Conflict of Interest Policy
for the Board Members

BBK applies the highest corporate governance standards, which encompasses high levels of business integrity, honesty, accountability and transparency that ensure independence of Board members’ judgment and avoiding any kind of personal or organizational conflict of interest with that of the Bank (BBK) with a view to serve the best interest of the Bank, its shareholders and other stakeholders. This policy is developed taking into consideration the Commercial Companies Law, the Central Bank of Bahrain rulebook and international best practice.

Note: The threshold for materiality for as far as this policy is concerned is BD 100,000

Each member of the Board must understand that under the Commercial Company Law he/she is personally accountable to the Bank and the shareholders if he/she violates his/her legal duty of loyalty to the Bank. A code of conduct is signed by all Board members confirming their approval to avoidance of conflict of interest procedures set out by the Bank. Board members are to exercise the duty of loyalty by avoiding the actions mentioned under clause 4. below and to serve the Bank’s interest in any transaction with a company in which one has a personal interest.

A Board member should be considered to have a “personal interest” in a transaction with a company if:

is a party to the transaction or has a material financial interest in the transaction. (Transactions and interests which are de minis in value should not be included.)

• He/she himself/herself; or
• A member of his/her family (i.e. spouse, father, mother, sons, daughters, brothers or sisters); or (c) Another company of which he is a director or controller;

Each Board member must make every practicable effort to arrange his/her personal and business affairs to avoid a conflict of interest with the Bank. Any decision to enter into transactions, under which Board members would have conflicts of interest that are material, should be formally and unanimously approved by the full Board.

A Board member must:

(i) Not take any benefit from any projects or investments which are managed by the Bank or promoted to its customers or potential customers except for Board related remuneration in the performance of his/her fiduciary duties to the investors of the project/investment (i.e. Director is appointed as member of the Board of special purpose vehicle or other operating companies set up by the Bank for projects/investments). The Director must not receive any commission, fees, shares/consideration in kind or other remuneration of incentives in respect of the performance of the project/investment. Any Board-related remuneration received by the Director must accordingly be declared to the Board on an annual basis.

(j) Members of the Board shall be duly bound to conduct themselves honestly and sensitively with respect to acceptance of certain functions, prerequisites or assignments, which could conflict with the knowledge acquired by them in the performance of their duties as members of the Board of Directors of the Bank. They shall continue to be bound by this obligation after termination of their duties;

(k) Members of the Board shall not allow other direct or indirect professional relationships to affect in any way the conduct or their activities for the Bank, and visa versa. Where a member of the Board of Directors, using his best judgement, comes to the conclusion that he may have a conflict of interest with regard to a decision to be taken by the Board of Directors, he/she shall immediately declare so to the Chairman of the Board or the Group Corporate Secretary. When the Chairman of the Board of Directors is personally involved he shall immediately declare to the Deputy Chairman who will take necessary action.

• Not enter into competition with the Bank;
• Not demand or accept substantial gifts from the Bank for himself or connected persons;
• Not misuse the Bank’s assets;
• Not use the Bank information or take advantage of business opportunities to which the Bank is entitled, for himself/herself or his associates;
• Absent themselves from any discussions or decision-making that involves a subject where they are incapable of providing objective advice, or which involves a subject or (proposed) transaction where a conflict of interest exists;
• Not to use property of the Bank for personal needs;
• Not misuse the Bank’s assets;
• Not to disclose confidential information of the Bank;
• Not to take business opportunities of the Bank for oneself;

Any member of the Board of Directors having declared a conflict of interest concerning a decision of the Board shall leave the meeting room during the time of discussing that subject and if the issue is sent by circulation the concerned Board member shall abstain from voting on the subject.

6.1 Each Board member must on annual basis and on as and when arise basis inform the entire Board of (potential) conflicts of interest in their activities with, and commitments to other organizations or any situation that will give rise to conflict of interest. These disclosure must include all material facts in the case of a contract or transaction involving the Board member.

6.2 If a member of the Board of Director is offered an official or professional position which may give rise to a permanent conflict of interest as regards his duties and responsibilities as a member of the Board of Directors of the Bank, he shall inform the Chairman of the Board or the Group Corporate Secretary and shall seek to ascertain whether accepting such position would be compatible with his duties and responsibilities as member of the Board.

6.3 The Board member must understand that any approval of a conflicted transaction is effective only if all material facts are known to the Board and the conflicted person did not participate in the decision. In any case, all Board members must declare in writing all of their other interests in other enterprises or activities (whether as a shareholder of above 5% of the voting capital of a company, a manager, or other form of significant participation) to the Board on an annual basis.

6.4 All issues of conflict of interest and related party interests/transactions, material contracts or loans involving Board members and Board members interest in the Banks shares are to be disclosed in the annual report of the Bank.

6.5 Board members should declare their first degree relatives that would probably be employees at the Bank prior to employment and the board shall decide on the same.

6.6 Any other disclosures as required by the regulatory authority and as and when required.

The Board shall review and take necessary decisions/measures regarding any case of non-compliance with this policy.