CORPORATE GOVERNANCE
The Board considers that good corporate governance is central to achieving the Company’s objectives and has applied these principles in drawing up the Company’s Risk Management Framework taking into consideration the combined code on corporate governance issued by the Financial Reporting Council and the FSA’s requirements on systems and controls.

The Risk Management Framework outlines the roles of the Board, the Executive and line management, including the delegated authority. It identifies the necessary processes to measure and control risks and identifies means to monitor and report risks to ensure compliance with the requirements of the Board, FSA and other relevant regulatory authorities.

RISK MANAGEMENT FRAMEWORK
EIIB recognises that risk management is important and seeks to continuously comply with best practice in the UK banking industry, with FSA requirements and with regulation and other directives. The Bank has documented its risk management strategy and philosophy in its Risk Management Framework prepared to support its recent successful application to the FSA.

The bank has developed certain risk standards, including the following:

• Sharia’a Risk Statement;
• Credit Risk Management Statement;
• Provisioning Policy Statement;
• Large Exposures Policy Statement;
• Operational Risk Management Statement;
• Trading Book Policy Statement;
• Market Risk Management Statement;
• Liquidity Policy Statement; and
• Profit Rate Risk Management Statement.

EIIB has adopted a ‘‘four lines of defence’’ policy. These are as follows:

• Business unit;
• Risk department;
• Executive management; and
• Internal audit.