance


 

ARARATBANK's corporate governance is an integral system of fundamentals, benchmarks and rules, according to which relationships between bank's shareholders, Council, Executive Board and customers are regulated in the bank.

ARARATBANK built and develops corporate governance system guided by international standards and the best world experience.

ARARATBANK believes that the quality of corporate governance is a keystone of the normal and continuous development of the bank and possible investment attraction, as well as additional surety for partners and investors.

ARARATBANK's corporate governance standards allow to take equally into account advantages of our shareholders, investors and clients, positively influencing on the further development of the bank and on the growth of the consumers' confidence level towards the bank.

ARARATBANK is sure that holding leading places in banking system of Armenia binds over to provide not only the high quality of service rendering process but business culture, social responsibility and high standards of corporate governance as well.

ARARATBANK's corporate governance principles:
Corporate governance includes general management of the bank's activity and is carried out by the General Meeting of Shareholders and the Council of the Bank by means of the Executive Board of the Bank.

ARARATBANK's corporate governance principles:
• Carrying-out requirements of the legislation of RA and internal legal acts of the bank,
• Protection of the rights and interests of the bank's shareholders,
• Equal attitude towards all the shareholders of the bank,
• Allocation of the functions between management bodies,
• Report of the Bank's Executive Board to the Bank's Council and General Meeting of Shareholders of the Bank's Council,
• Control of the Bank's Council over the bank's activities and Bank's Executive Board,
• Availability of the effective system of the Internal Control and Audit,
• Financial and information transparency of the bank,
• Cooperation with investors, bank's clients and other interesting people for the purpose of securing of increase of the bank's value.

ARARATBANK's management bodies Bank's management bodies are:
• Banks Shareholders General Meeting,
• Council of the Bank,
• Executive bodies of the bank - CEO of the Bank (Chairman of the Executive Board) and the Executive Board itself

ARARATBANK's General Meeting of Shareholders is the supreme body in the management of the bank. The only participants of it are:
• Shareholders of the bank's common (ordinary) shares with the number of votes belonging to them as well as name-holders, if they represent entitlements of shareholders of the bank which they introduce and documents validating number of share belonging to them,
• Members of the Council, members of the Executive bodies with the right of advisory vote,
• Members of the Bank's Internal Audit Department - as observers,
• Person implementing external audit of the bank - as observer (if his or her report is presented among the questions on the agenda of the Meeting),
• Representatives of the Central Bank - as observers,
• Other managers and employees of the bank - by the decision of Council.

The bank's annual meeting is summoned by the decision of Council within 6 months after the end of every financial year.
Beside annual meetings the extraordinary meetings can be summoned for discussion of urgent questions.

ARARATBANK's Council carries out the general management of the bank's activities and consists of minimum 5 and maximum 15 members. Members of Council are elected during the annual meeting by the present shareholders of the bank and in case of the premature termination of powers Council members are elected during the extraordinary meeting by the present shareholders of the bank.

Citizens of Republic of Armenia or citizens of foreign countries, whose background meets requirements set by the laws of Republic of Armenia and legal acts of the Central Bank, can be members of the Council. Members of the Council and members of the executive bodies cannot be related persons. Term of office of Council members is 5 years while there is no limitation for being reelected for the position.
Head of the Council is elected by the members of Council.
To raise its working efficiency the Board of Directors has set up committees inclusive of Board members and other management bodies of the Bank acting as observers.
1. Corporate Governance and Personnel Management Committee:
Composition and activities regulation
2. Audit and Risk Management Committee:
Composition and activities regulation
During its activities the Board of Directors may involve other specialists of the Bank if necessary.
Day-to-day operations of the bank are headed by executive bodies of ARARATBANK, which are Executive Board and CEO. The members of executive bodies are appointed by the decision of the Council.
Executive bodies of the bank must necessarily include CEO, Deputies of CEO, Chief Accountant, Heads of Legal Department, Credit Department, Department of Strategy, Methodology and Risk Assessment as well as Heads of other departments appointed by the Council.

At least once in quarter CEO presents report concerning his or her activities to the Council in accordance with the form and order set by the Council.

The principles of the managerial activity appraisal

Appraisal of the Banks executive body is reserved to the Banks council.

Evaluation of performance is done in accordance with the Banks charter, based on the results of quarterly reports to the Banks council.

Banks executive body appraisal is done based on the achievements planed in the prospective development program, different results anticipated by the annual budget (value of assets, credit portfolio and net income, return on the banks assets and capital).

In the process of evaluation also the following criteria are considered:

• CAMELS indicator

• Corporate Governance implementation in the bank

• Application of internal policies and acts

• Implementation of the risk management policy

• HRM policy

• Effective management and strategic development

ARARATBANK's Head of Internal Audit Department and members of that department are appointed by the Council. Members of the bank's executive bodies, other managers and employees as well as persons related to executive bodies cannot be members of the Internal Audit.

As of 31.12.2016, there are 913 employees in ARARATBANK.

In case of any discrepancies between the two language versions of the published information, the Armenian version shall prevail.
 
 

 




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