Corporate governance

Establishment of an efficient corporate governance system is one of the main courses of our activity. 

Beginning from 2007, TuranBank, as an integral part of the institutional development, commenced the activities on establishment and application of corporate governance system, in accordance with the "Regulations on the Application of Corporate Governance Standards in Bank" of the National Bank of the Republic of Azerbaijan and Basel Committee Guidance "On Enhancing Corporate Governance for Banking Organizations", and taking into account good international corporate governance practice.

One of the most important measures taken by the bank in the field of corporate governance was the development of the Code of Business Ethics and corporate behavior in May 2009.

Effective corporate governance is an important part of our identity. We ensure the responsible, value-driven management and control of TuranBank through our system of corporate governance, which has four key elements: good relations with shareholders; effective cooperation between the Management Board and Supervisory Board; a system of performance-related compensation; and transparent, timely reporting.

To strengthen the confidence entrusted to it, the Bank practices good corporate governance and constantly monitors and improves its governance programmers to maintain the highest standards in banking.

Supervisory Board

Supervisory Board consists of 5 person including chairman of the SB

Members of Supervisory Board are selected among the shareholders by voting by show or secret voting of General Meeting of Shareholders for 4 years. The members of SB can be reselected. Criteria for selection of members of SB are as follows:

Chairman and members of SB

  1. Must be shareholder of the bank
  2. Must have background in economics, business or law
  3. Must have at least 1 year experience in management of financial institution. If they do not have such an experience in financial institution by way of exception they can be manager of non-financial organization with at least 1year experience.

Management Board

The Board of Management comprises 5 members including the Chairman. In general, The Management Board is responsible for conducting the business affairs of the Bank while adhering to the statutory requirements under which the Bank is governed. They are also responsible for granting approval for annual accounts, the annual budget, strategic plan, the annual action plan and reviewing financial performance on a regular basis. The Board oversees the granting of approvals relating to key appointments, staff promotions, major capital expenditure, investment and credit. The Members have free access to all information pertaining to the affairs of the Bank.

Chairman and members of Management Board:

  1. Must have at least 3 years experience in bank or analogous financial institutions
  2. Must have background in economics, business or law
  3. Professional knowledge and experience in the field
  4. Managerial and teamwork skills
  5. Purposefulness
  6. Creativity, communicative

Management Board meetings must be held at least once in a month. Extraordinary meeting are called by the chairman or one of the members of the Board.

Compliance and Transparency

TuranBank is committed to maintaining transparency in all its dealings. The Bank complies strictly with Azerbaijan banking legislation and International Accounting Standards and relevant regulations to ensure accountability. Strong internal compliance measures have been integrated into the Bank's daily operations. In accordance with IFRS, financial statements are published annually financial results are published in the national newspapers every quarter in compliance with the requirements of the National Bank of Azerbaijan.

Committees

Audit Committee

In addition to the above, the Committee also reviews the Bank's compliance with the relevant statutes, rules, regulations and circulars.

This Committee comprises 3 members. 

Risk Management Committee

The Risk Management Committee is responsible for using an Integrated Risk Management approach in managing risks to meet TuranBank's risk management system. These risks include Strategic, Credit, Market, Liquidity, Operational, Legal and other risks that may affect the Bank's performance. The Committee also sets clear risk management measurement guidelines to effectively limit the Bank's overall risk at an acceptable level.

Strategic Planning Committee

The Board holds overall responsibility for determining the strategic direction of the Bank. The Strategic Planning Committee comprises the corporate management team. The Committee is entrusted with the task of implementing the strategic business plans and annual budgets of the Bank, which include specific business goals and financial performance targets. Management provides progress reports for review by the Board, which keeps track of actual performance against limits and targets set out in the budget. This year, the Committee implemented various actions to comply with the Strategic Business Plan.

Asset and Liability Management Committee (ALCO)

The Asset and Liability Management Committee is responsible for monitoring, assessing and managing the assets and liabilities of the Bank and its related risks. This Committee is headed by Deputy Chairman and consists of four members.

HR Committee

The committee is headed by a member of Supervisory Board and comprises 4 members. The committee develops and reviews human resources policies and approves staff appointments and remuneration. The committee meets on a need basis.

Credit Committee

Credit Committee of TuranBank is structured as 2 sub-committees: Small Credit Committee (for loans up to 100 000 AZN) and the Major Credit Committee (loans up to 250 000 AZN). Loans from 250 000 AZN is reviewed by the Supervisory Board. The functions of both committees include appraisal and approval of credit applications based on limits set by the board and monitoring.

Internal Control

The Bank has established adequate internal control procedures to safeguard the assets of the Bank. The Board regularly reviews these control procedures and measures are taken when necessary to renew and update them. The Audit Division of the Bank is responsible for ensuring the adequacy of internal control procedures and makes regular recommendations on improvements.

 
 
Azerbaijan Corporate Governance Project 

In the result of the endeavors to apply in the bank the best practice in the field of the international standards of corporate governance, on 5 June 2009, the International Financial Corporation joined the Phase 2 of the Azerbaijan Corporate Governance Project. Beginning from that month, the experts of the IFC have held interviews with the management and structural units of TuranBank and the phases of the application of the best corporate governance practice in the bank, as well as the measures to be taken for this purpose have been determined. The following measures are intended to be taken in various fields of activity of the bank within the framework of the two-year project:

  • Developing Corporate Governance Code
  • Establishment of the post of Corporate Secretary and conduction of training for the person to be appointed to the post
  • Development of the Conflict of Interest and Related Party Transactions Policy
  • Consultation on Risk Management
  • Development of Information Disclosure Policy and improvement of the practice in this field
  • Development of Sustained Performance Policy
  •  Development of Dividend Policy

Furthermore, the bank's Action Plan include a number of other measures such as amending the By-laws on General Meeting of Shareholders, taking measures for getting the activity of the General Meeting of Shareholders closer to the best practice, taking measures for getting the activity of the Supervisory Board closer to the best practice, providing recommendations for getting the activity of the Management Board closer to the best practice, providing recommendations on the activity of Internal Committees, etc.         

From the point of view of implementation of the action plan intended to be carried out from 2010, the next 2010 year is expected to be a year of busy and intensive activity.   

TuranBank, for the purpose of strengthening the trust of the customers and stockholders towards the bank, intends to achieve high standards in the banking sector in the next years as well. 
 

Working hours:
Mon. - Fri. (9:00 - 18:00)
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