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Board of Directors Duties and Responsibilities

1. The members of the Board of Directors shall be responsible to manage


the affairs of the Company jointly and shall have a general duty to act
with due care in relation to the general management of the Company
2. The Board of Directors of the Company shall exercise the powers given to
them by law, the Memorandum and Articles of Association and
resolutions passed at the meeting of shareholders.
3. The Board of Directors of the Company shall further exercise the
following powers.
- Appoint and dismiss the General Manager of the Company,
determine his powers and duties and decide on his
remuneration.
- Confirm the appointment of principal officers of the Company
recommended by the General Manager and determine their
terms of employment.
- Approve the organizational chart, manpower allocation,
manpower requirements as well as all operational,
administrative and financial manuals of the Company.
- Appoint the signatories to operate any bank account to be
opened in the name of the Company.
- Cause and be responsible to keep regular records of the
management and of meetings.
- Cause and be responsible to keep accounts and books in
accordance with legal requirements.
- Submit the accounts to the Auditors and an annual report of
the Companys operations including financial statement to the
meetings.

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- Convene a general meeting without delay where three quarters
of the capital are lost.
- Set up reserve funds required by law or the Articles of
Association.
- Apply to the court where the Company stops payments with a
view either to a composition with creditors or the winding up of
the Company.
- Borrow money with or without security on behalf of the
Company and designate officials authorized to sign such credit
agreements, deeds, promissory notes on behalf of the Company.
- Invest assets and money of the Company in any investment
activities.
- Sell or dispose of assets of the Company and delegate officials to
effect transfer of ownership on behalf of the Company.
- Negotiate and arrange reinsurance contracts with domestic or
foreign reinsurers and advise the National Bank for approval.
- Undertake such other tasks assigned to it by any shareholders
meetings.

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Duties and Responsibilities of Board Committee Proposed

1. Organization & Human Resource Development Committee

1.1 Review all matters relating to structural arrangement,


manpower development personnel functions, and
communication and control systems and present its
recommendations to the Board of Directors.
1.2 Deliberate on administrative policies such as remuneration,
benefits and incentives schemes and submit its
recommendations to the Board.
1.3 It shall receive, and submit its recommendations to the Board
on management proposals regarding guidelines relevant to all
issues which fall within its area of responsibility.
1.4 The committee shall review the managements proposal for
annual salary increment and Bonus and forward its
recommendation to the Board.
1.5 The committee shall assess the salary and incentives to be
provided to the Chief Executive Officer and present its proposal
to the Board.
1.6 Confirm the appointment of principal officers (Deputies
accountable for the CEO) of the Company recommended by the
CEO and determine their terms of employment.
1.7 The committee shall, whenever necessary, recommend a special
salary adjustment as proposed by the Chief Executive Officer to
favorably respond to competitors move for manpower
attraction.
1.8 It shall recommend for a partial or full review of the salary
structure and benefit schemes.
1.9 Different opinions of a member shall clearly be stated in a
minute with sufficient description and the different opinion
shall then be presented to the Board of further discussion.

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2. Finance & Investment Committee

2.1 Ensure the existence of updated Policy and Procedures of


Finance, Investment & Audit; otherwise initiate preparation of
same.

2.2 Oversees & ensures proper application & implementation of


rules and directives issued by the regulatory body (National
Bank of Ethiopia) or (NBE) and other pertinent laws.

2.3 Evaluate Financial Performance quarterly

2.4 Review the proposal of management in respect of receivables to


be written off.
2.5 Review the annual Financial Statements
2.6 Review study output conducted in relation to long term
investment in which the company will engage and hence
submits same to the Board of approval.
2.7 Follow-up and obtain assessment report on the progress &
healthy operation of various investment ventures of the
company.
2.8 Handle acquisition & disposal or transfer of shares with &
through management of the company and hence present to the
Board for approval.
2.9 Follow-up & obtain reports on pre-construction, construction,
post-construction and administration of own and real-
estate/commercial buildings.
2.10 Get the study output with and through Management in relation
to financial requirements and source of funds to finance real-
estate investments and finally submit same to the Board of
approval.

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2.11 As and when the need for capital injection comes from the
General Assembly or Board of Directors and/or Management,
provide study assignments to Management and submit outputs
to the Board for further discussion and understanding; which
ultimately be decided by the General Assembly.
2.12 Upon the resolution of the General Assembly, provide
assignments to the Management with respect to valuation of
shares and period of settlement.
2.13 Oversee settlement of subscribed shares in due course of time.
2.14 Review the effectiveness of Companys internal control system
2.15 Review and assess the annual internal audit work plan.
2.16 Receive internal audit reports on internal controls, risk
management, governance processes and special investigations
(if any) and review the response of management to internal
audit findings and ensure that recommendations made by the
internal audit are implemented.
2.17 Monitor/assess the role, efficiency and effectiveness of the
internal audit function against quarterly and annual
performance reports.
2.18 Make a recommendation to the board on the appointment, re-
appointment or removal of the external auditors upon
delegation given to the board by the General Assembly and
propose the terms of engagement and the remuneration for the
external auditors.
2.19 Review the plans of the external auditor at the beginning of
each annual audit and carry out a post-completion audit
review before issuance of the Final Report.
2.20 Review the signatories to operate any bank accounts of the
Company.

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2.21 Examine investment and disinvestment proposals of the
Company in any viable long term investment activities when
necessary.
2.22 Review the effectiveness of the Companys internal control
systems including information technology security and control.
2.23 Examine yearly Budget Proposal produced by the management.
2.24 Review both internal and external Auditors Findings &
recommendations and subsequent rectifications.
2.25 Negotiate Audit fee with External Auditors for annual statutory
audit.
2.26 Assess the competence and skill of external Auditors yearly.

3. Operation and Business Development Committee

3.1 Reviewing corporate strategic, short and long term plans,


annual budget proposed by the management (through
developing an in depth knowledge of the business being served,
understanding and questioning the assumptions up on which
such plans are based, and examining the probability that the
plans can be realized) and present recommendations to the
Board.
3.2 It shall monitor corporate performance against operating and
strategic plans, including overseeing the operating results on a
regular basis to evaluate whether the business is being properly
managed.
3.3 It shall receive, examine, and present its recommendations to
the Board on periodic implementation reports on the short,
medium and long-term corporate programmes.
3.4 Review and approve company policies relating to pricing,
underwriting, claim, reinsurance arrangement, branch co-
ordination, and present its recommendations to the Board.

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3.5 Oversee and take to the attention of the Board of Directors all
required actions and policy matters which contribute to
enhance the profitability of the Company and follow
implementation up on approval by the Board of Directors.
3.6 It shall review the effectiveness and efficiency of the operational
systems particularly in the areas of risk assessment and
management, product development, and rate of premium
application to suggest new and improved systems for approval
by the Board of Directors.
3.7 It shall review marketing strategy which includes promotion
and advertisement, product mix determination and target
setting, market share determination (market feedback and
position analysis, pricing) and when necessary participate
marketing activities relating to image building promotion, etc.
3.8 Monitor and institutionalize appropriate and the state of the art
performance management systems up on approval by the Board
of Directors in order to promote and uplift corporate philosophy
and mission of the Company.
3.9 Oversee and give direction on external and internal non-
financial factors such as customer satisfaction, product or
service quality, relationships with outside stakeholders, the
impact on society and the environment, quality of governance,
innovation, operational performance, and employee
commitment.
3.10 It shall issue policy guidelines to improve and ensure proper
function of corporate governance.
3.11 Receive, examine, and submit its recommendations to the
Board on management proposals regarding guidelines relevant
to all issues which fall within its area of responsibility.

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Procedures Applicable for All Board Committee

1. The committee shall, under normal circumstances, deal with issues,


reports, or proposals which are submitted to it by management
through the Board of Directors, pursuant to a regular meeting of the
Board. Exceptionally, however, it may receive proposals, problems, or
reports for action directly from the management whenever expeditious
actions are required; provided, however, that the Board of Directors is
duly informed of all such exceptional procedures.

2. The Committee shall elect its own Chairman and determine its own
working procedures, provided, however, that the Board is duly
informed at all times.

3. Membership in the Committee shall normally be for one budget year,


but may be extended to two or three years by the decision of the
Board. Any Committee member may be re-appointed by the Board.

4. The Committees terms of reference may be expanded or altered in


other ways subsequent to a decision of the full Board.

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Duties and Responsibilities of Board Committee Proposed

1 Finance & Human Resource

1.1 Strategic Performance Review

1.1.1 Ensures that the Company enhances economic value for all
shareholders by making the most efficient use of resources.

1.1.2 Review Long term goals strategies and business plans.


1.1.3 Evaluate and have an input in human capital strategies
through the promotion of a strategic human resource
department.

1.2 Human Resource Strategies

1.2.1 Act as nomination and compensation committee with the


following main functions.

Nomination function:
be responsible for succession planning with the CEO
make recommendation to the board on the appoint
of Senior Executives
make recommendation to the board accelerated
promotion
ensure the selection of a CEO of the highest caliber

Compensation function:
align compensation of Senior Management with
interests of shareholders

set compensation of the CEO

ensure that performance bonus is earned only if there


is out performance by reference to key performance
indicators and by comparing corporate performance
with industry benchmarks.