VKF_FRAE_2017

119 VakıfBank Annual Report 2017 Member of the Board of Directors Dr. Adnan ERTEM’s duties outside VakıfBank and the Group are; General Manager of the General Directorate of Foundations, Member of the Board of Directors of the Social Aid Fund Board, Member of the Board of Directors of Supreme Council of Antiquities and Monuments, Member of the Board of Trustees of Recep Tayyip Erdoğan University Foundation, Member of the Board of Trustees of Bezmi Alem University Foundation, Member of the Board of Directors of Kuveyt Türk Katılım Bankası A.Ş., Chairman of the Board of Directors of Press Advertising Institution, and Deputy Chairman of the Board of Directors of Vakıf Katılım Bankası A.Ş. Member of the Board of Directors Ömer Arısoy‘s duties outside VakıfBank and the Group; He is Ministry of Culture and Tourism undersecretary, Board Member at TURGEV, a Member of the Board of Directors of Yunus Emre Institute. The fourth paragraph of the 60 th Article of the Bank’s Articles of Incorporation is as follows: “Without getting approval from the General Assembly, Members of the Board of Directors cannot perform any transactions related to a commercial business that is within the scope of the Bank’s field of activity, for their own account or for the account of others, or cannot become unlimited partners in other companies carrying out similar commercial businesses.” Within this scope, without getting permission from the General Assembly of the Bank, the Members of the Board of Directors cannot directly or indirectly make any transactions with the Bank on behalf of themselves or others and cannot be executive members in a corporation making transactions with the Bank. 5.2 Operating Principles of the Board of Directors Board of Directors must convene at least twice a month upon the call made by the Chairman or at least two members in line with the necessity of the Bank affairs. However, if there are not any issues on the agenda, the meeting can be postponed only for one time with the approval of the Chairman (Article 53 of the Bank’s Articles of Incorporation). Meeting agendas are prepared according to the memorandums sent from the Head Office departments while various reports the Board of Directors requested from the management and various issues presented by the Board Members are discussed during the meeting. The agenda and relevant files are presented to the members prior to the meeting. Informational and communication activities for the Members of the Board of Directors of the Bank are carried out by the Board of Directors Administrative Department. In 2017, 89 Board of Directors meetings were held. Members of the Board of Directors did attend the Board Meetings except in cases they had excuses. Decisions were made unanimously. All questions, opinions and objections of the Members during the Board of Directors Meeting are recorded in the meeting minutes. Each Member of the Board of Directors has one right to vote, and members do not have weighted right to vote and/or negative veto right. At the Board of Directors Meetings, majority of the Members must be present. Decisions are taken by majority of the attending members. In case of equality of votes, the voted issue will be added on the agenda of the next meeting; and will be deemed refused in case of equality for another time in that meeting (54 th Article of the Articles of Incorporation of the Bank). In the Board of Directors’ decisions regarding the Bank’s significant related party transactions, approval is required by majority of the Independent Members. In case any such transaction is not approved by the majority of the Independent Members, (i) the situation will be publicly announced within the framework of public disclosure regulations in such a manner that will include sufficient information regarding the transaction; and (ii) the transaction will be presented to the approval of the General Assembly. Board of Directors’ decisions that are not made in conformity with the specified principles will not be valid (54 th Article of the Articles of Incorporation of the Bank). An electronic meeting system was set up to enable the Members of the Board of Directors of the Bank to attend the meetings and to vote on electronic platform. Losses incurred by the members of the Board of Directors as a result of their faults during their term of office, are covered under insurance. Employer’s Liability Insurance 2017 policy’s total value is USD 75,000,000 for each damage within the term of the policy. 5.3 Number, Structure and Independence of Committees Established by the Board of Directors In order to efficiently and effectively carry out its activities in line with the Banking Law numbered 5411, Banking Regulation and Supervision Agency’s “Regulation on Corporate Governance Principles in Banks”, Capital Markets Board’s Corporate Governance Principles and the Articles of Incorporation of the Bank; the Board of Directors has established Audit Committee, Credit Committee, Corporate Governance Committee and Remuneration Committee. All Members of the Audit Committee and the Chairmen of the other committees are Independent Members. Due to the fact that there are no Executive Members except the General Manager, in the Board of Directors, Committee Members are non-executive members. Committees are not entitled to take executive decision. The Audit Committee is composed of the Independent Members of the Board of Directors; Serdar Tunçbilek and Sabahattin BİRDAL. The Audit Committee convenes at least once a month on the specified date. Credit Committee is composed of two permanent members and General Manager. Permanent members are Serdar Tunçbilek (independent member) and Sabahattin BİRDAL. There are two substitute members for a member who will not attend a meeting. Substitute members are Ömer Arısoy and Dilek YÜKSEL. The Credit Committee generally convenes once every 15 days, and holds an extraordinary meeting in urgent cases. The Committee’s meeting date is set according to the number and urgency of the agenda items that are received by the meeting secretary.