Asset and Liability Committee ("ALCO") - Terms of Reference
The ALCO has been established as a committee of the Board and has been delegated authority by the Board to make decisions, which comply with Board Policy, in relation to overall strategy for the management of liquidity, funding, balance sheet risk and capital.
The Board has resolved that the ALCO shall operate under the following terms of reference:-
Membership
The ALCO consists of the following members:-
- Chief Executive (Chair of ALCO)
- Finance Director (Vice Chair of ALCO)
- Marketing Director
- Senior Marketing Manager
- Treasurer
- Treasury Manager
- One Non-Executive Director nominated by the Board
The Treasury Manager will act as Secretary to the ALCO.
Quorum
A quorum of the ALCO shall consist of 4 members, one of whom must be a member of the Society's Board of Directors.
Frequency of Meetings
At least monthly with additional ad hoc meetings as required.
Purpose and Objectives of ALCO
ALCO has the following six key objectives:-
- To monitor and control the management of the liquidity of the Group and the liquidity risk of the Group.
- To monitor and control the risk / rewards of advances to customers of the Society.
- To monitor and control the overall funding of the Group.
- To monitor and control the capital base and requirements of the Group.
- To monitor and control the interest rate risk of the Group, including the off balance sheet hedging of the Group.
- To monitor and control the structural balance sheet risk.
Reporting
On a monthly basis the Finance Director will update the Board on all salient matters from the monthly ALCO meeting by written report supported by a verbal summary.
ALCO will review comprehensive reports at the ALCO meetings in order to meet the objectives. Treasury will be responsible for collating the reporting requirements, which will be defined by ALCO.
