Executive Management Policy

The concept of executive management (operational management) refers to providing sound leadership and prudent guidance that ensures the institution/bank achieves success and continuity in the business environment over the long term. Executive management is responsible for implementing the institution’s strategic objectives and is ultimately accountable for executing the work plans approved by the Board of Directors. It also serves as the link between senior management and the lower levels within the bank.

Successful executive management is a fundamental element in the bank’s success, as it is the authority responsible for organizing and implementing the bank’s policies and managing employees to achieve the highest return. It is capable of proposing and implementing difficult decisions and formulating the necessary plans to accomplish tasks and ensure the bank’s success. Therefore, it is considered the main driver for executing and achieving the set goals and strategies.

Accordingly, executive management focuses on planning for the implementation of a set of objectives defined by the Board of Directors, monitoring the procedures followed for effective execution, and ensuring their alignment with the established goals, in accordance with the policies and strategies. It also addresses problems that arise during execution and contributes to coordinating execution tasks across various departments/units based on the responsibilities assigned to each.

Executive management bears the responsibility for decision-making, relying on multiple factors, extensive knowledge, prior study, and a good understanding of the realities and consequences of each decision and its potential outcomes. This requires experienced and knowledgeable individuals who are responsible for implementation, with clearly defined responsibilities and a division of labor that ensures separation of duties, independence, and impartiality.

Executive management also possesses significant experience in handling various executive decisions made on a daily basis. It requires a certain level of study and academic and cognitive development to help refine executive skills. This experience is characterized by continuity and development. Finally, it should be emphasized that all the contents of this policy are mandatory and must be implemented in full compliance with the prevailing laws and regulations of the Republic of Iraq, particularly the instructions issued by the Central Bank of Iraq

ü  1. Definitions

Corporate Governance of Banks		A comprehensive system of rules that defines the relationships between the Board of Directors, executive management, shareholders, and other stakeholders. Governance covers the system by which the bank is directed and controlled, affecting: the bank’s strategy (including ESG), risk management (including ESG risks), operations, balance between shareholders’ and depositors’ interests, compliance, and transparency in material disclosures.
Board		The Board of Directors of Asia Iraq Islamic Bank for Investment and Finance.
Board Member		A member of the bank’s Board of Directors, either in a personal capacity or as a representative of a legal entity.
Executive Board Member		A Board member who is also part of executive management, supervises daily operations, and receives a monthly salary.
Non-Executive Board Member		A Board member not involved in daily operations, who may have ties to the bank (e.g., shareholder, client, consultant), and receives no monthly salary. Not considered independent.
Independent Board Member		A non-executive member who is free from any relationship or interest with the bank that could affect their objectivity. Fully independent from management and the bank.
Senior Executive Management		Includes senior staff such as the Authorized Director, Deputies, CFO, COO, Heads of Risk, Internal Audit, Treasury, Investment, Compliance, Credit, HR, Admin, AML/CFT, Domestic and International Banking Operations, and other equivalent positions reporting directly to the Authorized Director.
Related Parties		Includes: affiliated institutions and their directors/senior managers, major shareholders (2% or more), their close associates, Board members, the Authorized Director, and any entity they supervise directly or indirectly.
Related Person		As defined in Article (1) of the Banking Law No. (94) of 2004 and IAS 24, including: current/former directors or consultants (within 2 years), the external auditor (during and 2 years after service), and any party under contract with the bank.
Connected Group		A group of individuals or entities with family or significant economic ties.
Stakeholders		All parties with an interest in the bank’s activities, products, services, or profitability, including shareholders, investors, employees, regulators, customers, depositors, borrowers, suppliers, and society at large.
Significant Interest / Qualified Holding		Any individual or entity (or connected group) intending to hold more than 10% of the bank’s subscribed capital must notify and obtain approval from the Central Bank of Iraq at least 10 days in advance.
Major Shareholder		Any person holding 2% or more of the bank’s capital directly or indirectly, or connected groups holding 5% or more.
Control		Exists if a person: owns or controls (directly/indirectly) 25% or more of voting rights, or has the power to appoint the majority of directors or exert significant influence.
Risk Management		A structured process of identifying, measuring, evaluating, and addressing risks based on likelihood and impact, while assigning responsibilities, ensuring continuity, and reporting to relevant authorities.
Conflict of Interest		A situation where the objectivity or independence of a decision is affected by a personal interest—financial or non-financial—of the employee or Board member or their relatives or associates. This includes misuse of assets, related-party transactions, nominations, or setting executive compensation.
General Assembly		The General Assembly of shareholders of Asia Iraq Islamic Bank for Investment and Finance.
Manager		Any person with supervisory authority over a group of employees in the bank.
Bank Capital		Paid-in capital and reserves.
Interested Person		Any bank employee with a direct or indirect personal interest (e.g., ownership or executive/administrative relationship) in a party doing business with the bank.
Financial Interest		Exists if an employee or their relatives or associates own shares or have management roles in any company dealing with the bank.
Fitness and Propriety		Refers to required qualities (honesty, integrity, competence, experience) for Board and executive management members.
Who are Related Individuals		Includes: any bank manager; anyone related by blood or marriage up to the second degree (including adopted or sponsored children or housemates); or anyone with a qualified holding in the bank or related projects.
Strategy		Long-term policies designed to achieve the bank’s goals, whether related to products, markets, resources, or acquisitions. Reflects the bank’s resource allocation priorities.
Business Plans		Action plans and programs across all levels and departments, including defined objectives and timelines, quantitatively measurable targets at a minimum.

ü  2. Senior Executive Management Framework

Composition	Comprised of competent senior bank officials.
Implementation	Responsible for implementing strategies and policies approved by the Board, including environmental, social, and climate strategies per CBI and related regulations.
Authority	Exercises delegated powers and responsibilities in accordance with Board resolutions.
Accountability	Reports to the Board on bank objectives, operations, and the integration of sustainability risks in risk management.
Daily Operations	Leads day-to-day operations and reports to the Board; the Board should not interfere in routine activities.
Planning	Prepares and executes strategic and operational plans, proposing modifications for Board approval and ensuring effective execution.
Compliance	Strictly adheres to applicable laws, regulations, policies, and Board directives.
Recommendations	Advises the Board on matters related to operations, including deposit, loan, and investment management.
Expansion	Reviews and implements Board-approved branch and office expansion plans.
Policies and Procedures	Develops internal policies and procedures for all banking operations.
Organizational Structure	Designs an effective structure defining roles, duties, and responsibilities of executive management.
Finance Function	Ensures quality and effectiveness of the finance function, provides necessary resources, and submits reports to the Board including annual financial statements and interim (quarterly/semi-annual) financial updates.
Internal Controls	Ensures compliance by executive management and staff with internal control systems to safeguard the bank’s assets and maintain sound operations.

Recommend to the Board of Directors an appropriate system for supervising the bank’s risk management, including environmental, social, and governance (ESG) risks, and ensure that the Risk Management Department implements the risk management framework approved by the Board.

 Provide relevant internal and external supervisory authorities with necessary reports and information as needed, and facilitate and support regulatory and supervisory oversight functions.

 Keep up-to-date with developments in banking practices and ensure compliance with international standards in the bank’s activities and operations.

 Submit regular, accurate, and timely reports to the Board of Directors regarding the bank’s strategies, performance, and operational progress.

Establish and maintain complete information records of the bank’s activities for a minimum of seven (7) years, supported by necessary documentation and maintained under a proper archiving system for these documents and records.

 Coordinate and facilitate efforts among various departments to ensure operational efficiency, compliance with defined responsibilities and limits, and to promote integration and coherence.

 Identify human resource needs and ensure appropriate training and development of staff.

 Monitor the bank’s financial position and ensure profitability within the required balance between risk and return in accordance with the bank’s annual plan.

 Regularly review the official website of the Anti-Money Laundering and Counter-Terrorism Financing Office to monitor the list of entities and individuals subject to asset freezing or any additional requirements. The bank must take the necessary actions if a client appears on the designated list.

 Obtain Board of Directors’ approval for appointments to executive management positions.

Conditions Required for Appointment to Senior Executive Management

Candidates appointed to senior executive management positions in the bank must meet the following conditions:

·  Must not be a member of the Board of Directors of any other bank, unless the other bank is a subsidiary.

·  Must be fully dedicated to managing the bank’s operations and must not hold any other employment role.

·   Must hold at least a bachelor’s degree in finance, banking, financial or banking sciences, business administration, finance, accounting, economics, law, sustainability, information technology sciences, or any other related or relevant field connected to the bank’s business.

·   The appointment of leadership positions must be approved by the Central Bank of Iraq.

·  Candidates for executive management positions must submit their CV, supporting documents, academic certificates, experience certificates, certificates of good conduct, and other documents to facilitate obtaining the Central Bank’s approval.

·  Any employee dismissed by the Central Bank may not serve as a board member, authorized director, or authorized chief executive of any other bank or its branches, nor may they hold any administrative or executive management position in another bank.

·        The Central Bank of Iraq must be notified within three (3) days of the resignation or dismissal of any member of the executive management, along with a statement of the reasons for such resignation or dismissal.

·  Any person who served in the executive management of a bank whose license has been revoked or is subject to bankruptcy proceedings may not be appointed to the executive management of the same or any other bank, unless the Central Bank decides otherwise.

·  Must have at least five (5) years of experience in banking or related work, except for the position of General Manager (Managing Director), which requires a minimum of ten (10) years of experience in banking or related activities in the financial sector. This is subject to the instructions issued by the Central Bank of Iraq.

·   Must possess integrity and good reputation.

·   A no-objection approval must be obtained from the Central Bank of Iraq prior to the appointment of any executive management member.

Other Provisions

·   The Executive Management consists of senior officials of the bank.

.The Executive Management exercises its powers and performs its responsibilities in accordance with the delegation and decisions issued by the Board of Directors.

·  It is accountable to the Board of Directors for achieving the bank’s objectives and executing its operations.

·   Members of the Board of Directors are not permitted to interfere in the bank’s daily executive operations.

 

1. Duties of Executive Management

The Executive Management shall undertake the following tasks:

·  Prepare strategic and operational plans and implement them after approval by the Board of Directors.

· Ensure the effectiveness of strategic and operational plans and propose any development or amendments.

·  Implement laws, regulations, related instructions, and the policies and directives issued by the Board of Directors with diligence, integrity, and responsibility.

· Make recommendations regarding key decisions related to banking operations, deposit management, loans, and investments.

·  Review domestic and international banking services and products in terms of requirements and implementation, continuously improve them, and provide recommendations. Review expansion and branch plans.

·  Develop policies and procedures for all areas of operations.

·  Establish an organizational structure that distributes responsibilities and duties among organizational units and defines vertical and horizontal lines of communication.

·  Prepare the necessary annual budgets for the bank.

·  Establish adequate internal control systems to protect the bank’s funds and assets, ensure sound financial practices, and implement these systems.

·  Implement appropriate risk management systems for all types of risks.

·  Provide internal and external regulatory authorities with required reports and information, and facilitate audit and inspection tasks.

· Ensure compliance with international standards in all the bank’s operations and activities.