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The Board of Directors and its Committees

BANK LEUMI LE-ISRAEL B.M.

 

The Board of Directors and its Committees*

 

The Board of Directors currently consists of 15 directors.  Mr. David Brodet is the Chairman of the Board of Directors. 

 

The other Board Members are: Mr. David Avner, Mr. Rami (Avraham) Guzman, Prof. Arieh Gans, Mr. Moshe Dovrat, Mr. Yehuda Drori, Mr. Doron Cohen, Adv. Miriyam (Miri) Katz, Mr. Yoav Nardi, Ms. Zipora Samet, Mr. Haim Samet, Mr. Amos Sapir, Prof. Efraim Sadka, Prof. Yedidia (zvi) Stern and Prof. Gabriela Shalev.

 

The Board acts through, inter alia, permanent or ad-hoc committees, in addition to committees whose establishment is required by law.

 

The Board of Directors committees are composed of directors only, and each committee has at least three members. The composition and functions of the Board of Directors and its committees are determined pursuant to the applicable laws and regulations, including the directives of the Supervisor of Banks.  The Board's and the committees’ functions and working procedures are defined in detailed internal guidelines, which are updated from time to time. 

 

For further details of the Board of Directors, see the Annual Report of the Bank, which is published online on MAGNA, available through the Israel Securities Authority’s website (www.isa.gov.il)

 

The Board of Directors plenary held 44 meetings during 2012.

 

Main and general details regarding the major permanent committees of the Board of Directors follow: 

 

Audit Committee

 

The Audit Committee is authorized to approve and make recommendations to the Board of Directors and to the Chairman of the Board regarding the work plan of the Internal Audit Division and to monitor the implementation of such plan; to discuss the material audit reports of the Chief Internal Auditor, of the external auditors, and of the supervisory authorities and to monitor the correction of any deficiencies found in the various audit reports; to discuss and make recommendations to the Board of Directors regarding material exceptional events included in the audit findings; to approve and to recommend the appointment, suspension or removal from office of the Chief Internal Auditor; to discuss, approve and recommend to the General Meeting of shareholders regarding the appointment of the external auditors; and to discuss, approve and recommend to the General Meeting of shareholders, or to the Board of Directors – if the General Meeting authorizes the Board of Directors to make such determinations – regarding the external auditors’ fees. The committee is also authorized to discuss the annual reports of the Bank's ombudsman.

 

The Audit Committee has additional roles in the areas of auditing and control, including subjects such as compliance, the prohibition of money laundering and the prevention of the financing of terror, and the internal enforcement program for the securities and investment advising field, at the Bank and at the Group. The Committee is also authorized to either approve or not to approve transactions with related persons and transaction in which a corporate officer has a personal interest, pursuant to the provisions of the Proper Banking Directive and the provisions of the Companies Law, 1999, and to make recommendations regarding this matter as required to the Board of Directors. 

 

Since 1 January 2013, and in accordance with the provisions of the Proper Banking Directive issued by the Supervision of Banks Department, the Board of Directors’ Financial Statements Review Committee has ceased to exist and preliminary discussions in anticipation of the approval of the financial statements by the Board of Directors, including discussions of subjects that are required by law to be discussed in this context, are held within the Audit Committee. The Committee therefore holds discussions and makes recommendations to the Board of Directors regarding the draft of the Bank’s financial statements, and regarding the provisions for credit losses, legal claims and regarding any other matter relating to the financial statements. The Committee’s recommendations are presented to the Board of Directors for its approval. 

 

Composition of the Audit Committee

 

The Chairman of the Audit Committee must be an ED pursuant to the Companies Law, and the other two additional External Directors on the Board must be members of the Committee.  A majority of the members of the Committee must be external directors pursuant to the Proper Banking Directive, who are also independent directors pursuant to the Companies Law. The legal quorum for a meeting, and for passing any resolution, is the majority of the members of the Committee, providing that most of them are External Directors.

 

An external director pursuant to the Companies Law is referred to below as an “ED”.

 

An external director pursuant to the Proper Banking Directive who also constitutes an independent director pursuant to the Companies Law is referred to below as an “External Director”.

 

Composition of the Committee:

 

Chairman – Ms. Zipora Samet (ED)

Two additional ED’s.

Three External Directors.

 

The Audit Committee held 46 meetings in 2012. 

 


 

Compensation Committee

 

The Committee was established pursuant to Amendment 20 of the Companies Law, which took effect on 12 December 2012, and its authority is as set out in that Law. The Committee’s main functions are to approve and make recommendations to the Board of Directors regarding the compensation policy as it pertains to the terms of service and employment for the company’s corporate officers, and the updating of that policy from time to time, as well as an examination of the policy’s implementation and the approval of its continuation.

 

In addition, Amendment 20 includes provisions that authorize the Committee to approve specific transactions with corporate officers regarding the terms of their services and of their employment, including transactions that are not in accordance with the compensation policy

 

Composition of the Committee: 

 

Chairman – Prof. Gabriela Shalev (ED)

Two additional ED’s.

One External Director.

 

The Compensation Committee held 4 meetings in 2012.

 


 

Risk Management Committee

 

The Committee is authorized to discuss and to make recommendations to the Board of Directors regarding the proposed policy on risk management, the definition of risk appetite, the documents regarding the exposure of the Bank and the Group to the various risks, including discussion of the quarterly reports on the various risks, before their discussion by the Board; regarding the permitted limits on risk exposures in the various operational sectors and regarding the transactions permitted in such sectors; regarding the organizational preparations of the Bank and the Group for the management and control of the total exposure to the various risks and the examination of appropriate tools for managing such risks; regarding the Bank’s new activity or new products, including the examination of the risks and systems involved in the new activity or product; and  regarding the material findings of risk surveys made by the Bank's management.

 

The Committee is also authorized to discuss the overall framework of the stress scenarios in all the Bank’s risk sectors and the internal evaluation of capital adequacy (ICAAP), and to monitor the area of credit supervision.

 

Composition of the Committee:  

 

Chairman – Mr. David Brodet

One ED.

Two External Directors.

 

The Risk Management Committee held 10 meetings in 2012.

 


 

Credit Committee:

 

The Committee is authorized to approve the grant of credits brought before it, in amounts exceeding a minimum set by the Board of Directors, and under the circumstances set by the Board, from time to time.  In addition, the Credit Committee approves the annual work plan of the Credit review function of the Bank.

 

Composition of the Committee:

 

Chairman – Mr. David Brodet.

One ED.

Two External Directors.

 

The Credit Committee held 25 meetings in 2012.

 


 

Administration, Salary and Remuneration Committee

 

The Committee discusses and makes recommendations to the Compensation Committee and/or to the Board of Directors regarding, inter alia: material changes in the organizational structure, the salary and remuneration policy relating to the Group's employees, the corporate officers and the senior managers, and regarding candidates for senior positions. The Committee also makes recommendations regarding candidates who are not among the Bank’s personnel, for positions as directors of material subsidiaries. The Committee is also authorized to discuss and make proposals to the Board of Directors regarding the Bank’s investment budget.

 

The Committee is also authorized to approve real estate investments and the realization thereof and to give approval for investments (and the realization thereof) in equipment and computerized systems, for the use of the Bank, in amounts that exceed a minimum amount set from time to time by the Board of Directors.  The Committee also authorizes charitable donations within limits set by the Board of Directors.

 

The Committee also serves as the Corporate Responsibility Committee. In that role, the Committee establishes the Bank’s and the Group’s corporate responsibility goals for the coming years, monitors the execution thereof, and discusses the Bank’s and the Group’s corporate responsibility report.

 

Composition of the Committee:

 

Chairman – Mr. David Brodet

One ED.

Three External Directors.

 

The Administration, Salary and Remuneration Committee held 28 meetings in 2012.

 


 

Strategy Committee

 

The Committee discusses and makes recommendations to the Board of Directors regarding the Banks’ vision, its strategic objectives and the measurement thereof and the monitoring of the implementation thereof, the entry into new material fields of activity, and regarding the policy on non-financial investments and nostro investments.

 

Composition of the Committee: 

 

Chairman – Mr. David Brodet

One ED.

One External Director.

 

The Strategy Committee held 2 meetings in 2012.

 


 

Investments Committee

 

The Committee discusses and decides on non-financial investments and the realization thereof, nostro investments and underwriting commitments beyond minimal amounts set by the Board of Directors, and discusses and decides upon the acquisition of subsidiaries, and the establishment thereof, their sale and merger, under certain circumstances.

 

Composition of the Committee: 

 

Chairman – Mr. David Brodet

One ED.

Three External Directors.

 

The Investments Committee held 3 meetings in 2012.

 


In addition, there are several permanent committees for special issues such as the Guidelines Committee, Prospectus Committee and the Committee on Conflicts of Interest, which meet as necessary. The Board of Directors also establishes ad-hoc committees, from time to time, for specific purposes.  

 

 

*As of January 1, 2013