December 21, 2021: VIS Credit Rating Company Limited (VIS) has upgraded the Corporate Governance Rating (CGR) of Allied Bank Limited (ABL) from “CGR-9+” to “CGR-9++”, said a press release issued on Monday.
The rating signifies a very high level of corporate governance. The previous rating action was announced on December 21, 2020.
The corporate governance ratings are based on evaluation of key governance areas of the rated institution, including regulatory compliance, ownership structure, composition and operations of the Board of directors and executive management, self-regulation, financial transparency, and relationship with the stakeholders.
The assigned rating incorporates a well-established corporate governance framework underpinned by effectively functioning Board and Management Committees and strong financial transparency.
Reconstitution of the Board and Board Committees was observed following the Board election. The structure of the Board and Board Committees is in compliance with the governance code.
Overall attendance record of all Committee meetings was satisfactory with a comprehensive discussion on various aspects of the bank. The management team comprises seasoned professionals and has depicted stability over the review period.
The rating takes comfort from a structured succession plan in place resulting in the smooth transition of responsibilities. The rating also factors in further strengthening of control environment with the implementation of Quality Assurance and Improvement Program which focuses on regular monitoring and periodic self-assessments of all Audit and Risk Review functions.
Meanwhile, a dedicated Compliance Committee is responsible for promoting high compliance culture and reporting to the board on the effectiveness of compliance risk management.
Comprehensive risk management practices, sound systems for monitoring and controlling risk exposures, and automation of a wide spectrum of information security and enterprise risks are in place.
Information Technology (IT) governance focuses on alignment of continued IT investments with long-term objectives of the Bank and smooth delivery of business services. Significant emphasis is being placed on alternate delivery channels in order to provide customers digitally and networked banking services and strengthen the cybersecurity defense system.
The Board Remuneration Policy satisfies the SBP’s guidelines and is approved by the shareholders on a post facto basis. The remuneration structure of Material Risk Takers and Material Risk Controllers also fulfills the criteria set out by the SBP; the overall remuneration structure of the Bank is considered in line with the industry standards.
The Bank focuses more on internal elevations, career growth opportunities are offered to all employees through merit-based evaluations, and gender diversity is supported. The Bank makes sufficient and timely financial and qualitative disclosures in the public domain digitally through its official website. The level of financial and qualitative disclosures in the public domain is satisfactory.
Annual reports are fairly descriptive and contain comprehensive disclosures. The institution maintains healthy stakeholder relations and actively engages in social and welfare causes.
Going forward, the management is committed to continuing the alignment of its governance practices with the newly announced SBP Corporate Governance Regulatory Framework and the international best practices.
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