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Board Governance

1.Independence Criteria – Although banks are exempted from the mandatory application of the SCA's Code of Corporate Governance, the Bank continues to refer to the SCA Code as well as international best practices, with regard to Directors' independence. 
2.The independence criteria on which we determine whether a director is independent or not is set out in the Bank’s board charter which can be found here. The Board considers that a Director is independent if neither himself nor any of his first degree relatives have been a member of the Senior Management of FAB during the last two years or has a relationship that creates any financial transactions or deals with FAB or any of its subsidiaries totaling a value of 5% of the paid-­‐up capital of FAB, or exceeds AED 5 million (or an equivalent amount in a foreign currency, whichever is less). 
3.The primary purpose of assessing independence is to ensure that the director can meet his fiduciary obligations to act in good faith and with loyalty in the best interests of the company, unfettered by any concerns over potential conflicts that might interfere with a judgment call on matters that fall within the Board’s oversight.
Board Continuing Education – The demands placed on board directors is greater than ever before. It is critical that directors have the information and understanding of the external and internal environment that could affect the quality of their decision making. The Board views continuing education as an important development tool. As a result, senior management has recently arranged a host of key board related topics as part of a continuous program of board continuing education provided outside the forum of the official board meetings.  The Bank also provides directors with opportunities to refresh and develop their skills and knowledge through relevant external seminars.
Board Self-Assessment - The performance of the Board and its committees is critical to the success of the Bank. Post-merger, we have re-introduced a process of Board self-assessment, having regard to the Central Bank UAE draft regulations and standards on corporate governance and international best practices. This is designed to assess the composition and mix of skills on the Board. It also assesses how the Board has performed in the year with a view to identifying how the Board has met its obligations. This includes its contribution to the Bank’s strategy and also assesses the dynamics of the Board to identify areas that may require improvement.
Board Remuneration - The Federal Law N.32 of 2021 regarding the Commercial Companies on 20-September-2021Article 171 requires that the Articles of Association shall state the method of calculating the remuneration of the members of the Board, provided that it shall not exceed (10 %) of the net profits of the ending financial year after deducting all the depreciations and reserves. This is covered in the Bank’s Articles of Association – Article 56.
Succession Planning – This is key to good governance and sustainable performance throughout our Bank. The Board has oversight of FAB’s succession planning processes including the appointment, training, compensation and performance assessment of the Chair of the Board, Board committee chairs, independent directors, the Group Chief Executive Officer and other senior executives including the heads of the oversight functions. As part of these duties, the Board also assesses expectations and corporate goals and objectives for the Group Chief Executive Officer and assesses potential successors to the role. 
Conflicts of Interest – The ability to exercise unfettered judgment is the foundation of high quality decision making. The Board has a Code of Conduct (the “Code”) that requires directors to disclose any actual or potential conflicts that could compromise their objectivity or independence on a particular matter. In such cases the concerned director would not form part of the discussion or voting on the matter in question. The Code also provides guidance on potential areas of conflict such as gifts and hospitality, employment of family members, bank facilities, fair, accurate and timely disclosure and setting the tone for ethical behavior. In addition the Board Charter limits the number of active directorships that a Board member can engage in, to enable the director to devote the necessary time to the performance of his duties. 

First Abu Dhabi Bank

First Abu Dhabi Bank P.J.S.C

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