About Cynergy Bank

Corporate Governance

Cynergy Bank Limited (the “Bank”) is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA. Asset Finance lending  is exempt from regulation by the Financial Conduct Authority and the Prudential Regulation Authority.

Board of Directors

The Board of Directors has ultimate responsibility for the prudent management of the Bank and its subsidiary companies and oversight of senior management. Its terms of reference include:

• Establishing a sustainable business model and a clear strategy consistent with that model
  

• Reviewing, challenging and approving strategic plans (and their underlying assumptions and rationale) and annual budgets after review by Group senior management
  

• Ensuring the adoption and maintenance of high standards of corporate governance
  

• Ensuring that management maintains an appropriate system of internal controls which provides assurance of effective operations, internal financial controls and compliance with the rules and regulations
  

• Setting corporate values and standards, with due regard to treating customers fairly and ethical leadership
  

• Reviewing and overseeing the effective implementation of the Remuneration Policy
  

• Approving new products and material changes to existing products

The Chair is a non-executive director. Members of the Board of Directors are appointed by the Board on the recommendation of the Remuneration Nominations and Corporate Governance Committee. The Board of Directors has delegated a number of its responsibilities to three board committees. These are:

Audit Committee

The Audit Committee is responsible for ensuring the integrity of the Bank’s financial statements and any other announcements on financial performance. Its terms of reference include:

• Reviewing the adequacy of provisions for bad debts and other provisions
  

• Reviewing the adequacy of capital and liquidity in the light of the results of stress testing
  

• Monitoring the effectiveness of the Bank’s internal quality control and risk management systems and its internal audit
  

• Receiving and considering internal audit reports and approving the internal audit plan
  

• Appointing the external auditors and approving their remuneration

Risk Committee

The Risk Committee advises the Board on the Bank’s current and future risk appetite and assists the Board in overseeing the implementation of strategy. Its terms of reference include:

• Reviewing internal control systems
  

• Monitoring regulatory compliance and important regulatory correspondence
  

• Reviewing whistleblowing arrangements
  

• Challenging executives on major decisions involving risk management and risk-taking
  

• Ensuring that the Bank’s risk profile and risk appetite remain appropriate
  

• Reviewing the Bank’s internal assessment of capital and liquidity adequacy

Remuneration, Nominations and Corporate Governance Committee

The Remuneration, Nominations and Corporate Governance Committee makes recommendations for senior appointments, oversees succession planning and monitors corporate governance arrangements. Its terms of reference include:

• Recommending appointments to the Board and the Executive Committee
  

• Reviewing corporate governance arrangements and making appropriate recommendations to the Board of Directors
  

• Monitoring the composition of the Board of Directors to ensure that a broad set of skills and experience are represented and that there is a strong independent element on the Board
  

• Agreeing targets for appropriate gender balance on the Board
  

• Ensuring that directors have sufficient time to perform their duties effectively
  

• Ensuring that there are adequate resources for the induction and training of members of the Board
  

• In performing its duties, and to the extent possible, taking account of the need to ensure that the Board's decision-making is not dominated by any one individual or small group of individuals
  

• Overseeing the annual performance evaluation of the Board and its sub-committees, including annual assessment of the effectiveness of the Chair and individual executive and non-executive directors
  

• Reviewing the Nomination process in relation to the appointment of senior management and making recommendations to the Board, where necessary
  

• Approving the Bank’s Remuneration Policy
  

• Monitoring the performance of Senior Management
  

• Reviewing the results of performance reviews and approving the budget for pay awards and the design of any variable pay arrangements
  

• Approving recommendations on the remuneration of the Executive Directors and employees identified as material risk takers

Senior Managers Regime

The Bank complies with all aspects of the UK Senior Managers Regime, which requires the assessment of the suitability of members of the Management Body.