The Board has set up the Audit and Risk Committee to aid in fulfilling its duties. The table below outlines the main responsibilities of the committee:
OVERSIGHT AREA | PRIMARY RESPONSIBILITIES |
Charter | Fulfilling oversight responsibilities in relation to the integrity of the Company’s financial statements, financial reporting process, internal accounting and financial controls, and the annual independent audit. Overseeing compliance with legal and regulatory requirements, Independent Auditors’ qualifications, independence, and performance, along with ethical compliance programs, including the Codes of Business Conduct. Directly overseeing the enterprise risk management (ERM) program and certain risks within the ERM framework. Participating in educational sessions on the Company’s operations as requested by the committee. Periodically receiving and discussing reports on the governance of the Company’s risk management process, as well as reviewing significant risks and exposures identified, and management’s steps to address them. Acting independently while maintaining open communication with the Independent Auditors and management. |
Compensation | Evaluating and approving compensation plans, policies, and programs primarily applicable to the Company’s senior executive group. Making decisions that affect a larger group of employees. |
Directors & Corporate Governance | Considering and making recommendations concerning Director nominees, the function and needs of the Board and its committees. Leading the annual review of the Board’s performance. Reviewing the Company’s Corporate Governance Guidelines and providing oversight of corporate governance affairs consistent with the long-term best interests of the Company and its owners. |
Executive | Exercising the power and authority of the Board between meetings, except for powers reserved for the Board or shareholders. Acting by written comment in lieu of a meeting if matters are delegated to the committee by the Board. |
Finance | Assisting the Board in fulfilling oversight responsibilities for the Company’s financial affairs, including reviewing, and recommending dividend policy, capital expenditures, debt and other financings, major strategic investments, and other transactions. |
Management Development | Assisting the Board in fulfilling responsibilities related to talent development for senior positions and succession planning. |
Public Issues | Assisting the Board in fulfilling responsibilities related to diversity, sustainability, corporate social responsibility, and public issues of significance affecting shareholders, the Company, the business community, and the general public. |
The table below outlines the current members of the Audit & Risk Committee:
NAME | ROLE |
Bruce Knowles* | Chair |
Simon Cooper | Member |
Raymond Winder | Member |
Geoff Andrews* | Member |
Shirley Cartwright* | Member |
*Independent Directors
The Audit & Risk Committee (the "Committee") represents and assists the Board of Directors in fulfilling its oversight responsibility to the shareholders regarding:
1.1 The integrity of the Company's financial statements and the financial reporting process. 1.2 The effectiveness of the systems of internal accounting and financial controls, particularly as they relate to microfinance operations and client data.
1.3 The annual independent audit of the Company's financial statements.
1.4 The Company's compliance with legal and regulatory requirements, including those specific to microfinance and financial inclusion.
1.5 The Company's ethics programs, including its commitment to client protection principles and social performance, as established by management and the Board.
1.6 The independent auditors' qualifications and independence.
The Committee will also evaluate the performance of the Company's independent auditors, including a review and evaluation of the lead assurance engagement partner and global coordinating partner. In fulfilling its responsibilities, the Committee will act independently, maintaining free and open communication with the independent auditors and management. The Committee is also responsible for producing an annual report for inclusion in the Company's proxy statement.
2.1 The Committee shall be appointed by the Board and shall comprise at least three directors.
2.2 Each Committee member shall meet the requirements of the Company's Corporate Governance Guidelines.
2.3 No member may serve on the audit committees of more than three companies, unless the Board of Directors has affirmatively determined that the Director will be able to devote sufficient time and attention to the business of the Committee.
2.4 All Committee members will be financially literate, and at least one member will meet the definition of "audit committee financial expert."
2.5 The Board will designate a Chairperson for the Committee.
2.6 The Committee may form and delegate authority to subcommittees when appropriate.
The primary responsibility of the Committee is to oversee the Company's financial controls and reporting processes on behalf of the Board and report the results of its activities to the Board. While management is responsible for preparing the Company's financial statements and the independent auditors are responsible for auditing them, the Committee believes its policies and procedures should remain flexible to best react to changing conditions and circumstances. The Committee should take appropriate actions to set the overall corporate "tone" for quality financial reporting, sound business risk practices, ethical behavior, and strong social performance.
The following are the principal recurring processes of the Committee in carrying out its oversight responsibilities. The Committee may perform such other duties and responsibilities as are consistent with its purpose and as the Board or the Committee deems appropriate.
3.1.1 The Committee shall have a clear understanding with management and the independent auditors that the independent auditors are ultimately accountable to the Committee and the Board.
3.1.2 The Committee shall have the sole authority and responsibility to hire, evaluate, and, where appropriate, replace the independent auditors. In its capacity as a committee of the Board, it shall be directly responsible for the appointment, retention, compensation, and general oversight of the work of the independent auditors.
3.1.3 The Committee shall discuss the auditors' qualifications and independence from management and the Company, including whether the auditors' performance of permissible non-audit services is compatible with their independence. This process will include, at least annually:
3.1.3.1 The Committee's receipt of a report by the independent auditors describing their internal control procedures, and any material issues raised by the most recent internal quality-control review of the independent auditors, or by any inquiry or investigation by governmental or professional authorities within the preceding five years, respecting one or more independent audits carried out by the independent auditors, and any steps taken to deal with any such issues.
3.1.3.2 Receipt of a report on all relationships between the independent auditors and the Company, or persons in a financial reporting oversight role at the Company, that may reasonably be thought to bear on independence.
3.1.4 The Committee will discuss the matters required to be communicated to the Committee by the independent auditors under established auditing standards.
3.1.5 The Committee will evaluate the performance of the Company's independent auditors, including the senior audit engagement team, each year and determine whether to re-engage the current independent auditors or consider other audit firms. In doing so, the Committee will consider the quality and efficiency of the services provided by the auditors, the auditors' technical expertise and knowledge of the Company's operations and industry (especially microfinance), and any other applicable factors as determined by the Committee.
3.1.6 In connection with the mandated rotation of the Independent Auditors' lead assurance engagement partner and global coordinating partner, the Audit Committee and its Chairperson shall be directly involved in the selection of the new lead assurance engagement partner.
3.1.7 As a matter of good corporate governance, the Committee shall submit its selection of the independent auditors to the Shareholders for ratification. If the shareholders do not ratify the appointment, the Committee will reconsider the appointment.
3.2.1 The Committee shall discuss with the independent auditors the overall scope and plans for their respective audits, including their respective responsibilities and the adequacy of staffing, particularly for geographically dispersed microfinance operations.
3.2.2 The Committee shall approve in advance all audit engagement fees and the terms of all audit services to be provided by the independent auditors.
3.3.1 The Committee shall approve in advance all permissible non-audit services to be provided by the independent auditors.
3.3.2 The Committee shall establish policies and procedures for the engagement of the independent auditors to provide permissible audit and non-audit services.
3.3.3 The Committee will consider and, if appropriate, give advance approvals to specified classes of non-audit services in accordance with policies adopted by the Committee.
3.3.4 No non-audit services shall be provided by the independent auditors, except as approved in advance by the Committee.
3.4.1 The Committee shall meet and review the interim financial statements, and the Company's disclosures under Management's Discussion and Analysis of Financial Condition and Results of Operations, with management and the independent auditors. This review will pay particular attention to key microfinance metrics such as portfolio quality, loan loss provisioning, and client outreach.
3.4.2 The Committee will discuss the results of the quarterly review with the independent auditors.
3.5.1 The Committee shall meet and review with management and the independent auditors the financial statements and Management Accounts, including:
3.5.1.1 The clarity of the disclosures in the financial statements, especially those related to the microfinance portfolio and social performance.
3.5.1.2 The Company's disclosures under Management's Discussion and Analysis of Financial Condition and Results of Operations, including critical accounting policies relevant to microfinance (e.g., revenue recognition for small loans, impairment of loans).
3.5.2 The Committee will review and discuss with the independent auditors the matters required to be communicated to the Committee by the independent auditors under established auditing standards, including any difficulties the independent auditors encountered in the course of their audit work, any restrictions on the scope of the auditors' activities or on access to requested information, and any significant disagreements with management, and management's response to such difficulties.
3.5.3 The Committee will also review and discuss with management and the independent auditors the annual report on internal controls by the Chief Executive Officer and Chief Financial Officer, and the report on the effectiveness of the Company's internal controls prepared by the independent auditors, with a specific focus on controls relevant to client transactions and data integrity in microfinance.
3.6.1 The Committee will oversee risks related to the Company's financial statements, the financial reporting process, accounting, and legal matters.
3.6.2 The Committee will oversee the Company's ethical compliance programs, including the Company's Codes of Business Conduct and its commitment to client protection principles. 3.6.3.
The Committee will periodically receive reports on and discuss governance of the Company's risk assessment and risk management processes, with a particular emphasis on:
3.6.3.1 Financial Risks: Credit risk (portfolio at risk, loan default rates), liquidity risk, currency risk, and interest rate risk common in microfinance.
3.6.3.2 Operational Risks: Fraud (both internal and external, particularly at the field level), technology risks, and risks associated with cash handling and dispersed operations.
3.6.3.3 Compliance and Regulatory Risks: Adherence to microfinance-specific regulations, consumer protection laws, and data privacy.
3.6.3.4 Social Performance Risks: Risks related to over-indebtedness of clients, predatory lending practices, and failure to meet social mission objectives.
3.6.4 The Committee will review significant risks and exposures identified to the Committee by management or the independent auditors (whether financial, operating, social, or otherwise), and management's steps to address them.
3.6.5 In connection with its oversight of these matters, the Committee members will regularly meet separately with the Company's General Counsel and representatives of the independent auditors.
3.7.1 The Committee will discuss with management and the independent auditors the Company's internal controls, including those specific to microfinance operations (e.g., loan origination, disbursement, collection, client data management).
3.7.2 The Committee will review and discuss the Company's disclosure controls and procedures, and the annual assessments of such controls and procedures by the Chief Executive Officer and Chief Financial Officer.
3.7.3 The Committee shall consider issues involving related person transactions with the Chairperson of the Board (if an employee of the Company) or the Chief Executive Officer or any holder of 5% or more of the Company's shares.
3.7.4 The Committee shall have the authority to consider for approval any such related party transactions and if possible approve such transactions before they are entered into, and will periodically review other significant related party transactions (as defined by applicable accounting standards) identified by management.
The Committee shall establish and oversee procedures for handling complaints regarding accounting, internal accounting controls, auditing, and ethical conduct, including procedures for confidential, anonymous submission of concerns by employees regarding accounting, auditing, and legal matters, particularly those related to client protection and ethical lending practices.
The Committee shall periodically review and discuss with management and the independent auditors the overall adequacy and effectiveness of the Company's legal, regulatory, ethics, and compliance programs, including the Company's Codes of Business Conduct and its adherence to microfinance industry best practices and client protection principles. The Committee shall meet at least annually with the Company's Compliance Officer, who shall communicate directly to the Audit Committee about actual and alleged violations of law or any matters involving criminal or potential criminal conduct.
The Committee shall prepare the Annual report to be included in the Company's annual proxy statement.
The Committee shall set hiring policies with regard to employees and former employees of the independent auditors.
The Committee shall at least annually review and reassess the adequacy of this Charter and recommend any proposed changes to the Board for approval.
The Committee shall annually review its own performance.
In discharging its oversight role, the Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the Company.
The Committee shall have the authority to retain such outside counsel, accountants, experts, and other advisors as it deems appropriate to assist the Committee in the performance of its functions. The Committee shall be provided with appropriate funding, as determined by the Committee, for payment of compensation to such outside counsel, accountants, experts, and other advisors.
3.16.1 The Committee will meet as often as may be deemed necessary or appropriate in its judgment, at least quarterly each year, and at such times and places as the Committee shall determine.
3.16.2 A majority of the members of the Committee shall constitute a quorum.
3.16.3 The Committee will meet separately, at least quarterly, with the independent auditors, the general counsel, and other senior management to discuss any matters that they wish to bring to the Committee's attention or that the Committee wishes to bring to their attention.
3.16.4 The Committee shall report to the Board with respect to its meetings, including any significant issues that arise with respect to the quality or integrity of the Company's financial statements, the Company's compliance with legal or regulatory requirements (especially microfinance specific ones), and the performance and independence of the Company's independent auditors.
The Audit & Risk Committee is established by the Board to have overall responsibility for evaluating and approving compensation plans, policies, and programs of the Company applicable primarily to the Company's Senior Executive Group, which includes all officers of the Company and such other members as the Committee may designate from time to time. This will include considering performance against both financial and social performance metrics relevant to microfinance.
4.2.1 The Audit & Risk Committee will measure the Chairperson of the Board's and the Chief Executive Officer's performance against each of his or her goals and objectives pursuant to the Company's plans (which should include social impact and client outreach targets) and, after considering the full Board's evaluation of his or her performance, determine the compensation of the Chairperson of the Board and the Chief Executive Officer.
4.2.2 The full Board will review the Audit Committee's actions. In determining compensation, the Committee will consider the Company's financial performance, its social performance (e.g., client outreach, poverty outreach, client retention, client satisfaction), relative shareholder return, the compensation of the chairperson of the board and the chief executive officers at comparable microfinance institutions or development-focused organizations, the awards given to the Chairperson of the Board and the Chief Executive Officer in past years, and such other factors as the Committee deems relevant.
4.2.3 The Committee shall review and approve compensation of all Senior Executive Group members at appropriate time periods. The Committee shall take into account the Chief Executive Officer's recommendation and evaluation of each individual's performance (including their contribution to the Company's social mission), the Company's overall performance, and comparable compensation paid to similarly-situated executives in comparable organizations.
The Audit & Risk Committee, established by the Board, will:
5.2.1 Identify individuals qualified to be Board members consistent with criteria approved by the Board, and to recommend to the Board of Directors nominees for the next annual meeting of owners.
5.2.2 Recommend to the Board directors to serve on standing Board Committees.
5.2.3 Lead the Board in its annual review of the Board's performance.
5.2.4. Develop and recommend to the Board a set of Corporate Governance Guidelines.
5.2.5 Oversight of the corporate governance affairs of the Board and the Company, consistent with the long-term best interests of the Company and its owners, emphasising transparency and accountability in microfinance operations.
5.2.1 The Audit & Risk Committee shall seek individuals qualified to become Board members for recommendation to the Board, including evaluating persons suggested by owners or others, and conduct appropriate inquiries into the backgrounds and qualifications of possible nominees.
5.2.2 Directors should possess the highest personal and professional ethics and integrity and be committed to representing the long-term interests of the owners and the Company's social mission.
5.2.3 The Committee shall determine each proposed nominee's qualifications for service on the Board. The assessment will include a review of the nominee's judgment, experience (including in microfinance, financial inclusion, or social development), independence, understanding of the Company's or other related industries, and such other factors as the Committee concludes are pertinent in light of the current needs of the Board.
5.2.4 Each nominee should be a person of integrity and be committed to devoting the time and attention necessary to fulfill his or her duties to the Company.
5.2.5 Diversity of race, ethnicity, gender, age, and professional background (e.g., development, social impact, finance, technology for financial services) are important factors in evaluating candidates for Board membership.
5.2.6 The Committee shall evaluate the performance of each director before recommending to the Board his or her nomination for an additional term as director.
The Audit & Risk Committee is appointed by the Board to aid the Board in handling matters which, in the opinion of the Chairperson of the Board, should not be postponed until the next scheduled meeting of the Board.
6.2.1 During the interval between meetings of the Board of Directors, the Audit & Risk Committee shall have and may exercise the powers of the Board of Directors to act upon any matters which, in the opinion of the Chairperson of the Board, should not be postponed until the next previously scheduled meeting of the Board of Directors; but, to the extent prohibited by law, shall not have the power or authority of the Board of Directors in reference to:
6.2.2 Approving or adopting, or recommending to the owners, any action or matter expressly required by the Laws of the Commonwealth of The Bahamas (or relevant jurisdiction for the microfinance operations) to be submitted to owners for approval.
6.2.3 Adopting, amending, or repealing any By-Law of the Company.
The Audit & Risk Committee is established by the Board to aid the Board in discharging its responsibilities relating to oversight of the Company's financial affairs, with due consideration for its microfinance business model and social objectives.
7.2.1 The Audit & Risk Committee shall periodically formulate and recommend for approval to the Board the financial policies of the Company, including management of the financial affairs of the Company.
7.2.2 The Committee shall have prepared for approval by the Board annual budgets and such financial estimates as it deems proper; shall have oversight of the budget and of all the financial operations of the Company; shall recommend dividend policy to the Board, balancing financial sustainability with the social mission; and from time to time shall report to the Board on the financial condition of the Company.
7.2.3 All capital expenditures of the Company shall be reviewed by the Committee and recommended for approval to the Board.
7.2.4 The Committee may authorize another committee of the Board or one or more of the officers of the Company to approve borrowings, loans, capital expenditures, and guarantees up to such specified amount or upon such conditions as the Committee may establish, subject to the approval of the Board, and to open bank accounts and designate those persons authorized to execute checks, notes, drafts, and other orders for payment of money on behalf of the Company.
7.2.5 The Committee shall periodically evaluate the performance of and returns on approved capital expenditures.
7.2.6 The Committee shall periodically review, assess, and evaluate management's recommendations for capital structure, debt and other financings (including social impact investments), major strategic investments, and other transactions, and based upon its review and assessment recommend transactions for approval to the Board, as appropriate.
The Audit & Risk Committee is established by the Board of Directors to aid the Board in discharging its responsibilities relating to succession planning and talent development, especially for leadership positions crucial to the Company's microfinance mission.
8.2.1 The Committee shall aid the Board in fulfilling its responsibility for succession planning and oversight of talent development for senior positions.
8.2.2 The Committee's primary focus shall be on the most senior positions, ensuring continuity in leadership that understands both financial and social performance objectives.
8.2.3 The Committee shall assist management in the development of and annually review the succession planning for the most senior positions.
8.2.4 The Committee shall review the talent development plans for the executives occupying the most senior positions.
8.2.5 The Committee shall review the talent development plans for the identified possible successors to the executives occupying the most senior positions.
The Audit & Risk Committee is established by the Board to aid the Board in discharging its responsibilities relating to the Company's positions on sustainability, corporate social responsibility, and public issues of significance, which may affect the shareholders, the Company, the business community, and the general public, particularly within the context of financial inclusion and microfinance development; and to perform such other duties as may be delegated by the Board and consistent with this Charter.
9.2.1 The Committee shall evaluate social, political, and environmental trends, issues, and concerns which affect or could affect the Company's business activities and performance, especially regarding financial inclusion, client protection, and responsible lending; and make recommendations to the Board and management regarding how the business can adjust to these trends.
9.2.2 The Committee will review the Company's progress toward its goals and compliance with the Company's responsibilities as an equal opportunity employer. The Committee will receive at least annually, presentations by the CEO and others related to the accomplishment of the Company's equal opportunity goals.
9.2.3 The Committee will review the nature and scope of the Company's sustainability and social performance goals and the Company's progress toward achieving those goals. The Committee will receive at least annually, presentations by the CEO, and others as required, related to the accomplishment of the Company's sustainability and social impact goals (e.g., poverty outreach, client satisfaction, non-financial services).
9.2.4 The Committee shall review the Company's public policy advocacy efforts, including all political contributions, to ensure alignment with Company policy and its overall values, particularly in promoting an enabling environment for responsible microfinance. This review will occur at least annually. In addition, the Committee will periodically review its Political Contributions policy to ensure its efficacy.
9.2.5 The Committee shall annually review charitable contributions made by the Company.
This Charter and any provision contained herein may be amended or repealed by the Board of Directors.
At the Company, we aim to lead by example and to learn from experience. We set high standards for our people at all levels and strive to consistently meet them. Our sound business principles and practices foster our strong, innovative, and collaborative culture, which is committed to ethical behavior, accountability, transparency, and a strong social mission in financial inclusion. We are guided by our established standards of corporate governance and ethics, particularly as they apply to serving low-income individuals and communities. We review our systems to ensure we achieve best business practices in terms of transparency and accountability. The foundation of our approach to corporate governance is laid out in our Corporate Governance Guidelines and in the charters of our Board of Directors' committees.
The Board of Directors is appointed by the owners to oversee their interests in the long-term health and the overall success of the Company's business and its financial strength, as well as its social mission. It serves as the ultimate decision-making body of the Company, except for those matters reserved to or shared with the owners. The Board fulfills its duties, including implementation of risk oversight, with the assistance of the Audit & Risk Committee appointed Board of Directors. The Board also selects and oversees the members of senior management, who are charged by the Board with conducting the business of the Company ethically and effectively, pursuing both financial viability and social impact.
Corporate responsibility is managed by a cross-functional group of senior managers from our company and members of the Board. This group identifies risks and opportunities faced by our business and the communities we serve, particularly concerning financial inclusion, client welfare, and environmental sustainability, and recommends strategies to address these challenges.
The core of the ethics and compliance program at the Company is our Code of Business Conduct, which guides our business conduct, requiring honesty and integrity in all matters and transactions, especially those involving our clients. All our associates and directors are required to follow and understand the Code and follow its precepts in the workplace and larger community, ensuring fair and responsible treatment of clients.
We engage in public policy dialogues with the goal of responsibly utilizing our resources to promote public policies aligned with our industry and business priorities, particularly those that foster sustainable financial inclusion and client protection. Our Board of Directors' Audit & Risk Committee oversees and reviews our advocacy efforts, including political contributions.
The Board has established a process to facilitate communication by owners and other interested parties with Directors. Communications can be addressed to Directors in care of the Office of the Secretary by email to: peggy@easypayday.loans
Communications may be distributed to all directors, or to any individual director, as appropriate. At the direction of the Board, all mail received may be opened and screened for security purposes. In addition, items that are unrelated to the duties and responsibilities of the Board should be excluded. Such items include, but are not limited to:
Spam
Junk mail and mass mailings
Product complaints or inquiries
New product suggestions
Resumes and other forms of job inquiries
Surveys
Business solicitations or advertisements.
In addition, material that is trivial, obscene, unduly hostile, threatening, illegal, or similarly unsuitable items will be excluded; however, any communication that is excluded will be made available to any independent, non-employee director upon request.
Issues and concerns regarding accounting, internal accounting controls, auditing, or other business conduct at the Company may be submitted via mail.
Compliance Officer
Easyterms Ltd
P.O. Box N-4805
Nassau, Bahamas
email: peggy@easypayday.loans