The Role of Board Committees
Committees are created to assure that the board’s work is effectively coordinated and managed. A smaller, more concentrated group of board members can more efficiently address matters facing the casino than the entire board and can often meet more frequently. The committee should have the appropriate authority and responsibility delegated to them by the board, deep knowledge of the casino’s risks, and access to the necessary resources to implement the board’s work and make reasonable recommendations.
How Do Committees Govern?
Committees need guidelines to assist them with carrying out their duties. A committee charter is a roadmap for how the committee operates and is specific to each casino, but at minimum, the following components should be included:
- A header that details the name of the committee, the casino’s logo, and the date the charter went into effect
- The purpose of the committee
- Frequency of committee meetings
- Committee authority and responsibilities
- Committee chairperson responsibilities
- Adoption and amendments
- Attendance and committee actions, e.g. how often the charter will be updated by the committee chairperson
Putting a Committee into Practice – AML Committees
Casinos may have several committees in place to accomplish the board’s duties, including an AML committee.
An AML committee is established to provide oversight of all aspects associated with the casino’s BSA/AML and OFAC program. The goal of an AML committee is to assist the BSA officer with their responsibilities and execution of the program, and to assist the board of directors in its oversight of BSA/AML and OFAC obligations. Each casino’s committee charters will vary based on the business’s complexity and governance documents, but generally, the responsibilities of an AML Committee include the following:
- Supporting the BSA/AML and OFAC compliance function through proper resource allocation
- Maintaining strict compliance with all applicable laws
- Creating awareness of money laundering, terrorist financing, and sanctions risks
- Assisting with the assessment of risks and the application of appropriate risk-mitigating controls, including approving the annual BSA/AML and OFAC risk assessment
- Reviewing, discussing, and approving control activities for the effective management of the company’s BSA/AML and OFAC obligations and making recommendations to the BSA officer regarding the company’s fulfillment of those obligations
- Fostering communication among all stakeholders that contribute to the success of the company’s BSA/AML and OFAC program and ensuring that they have the information necessary to execute their respective BSA/AML and OFAC responsibilities
Committees Hold Management Accountable
Committee charters must ensure that the company directors know they are responsible for holding the casino’s senior management accountable for identifying and managing risks. Effective AML committee oversight allows the casino to achieve its business objectives while also managing risk within the company’s risk appetite. If the AML committee is inefficient, there may be gaps or weaknesses that are not being remediated and managed appropriately, causing undue risk to the company.
If your casino is in the process of establishing board committees, a good place to start is with an AML committee.
Set up a 30 minute call with A7 today to get started.