Excess or Luxury Expenditures Policy
California International Bank, N.A. is committed to fiscal responsibility and doing the right thing for its customers and shareholders. Based on our normal business practices, we have created policies that manage expenditures and ensure appropriate management oversight. These policies are reviewed and updated regularly to reflect changing business practices, laws and regulations.
The expense policies at California International Bank, N.A. are designed to provide principles for prudent spending across multiple expense types, while also allowing reasonable flexibility to accomplish business goals. These policies reasonably limit excessive or luxury expenditures.
The "Excessive or Luxury Expenditures Policy" applies to California International Bank, N.A.; it supplements other California International Bank, N.A. policies and is intended to address:
- What the bank may consider an excessive or luxury expenditure
- Pre-approval for any potential excessive or luxury expenditure when applicable
- What is a prohibited excessive or luxury expenditure
- Applicable reporting of excessive or luxury expenditure
- Mandatory results of non-compliance with this policy.
For the purpose of this policy, excessive expenditures are those that California International Bank, N.A. would reasonably consider or beyond normal limits or lacking restraint for the normal course of the bank’s business. As such, expenditure limits may differ between the lines of business.
The Excessive or Luxury Expenditures Policy is effective for all expenses or goods and services procured on or after September 14, 2009. Associates are required to read, understand and adhere to this policy as it applies to every line of business. Failure to adhere to this policy could result in the associate not being reimbursed and could further result in disciplinary action up to and including termination. Violations and perceived violations to, and exceptions from, this policy will be reported monthly to Executive Management up to and including the CEO, CFO and Board of Directors.
This policy covers reasonable expenditures for:
- Entertainment or events
- Other similar activities or events related to associate or business development, reasonable performance recognition, or other similar activities of which we provide reimbursement to associates in the normal course of the bank’s business operations.
Each month, reporting will be complied and reviewed for the following:
- Excessive or luxury expenditures that required and received prior approval
- Expenditures that reasonably appeared to be or were deemed to be excessive or luxury and did not receive prior approval
- Expenditures that were prohibited
Reporting will be reviewed by senior management as needed. Any expenditure confirmed to be excessive or luxury will be forwarded to the CEO, the CFO and other senior officers as deemed appropriate.
Entertainment or Events
California International Bank, N.A. utilizes entertainment or events to drive business and revenue growth, build shareholder value and help advance our community and philanthropic objectives. These activities are carefully and thoughtfully evaluated to ensure that they are primarily focused on legitimate business purposes and not on extraneous recreational or non-business activities. Locations, venues, activities, food selections and entertainment are determined based on (1) the revenue-generating potential of the event, (2) where it is an appropriate use of company resources and (3) whether there are alternatives available that would maximize cost savings and benefits.
Reasonable expenditures occur when the costs of entertainment or events do not exceed the expected benefit to the bank. Expected benefit will be measured by quantitative factors - including but not limited to the return or investment, return or objective, or value to the shareholder - and qualitative factors such as the business relationship or competitive advantage.
Entertainment or events that are focused on non-business activities or that are not intended to help advance our community and philanthropic objectives are prohibited. Exceptions will be captured through self-reporting of all entertainment or events and elevated to senior management.
Policy violations will be identified through periodic reviews of entertainment or events. Non-compliant expenditures may be rejected and will be reported to senior management up to and including the CEO and the CFO.
Aviation and Other Transportation
California International Bank, N.A. does not maintain a corporate aircraft. Assignment and use of a corporate automobile will be in a manner consistent with industry standards. Other transportation services are also allowed when reasonable for business development and education development purposes.
California International Bank, N.A., as a normal course of business, encourages associates to manage expenses carefully. Any expenditure that would reasonably be considered beyond normal limits or lacking restraint in the normal course of the bank’s business would be considered excessive and would be prohibited. As such no pre-approval process will be developed for purposes of this policy.
Managers review and approve significant spend prior to payment request submission. Sampling of expenses submitted for payment or reimbursement are further reviewed centrally for reasonableness. Any sampled expense that appears to be excessive will be escalated to management for review and may be escalated further to senior management and could result in the payment not being made. Such items will be reviewed monthly by senior management functions as needed. Any expenditure confirmed to be excessive, will be reported to the CEO, the CFO or other senior management as deemed appropriate.