Crystal’s approach to sustainable banking is governed in line with our own stringent principles and standards, while adhering to the requirements of good governance as laid out by the National Bank of Georgia’s Corporate Governance Code for Commercial Banks. We also model our conduct on the high international standards set by the UK Corporate Governance Code. We implement several measures to reaffirm our organisational commitment to strong governance practices as outlined in both codes. We have implemented the “Comply or Disclose” principle, and thus include a full matrix in our Annual Report that outlines and explains Crystal’s adherence to the UK Corporate Governance Code, updated annually.
There is clear separation of governance and senior management at Crystal, and we have robust procedures to mitigate conflict of interest. The full mandate of the Supervisory Board is outlined in the Supervisory Board Policy, which is used to define its role and responsibilities and to regulate its activities. It sets forth procedures, communication rules, and provides guidance on the management of conflicts of interests, as well as rules for the appointment and resignation of members. The Board also undertakes annual self-evaluation exercise.
Detailed reporting on Crystal’s board activity is provided annually in the Annual Report, with specific attention paid to board composition, specific activities throughout the financial year, and any policy updates. Our most recent independent audits were conducted by Deloitte, with KPMG conducting the procedure for the previous three years.
Supervisory Board Committees are as follow:
The Committee is in charge of overseeing HR strategy, performance assessment and the remuneration of Chief Officers as well as the nomination of board members. Nomination of a candidate is founded on the competency-based needs of the board, identified in the course of the evaluation. The Chairman solicits nominations from fellow members of the board or through an open competition. Prior to which, the board defines the selection criteria and thus appropriately assess candidates. The HR, compensation and remuneration committee, based on relevant research and interviews, proposes a candidate for the Supervisory Board to nominate to the shareholders. Following the SB nomination, a shareholder meeting is authorised to appoint a new member of the board, for a maximum duration as defined within the Charter and Shareholder Agreement.
The ALCO, which includes the Chairman (Chair of ALCO), investor representative members of the SB, the CEO, the CFO and the CBO, and they convene on a monthly basis. The purpose of the ALCO is to supervise the assets and liability management process for Crystal, which includes balance and profits, liquidity planning, funding sources, foreign currency mismatch, interest rates, capital adequacy and liquidity risk. The Supervisory Board also discusses reports related macro-economic indicators, market share analysis and reports on business plan implementation. The list of indicators from the annual budget is monitored by ALCO and may be revised by the Supervisory Board if required.
The Risk Committee oversees the entirety of potential risks, except those risks covered by ALCO. The objective of the Committee is to study existing credit and operational risks within the organisation, to inform the board of strategic risks faced by the company, and to provide recommendations for systems and processes to be integrated or improved for managing and reducing risks. The Committee is a consultative body, which does not make decisions, however it reviews and identifies risk related issues, to be further managed by the Management Team and Chief Officers. Additionally, the Risk Committee provides the board with recommendations on managing and mitigating risks.
The objective of the Committee is to ensure the implementation of Crystal’s strategy. The Committee enables the management and the Supervisory Board to focus on strategic analysis and decisionmaking processes. The committee also delivers supervision and implementation of the company’s strategy. The scope of the committee also includes the supervision of innovative projects and the implementation of data transformation strategies.
The objective of the Committee is to define the company’s environmental and social mission objectives and to supervise their implementation. The mandate of the Committee is to outline the principles and activities of the company’s corporate environmental, social responsibility, consumer protection and responsible lending practices, as well as monitor their implementation. The Committee helps the management and Supervisory Board to focus on environmental and social responsibility.
The Committee was created by the Supervisory Board, mainly to promote and assist internal as well as external auditing. The Committee is represented by members of the board and the head of the Internal Audit Department. The goals of Internal Audit Committee are to implement internal auditing processes in Crystal, as well as to monitor financial reporting, internal control systems, and the compliance to legislation and regulations of the management team. This allows the Supervisory Board to access a reliable information, from which they will be able to make more robust and sound governance decisions.