COMPOSITION, MEETINGS AND FRAMEWORK:
3.1 Membership: Membership will comprise of minimum four members, appointed by the Board of Directors. The Directors would be only ‘independent’ Directors or, alternatively, only non-executive Directors of whom a majority is independent Directors and the Chairman is an independent Director. The members of the Committee can be changed/removed by the Board at any time.
3.2 Tenure: The tenure of the Committee shall be of one year. The tenure of the Director who joins in between would be for the remaining period of the year.
3.3 Meetings: The Committee will normally meet twice in a year. The Chairman may convene a meeting of the Committee at any time on reasonable notice. Participation in the meeting through video / Tele conferencing is permitted in keeping with the provisions of the Board Charter. The meeting would be normally be synchronized with the Board meetings. Attendance by Proxies is not permitted.
3.3.1. Each Committee member can only attend one Committee meeting via telephone conference or video conference per annum and only one member is allowed to participate via the said means per meeting (on a first apply first serve basis) for scheduled meetings only. However, for unscheduled meetings it will be decided upon on a case by case basis.
3.4 Quorum: The quorum shall be of more than half of the members and must include the Chairman or the Deputy Chairman. The decisions/resolutions shall be adopted by simple majority of the participating members. The Chairman shall not have additional vote. In the absence of the Chairman and his Deputy, and on exceptional basis, the Committee may meet and the attending members shall elect the Chairman for the particular meeting; however if the quorum is not established then the exceptional issues shall be raised to the Board.
3.5 Chairman/Deputy Chairman: The Chairman/Deputy Chairman would be appointed by the Board or alternatively elected by the members of the Committee.
3.6 Secretary: The Corporate Secretary shall be the secretary to the Committee and attend all meetings of the Committee.
3.7 Resources: The Committee will be supported by the Corporate Secretary and the Head of Human Resources.
3.8 Minutes: The minutes of the Committee meetings shall be approved by the Committee at the end of each meeting. The final minutes shall be circulated to the members of the Committee not later than 5 working days. The minutes of each meeting will be circulated by the Corporate Secretary to all members and additionally to other attendees as appropriate. The Chairman will report to the Board in writing on the proceedings of Committee meeting following each meeting of the Committee. The minutes will be part of the agenda of the Board under items for information.
3.9 Disclosure: The membership of the Committee, description of its duties and activities and attendance during the year may be disclosed in the Annual Report and to the shareholders.
3.10 Attendees: Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chief Executive, Deputy Chief Executive Whole Sale Banking, Deputy Chief Executive Retail Banking and the Head of Human Resources, and others may be invited to attend for all or part of any meeting as and when appropriate.
3.11 Resolution by Circulation: Any transaction of business of the Committee to be conducted by circulation shall require unanimous approval, allowing three business days following sending the related documents for response. If no response is received within that period the issue shall be considered as approved by the concerned Director. The Corporate Secretary should ensure that the documents related to the proposed resolution are received by all members of the Committee.
3.12 Training: The Committee shall make available to its new members a suitable induction and ongoing training where appropriate, as discussed with the Committee.
3.13 General: The Committee will be guided by provisions under the Memorandum of Association and Articles of Association, Board Charter on matters related to its functioning and not specified in this document.
TERMS OF REFERENCE:
5.1 DUTIES AND RESPONSIBILITIES OF THE CHAIRMAN
The Chairman is responsible for:
5.1.1 Ensuring Committee meetings are duly convened and that required quorum is present when required.
5.1.2 Approving agenda and related materials for the Committee meetings.
5.1.3 Ensuring that the meetings are conducted in an efficient and effective manner.
5.1.4 Ensuring that the Committee has sufficient information to take decisions.
5.1.5 Providing leadership to the Committee and assisting it in its responsibilities.
5.1.6 Reporting to the Board on deliberations and recommendations of the Committee in writing .
5.1.7 Monitoring functioning of the Committee as per its Terms of Reference.
5.1.8 The Chairman or his Deputy shall be available at the Annual General Meeting to answer questions relating to the Committee’s functions.
5.2 DUTIES AND RESPONSIBILITIES OF THE COMMITTEE
In broad terms the Committee’s role and responsibilities is primarily to asses, evaluate and advise the Board of Directors on all matters associated with nominations and remunerations of the Directors and the Executive Management. The specific responsibilities under each function of the committee are as follows:
Under nomination role, the Committee shall:
5.2.1 Provide recommendations and advise to the Board (for submission to the Shareholders) in addition to the following specific information to be submitted to the shareholders for election or re-election of a Director:
126.96.36.199 The term to be served, which may not exceed three years (but there need not be a limit on reelection for further terms)
188.8.131.52 Biographical details and professional qualifications.
184.108.40.206 In the case of an independent Director, a statement that the Board has determined that the criteria in Appendix A of the Corporate Governance Code have been met,
220.127.116.11 Any other Directorships held,
18.104.22.168 Particulars of other positions which involve significant time commitments.
22.214.171.124 Details of any relationships between the candidate and the company or its Directors.
5.2.2 Identify and nominate for the approval of the Board of Directors candidates qualified to become members of the Board of Directors of the Bank or its subsidiaries or other shareholding companies or officers within the Executive Management team., Head of controlled functions reporting directly to Board committees shall be selected and appointed by the respective Board committee. In performing the nomination responsibilities, the Committee shall consider any criteria approved by the Board and such other factors as it deems appropriate. These may include judgment, specific skills, experience with other comparable businesses, the relation of a candidate’s experience with that of other Directors, and other factors.
5.2.3 Make recommendations to the Board of Directors from time to time as to changes the Committee believes to be desirable to the size of the Board or any Committee of the Board.
5.2.4 Whenever a vacancy arises (including a vacancy resulting from an increase in Board size), the Committee shall recommend to the Board a candidate to fill the vacancy either through appointment by the Board or through Shareholders election.
5.2.5 Review the leadership needs of the Group and its organization structure with a view to ensuring the continued ability of the organization to compete effectively in the market place. This shall also include preparation and review of job descriptions of the Chief Executive and other members of the Executive Management, as well as other necessary qualifications.
5.2.6 Ensure that orderly and timely succession plan is in place to address any unforeseen vacancy within the Executive Management team.
5.2.7 The number of other company boards on which a Director may serve shall be subject to a case-by-case review by the Committee, in order to ensure that each Director is able to devote sufficient time to perform his or her duties as a Director.
5.2.8 The Committee will oversee and manage the annual formal performance evaluation process conducted on Board, its committees and members as per the agreed upon process adopted by the Board of Directors.
Under remuneration role the Committee shall:
5.2.9 Review and recommend remuneration and HR policies for the approval of the Board. The general framework of the remuneration policies shall be approved by the Shareholders approval.
5.2.10 Approve remuneration amounts; including fixed and variable pay, for members of executive management or head of control functions reporting directly to the Board committees. This shall include hiring salary, exceptional benefits or variable pay and salary increases that exceed the approved total increase matrix or promotion policy. In case of Chief Executive, the committee shall raise its recommendation with regards to the above for the approval of the Board of Directors.
5.2.11 Approve the variable pay for the other approved persons and material risk takers per the approved human resources policy.
5.2.12 The remuneration policy should cover the following components:
• Compensation strategy
• Salary & grading structure.
• The specific terms of any performance-related incentive plans including performance share plans, stock options, merit bonus or other deferred-benefit compensation.
• Pension plans and fringe benefits such as non-salary perquisites.
• Retention Schemes.
• Termination policies including any severance payment policies.
The remuneration policy shall also include guidelines to be used for determining remuneration in individual cases, including relative importance of each component and Specific criteria to be used in evaluating the performance of the Executive.
5.2.13 Evaluate the annual performance of the Chief Executive in terms of achievements of the corporate goals and objectives. In determining the reward, the Committee shall take into consideration, overall achievement and performance of the Group, Shareholder return relative to comparable companies, the value of rewards to CE’s offered by comparable companies, and awards paid to the CE in past years.
5.2.14 Remuneration of both Directors and officers should be sufficient enough to attract, retain and motivate persons of the quality and competency needed to run the company successfully, but the company should avoid paying more than is necessary for that purpose.
5.2.15 Ensure remuneration is adjusted for all types of risks and that the remuneration system takes into consideration employees that earn same short-run profit but take different amount of risk on behalf of the Bank.
5.2.16 The Committee should ensure that for material risk takers, variable remuneration forms a substantial part of their total remuneration.
5.2.17 Review the stress testing and back testing results before approving the total variable remuneration. Carefully evaluate practices by which remuneration is paid for potential future revenues whose timing and likelihood remain uncertain. The Committee will question payouts for income that cannot be realized or whose likelihood of realization remains uncertain at the time of payment.
5.2.18 Ensure that for approved persons in risk management, internal audit, operations, financial controls, AML and compliance functions the mix of fixed and variable remuneration is weighted in favor of fixed remuneration
5.2.19 Recommend Board member remuneration based on their attendance and performance and in compliance with Article 188 or any other relevant articles of the Company Law.
5.2.20 Ensure appropriate compliance mechanisms are in place to ensure that employees commit themselves not to use personal hedging strategies or remuneration-and liability-related insurance to undermine the risk alignment effects embedded in their remuneration arrangements.
5.2.20 Discuss and approve or recommend to the Board the cases relating to Malus and Clawback as appropriate.
Under Corporate Governance role the Committee shall:
5.2.21Periodically review Bank’s governance practices and relevant issues, including opportunities for improving the governance framework. Monitor Group’s adherence with applicable legal, regulatory and listing requirements relating to Corporate Governance; and make recommendations to the Board as appropriate.
5.2.22Develop and recommend to the board corporate governance guidelines, and review those guidelines at least once a year
5.2.23Periodically assess and review the role of the Board and its committees and the methods and processes by which the Board discharges its duties and responsibilities, including the process for the Board’s annual self-evaluation and make recommendations to the Board with respect to such methods and processes.
5.2.24Advise the Board with respect to significant developments in the law and practice of corporate governance; periodically review and recommend to the Board, the composition of various committees of the Board.
5.2.25Periodically review the Board Profile and Corporate Governance related policies such as Corporate Governance Framework, Board Charter, Code of Conduct, Conflict of interest, Director’s compensation etc and recommend to the Board such changes as it considers appropriate.
5.2.26Assess, from time to time, if any third party evaluations, are desirable.
5.2.27Consider other issues referred to it by the Board or Management.
5.2.28Review whether there is a satisfactory induction for new directors with respect to their Board and Board committee responsibilities and ensure that an appropriate ongoing training program is in place in line with market practice. Periodically review the orientation programs for new directors.
5.2.29Review any material information to be made available to public by the Bank relating to corporate governance; Review corporate governance disclosures for the Annual Report and to be made to the shareholders.
5.2.30Review the annual Corporate Governance report for the Annual General Meeting.
5.2.31Meet separately with Senior Management, employees or independent advisers, as deemed necessary by the Committee.
5.2.32Engage at its discretion professional advisers on issues before the Committee at Bank’s cost.
5.2.33Conduct a review of the Conflicts of Interest events and review if any disclosures relating to conflicts of interest are to be made public.
5.3 TRAINING & COMPTENCY
The Committee shall be responsible for the following with regards to Directors and the group Chief Executive training and competency:
5.3.1Define minimum competency requirements.
5.3.2Describe the process for monitoring and tracking competencies and skills to ensure that competency levels are attained within the established time frames.
5.3.4Outline assessment criteria and requirements
5.3.5Outline training and personal development requirements.
5.3.6Allocate the CPD training budget.
Determine and confirm whether competency requirements are met.
The Committee will conduct an annual self-assessment of the performance of the Committee/members and report conclusions and recommendations to the Board. The mechanism of evaluation would be as per the evaluation process adopted by the Board for its committees.