1.

Establishment of ad hock Nomination and Election Committee

1.1. General meeting of shareholders shall appoint an ad hoc board nomination and
election committee responsible for nominating shareholders for election to the board.
1.2. The number of ad hock committee shall be composed of five (5) members.
1.3. The general meeting shall nominate candidates for the Nomination and Election
Committee members and approve of them based on the votes given to each
nominee.
1.4. The general meeting shall elect Nomination and Election Committee through secret
ballot
1.5. The result of the election of the Nomination and Election Committee members shall
be declared immediately.
2. Nomination and Election Committee Membership Criteria and Composition
2.1. Members of the Nomination and Election Committee shall

a) be shareholders
b) have interest to work as Committee member,
c) not be an employee of the bank
d) at a minimum complete general secondary school 1 or its equivalent and,
e) not have a record or evidence of previous conduct and activities where he/it has been
convicted for a criminal offense under any law promulgated to protect members of the
public from dishonesty or fraud whether in Ethiopia or elsewhere.
2.2. The Nomination and Election Committee shall elect its own chairperson and secretary from
among its members.
2.3. The general meeting shall ensure that at least two members of the Nomination and Election
Committee are non-influential shareholders, no matter what the committee's size is.
2.4. Members of the board shall not be elected as Nomination and Election Committee member.

3. Fit and proper criteria to be elected as member board of director

a. A director shall hold a minimum of first degree or equivalent from recognized

higher learning institution and shall have a minimum of seven (7) years’
experience in relevant field as specified under sub articles (e) and (f) of this sub-
article.
b. No person shall be appointed or hold office as a director of a bank if he is
serving as a director in more than four other organizations or entities and other
bank.
c. A board shall comprise of directors, who as a group, provide a mixture of core
competencies such as banking, risk management, finance, accounting,
management, economics, legal, business administration, auditing, information
technology, investment management and sustainability.
d. There shall not be single gender board in a bank. To this end, the board of a
bank shall comprise of at least two (2) female directors.
e. A director shall have experience in business management, banking and/or
finance, and shall take training in financial analysis, corporate governance,
 applicable laws, regulation, directives, risk management, and internal control
after holding a seat on the board.
f. Board members shall be and remain qualified, including through training and
continuous professional development, for their positions. The board shall
dedicate sufficient time, budget, and other resources for this purpose.
4. Independent Directors

a) One-third of a bank’s board of directors shall be constituted of independent directors.

Persons who are not Ethiopian by nationality can be elected to serve as independent
directors.
b) An independent director shall have a master’s degree or equivalent professional
qualification from a recognized institution of higher learning institution in a field of study
related to banking, accounting, auditing, finance, business management, economics, law,
technology, and related fields.
c) An independent director shall have a minimum of ten (10) years of professional experience
in the financial sector or teaching/consulting in relation with the financial sector, or auditing
or risk management or any other relevant fields.
5. Roles and responsibilities of ad hock nomination and election committee

The Ad Hock Nomination and Election Committee shall:

1.1 Be responsible for handling the whole nomination and election process for board-directors;
1.2 shall give an opportunity to every shareholder to nominate candidates for board
membership
1.3 The committee shall receive the nominations from the shareholders on the date of the
general shareholders’ meeting
1.4 Ensure that all nominations and elections for board members are conducted in a
transparent, fair and credible manner and in accordance with the requirements set in the
relevant law of the country, National Bank directives and this procedure.
1.5 The Committee shall shortlist candidates for board membership on the basis of the
nomination votes they obtained and ensure that they meet the fit and proper criteria under
relevant National Bank Directives and this procedure.
1.6 All nominations shall include a brief description of the nominee’s professional qualification
and experience, and indicate which shareholder is nominating the nominee. A shareholder
may nominate himself or herself.
1.7 A legal person may be appointed to the board of directors in line with the relevant provisions
of the Commercial Code. Where a person nominated is a legal person, a natural person
who represents this legal person on the board (the representative) shall be identified during
the nomination process to ensure that the person representing the shareholder fulfills the
criteria set by the National Bank for board membership.
1.8 In a situation where the representative cannot be identified during the nomination process;
the legal person shall assign a representative who shall fulfil the National Bank's
requirement in due course.
1.9 All nominees that the nomination and election committee receive from shareholders must
meet the qualifications and experience required by the National Bank. The nomination and
 election committee shall adequately inform the shareholders about board election criteria
prior to the conduct of board nomination process.

1.10 The nomination and election committee, shall receive and prepare three (3) lists of
nominees, as per the following order:
a. List 1: Nominees for 1/3 rd of the board seats reserved for noninfluential
shareholders, for election by non- influential shareholders;
b. List 2: Nominees for 1/3rd of the board seats reserved for all shareholders, for
election by all shareholders; and
c. List 3: Nominees for 1/3rd of the board seats reserved for independent directors,
for election by all shareholders.
1.7. The general meeting vote separately for each nominee, on each list. Only non-
influential shareholders may vote for the nominees in List 1.
1.8. All shareholders may vote for List 2 and List 3.
1.9. The nominees with the largest number of votes will be appointed. Nominees who
were not successful shall be included for each category on a waiting list for
consideration for appointment by the board in the event of future vacancies on the
board.
1.10. The nomination shall be based on the number of votes (number of subscribed share)
given to each nominee. If more than one nominee gets equal votes, the Nomination
and Election Committee shall select nominees having higher educational level.
experience and other criteria it thinks best with justifications.

1.11 The Nomination and Election Committee shall provide the list of nominated candidates to
the general meeting at a minimum together with the following information about each
candidate:
a. name and age,
b. number of votes given,
c. educational qualification,
d. work experience,
e. current membership to the board and other offices.
1.12 The Committee's recommendations shall satisfy the requirements relating to the
composition of the Board of Directors laid down in the National Bank directives and
applicable laws.
1.13 Where the number of candidates nominated is less than the number set in this procedure
or where the nominated candidates do not fulfill the criteria set by the National Bank, the
Nomination and Election Committee shall do its best on its own to ensure the number of
nominees satisfies the requirements.
2. Election Process of the Board of Directors

2.1 The Nomination and Election Committee shall be responsible to handle the election
process of board of directors in collaboration with the secretariat of the general meeting.
2.2 The Nomination and Election Committee shall present the list of candidates with their profile
to the general meeting.
2.3 The Nomination and Election Committee shall give an opportunity to the nominated
candidates, during the meeting to introduce themselves to the General Meeting and
express their interest to serve as board of directors.
2.4 The Nomination and Election Committee, in collaboration with the concerned organs of the
bank, shall prepare ballots to the shareholders and ballot boxes.
2.5 The ballot shall at least bear the following:
a. name of the shareholder,
b. number of shares subscribed by the shareholder,
c. unique Id No. for the meeting,
d. name and logo of the bank,
e. stamp of the bank, and
f. space for writing names of the nominees the shareholder wants to vote for.
2.6 The ballots shall be distributed to the shareholders simultaneously with attendance
signature. Similarly, the Nomination and Election Committee shall closely monitor the
election process of the board of directors until the end of the processes.
2.7 If any of the nominees is not willing to be elected as a board member or is rejected from
nomination for other reasons, the next reserve nominee shall be substituted and subjected
to same procedure.
3. Voting Procedures

3.1 The Nomination and Election Committee shall prepare ballot boxes as it thinks appropriate
for the election.
3.2 The shareholders shall write the names of the candidates they want to vote for on the
ballots and cast their votes in the ballot boxes prepared for the election.
3.3 Vote in person and as proxy in shareholders meeting shall be as stipulated in the Article
and Memorandum of Associations of the bank. However, a shareholder may not represent
shareholders having more than ten percent (10%) of the subscribed capital of the bank
including the representative's own share.
3.4 Soon after the closure of polls, the Nomination and Election Committee in collaboration
with the secretariat of the general meeting and support staffs shall count the votes.
3.5 The Nomination and Election Committee shall record the number of votes given to each
candidate and invalid ballot papers. Besides, reason for the invalidation shall clearly be put
on the ballot itself and confirmed and signed by the Nomination and Election Committee.
3.6 A ballot paper shall be deemed invalid for one of the following reasons:
a) ballot paper which does not bear the name of the shareholder,
b) ballot paper which does not bear the number of subscribed shares of the shareholder,
c) ballot paper which does not bear the name and logo of the bank,
d) ballot paper on which name of the candidate is not written,
e) non-signed ballot paper,
f) erased ballot paper, and
g) Ballot paper which doesn't bear ID/voting No. of the shareholder.
3.7 Upon conclusion of vote counting, the Nomination and Election Committee shall ascertain
that the voting and counting process and the results thereof are valid by signing on the
minutes recorded and on the form prepared for the purpose.
3.8 The votes counted shall be sealed and held separately.
3.9 Results of the vote counting shall be announced on the same day to the General Meeting
or where this is not possible, the next working day by posting on the website/web page and
notice board at the Head Office of the bank.
 4. Inapplicability of this Procedure

4.1 This procedure is not applicable where over fifty percent (50%) of the incumbent board
members
a) are removed by the general meeting or by the National Bank before expiry of their term,
b) have resigned from board seats,
c) are unable to sit on the board for any reason, or
d) over fifty percent (50%) of the votes fail to accept nominees presented by the Nomination
and Election Committee.
4.2 Where any of the conditions mentioned under 12.1 occur, the provisions of the Commercial
Code of Ethiopia shall apply for the election of board members.
4.3 Where the surviving directors are less than half of the board of directors, they shall convene
a general meeting to appoint other directors.

6. Duties and Responsibilities of Board of Directors

The Board shall:

d. be responsible for handling the process of election of the Nomination and Election
Committee:
e. Include the election of Nomination and Election Committee in its agenda of the
general meeting; and
f. The nomination and remuneration committee of the board of directors, in due
observance of related criteria, shall recruit and propose nominees, whose
number shall at least be twice the number of independent board members to be
elected. The board of directors will then handover the list of nominees for
independent directors to the nomination and election committee.