BANK LEUMI LE-ISRAEL B.M.
The Board of Directors and its Committees*
The Board of Directors consists of 15 directors. Mr. David Brodet is the Chairman of the Board of Directors. The Board is authorized to act through permanent or ad-hoc committees on matters whose delegation to committees is not legally prohibited.
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 committees’ functions and working procedures are defined in detailed internal guidelines, which are updated from time to time. The discussions of the Board and its committees are based on the proposals of the Bank's management.
For further details of the Board of Directors, see the Annual Report of the Bank.
Main details regarding the major permanent committees of the Board of Directors follow:
Credit Committee
The Credit Committee is authorized to approve the grant of credits brought before it, in amounts exceeding a minimum set by the Board of Directors from time to time. In addition, the Credit Committee approves the annual work plan of the loan review function of the Bank.
Composition of the Committee:
The Committee has 8 members, including:
Chairman – Mr. David Brodet.
One external director (as defined in the Companies Law, 1999) ("ED").
One external director (as defined in the Proper Banking Management Directive No. 301 of the Supervisor of Banks) ("External Directors").
The Credit Committee held 31 meetings in 2010.
Administration Committee
The Administration Committee discusses and formulates proposals to the Board of Directors regarding, inter alia: the salary and remuneration policy relating to the Group's employees, including details of the remuneration of the Chairman of the Board of Directors, the Chief Executive Officer and other senior executive officers; regarding candidates for senior positions and makes decisions regarding candidates from among the Bank’s personnel for positions as directors of material subsidiaries. The Committee is also authorized to discuss and formulate proposals to the Board of Directors regarding the Bank’s investment budget.
The Committee is also authorized to approve investments in and the realization of investments in real estate, equipment and computerized systems, for the use of the Bank, in amounts exceeding a minimum 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 Administration Committee also serves as the Corporate Responsibility Committee. In that role, the Committee discusses and formulates proposals to the Board on all issues regarding the corporate responsibility of the Bank and the Group, including the Corporate Responsibility Report of the Bank and the Group. The Committee holds periodic discussions on corporate responsibility strategy and receives reports on the achievement of the goals set in this field.
Composition of the Committee:
The Committee has 8 members, including:
Chairman – Mr. David Brodet.
One ED.
Two External Directors.
The Administration Committee held 16 meetings in 2010.
Financial Statements Review Committee
The Financial Statements Review Committee is authorized to discuss the Bank's draft financial statements, to discuss the provisions for doubtful debts and for legal proceedings and any other issue concerning the financial statements. The Committee's recommendations are brought before the Board of the Directors for approval. In addition, the Financial Statements Review Committee is authorized to discuss issues concerning the accounting and fiscal policy under which the Bank's financial statements are prepared, and is updated on an on-going basis regarding changes in relevant legal regulations.
Composition of the Committee:
All 5 members of the Committee have accounting and financial expertise (a majority of such directors is required), including:
Chairman-Mr. Reuven Adler (ED).
Two External Directors.
The Committee held 9 meetings in 2010.
Audit Committee
The Audit Committee is authorized to approve the work plan of the Internal Audit Division and to propose its approval to the Chairman of the Board. The Committee is also authorized to follow-up the implementation of the plan; to discuss the audit reports of the Chief Internal Auditor, of the external auditors, and of the Supervisor of Banks and to monitor the correction of any deficiencies found in the various audit reports; to discuss and make proposals to the Board of Directors regarding material exceptional events included in the audit findings; to discuss the annual reports of the Bank's ombudsman and to approve the Bank's compliance plan; to approve and propose the appointment, suspension or removal from office of the Chief Internal Auditor; and to discuss, approve and recommend to the General Meetings of stockholders the appointment of the external auditors and to determine their fees. In addition, the Audit Committee is authorized to discuss the Bank's banking insurances for Directors and Officers and to determine policy on the prohibition of money laundering and the prevention of the financing of terror.
The Audit Committee has additional roles regarding the approval of transactions in accordance with the provision of the Companies Law, 1999 and makes proposals as required to the Board of Directors. Additionally, the Audit Committee is authorized to approve transactions with "related persons", in accordance with directive 312 of the Supervisor of Banks.
Composition of the Audit Committee
The Chairman of the Audit Committee and the majority of its members must be External Directors. All of the EDs of the Board must be members of the Committee. 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.
The Committee has 8 members, including:
Chairman – Mr. Reuven Adler (ED).
An additional ED.
Three External Directors.
The Audit Committee held 46 meetings in 2010.
Risk Management Committee
The Committee is authorized to discuss and to make recommendations to the Board of Directors regarding the proposed policy on the exposure of the Bank and the Group to the various risks, including discussion of the quarterly reports on market risks, credit risks, operating risks and legal 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 new activity of the Bank, including the examination of the risks and systems involved in the new activity and regarding the 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 implementation of the Basel II requirements.
Composition of the Committee:
The Committee has 8 members, including:
Chairman – Mr. David Brodet.
One ED.
Two External Directors.
The Committee held 9 meetings in 2010.
Strategy Committee
The Committee discusses the strategic goals of the Bank and makes recommendations to the Board of Directors in this regard.
Composition of the Committee:
The Committee has 8 members, including:
Chairman – Mr. David Brodet.
One ED.
Two external Directors.
The Committee was established on September 2010 and held 2 meetings since then and up to the end of 2010.
Investments Committee
The Committee discusses the investments policy of the Bank and makes recommendations to the Board of Directors in this regard. The Committee is authorized to approve investments of the Bank in the amount exceeding 200 million shekels.
Composition of the Committee:
The Committee has 8 members, including:
Chairman – Mr. David Brodet.
One ED.
Two external Directors.
The Committee was established on September 2010 and held 5 meetings since then and up to the end of 2010.
In addition, there are several permanent committees for special issues such as the Guidelines 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.
The Bank's Policy regarding Prevention of Conflict of Interests
Transactions with related parties, and/or with various entities in relation to which there may exist a potential conflict of interest, are dealt with in accordance with guidelines prescribed by the Board of Directors and the Management, based on legislative provisions and directives of the Banking Supervision Department of the Bank of Israel.
These transactions are subject to a process of disclosure and/or approval, including by the Audit Committee and/or Board of Directors and/or General Meeting of Shareholders, as required. This process includes the annual approval by the Audit Committee, Board of Directors and General Meeting of Shareholders of the framework resolutions. In addition there is a process of disclosure to the Audit Committee and Board of Directors during the year, regarding the relationships that exist between officers and their family members, and other entities.
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*As of March 27, 2011
