The Board appointed Nominations Committee is comprised of 4 Board members as at 31st Julye 2019 and the chairman of the Committee is an Independent Director. The Group Chief Executive Officer (GCEO) is present at meetings only if invited by the Committee.
The Committee is responsible for and implements procedures to select/appoint new directors, GCEO and key management personnel, considers and recommends the re-election of current directors taking into account the performance and contribution made by the director/s concerned towards the overall discharge of the board's responsibilities. The Committee sets out the criteria such as qualifications, experience and key attributes required for eligibility to be considered for appointment as nominee directors to the boards of subsidiary companies and for appointment or promotion to the post of GCEO and the key management positions. The Committee also considers and recommends from time to time, the requirements of additional/new expertise and the succession arrangements for retiring directors and key management personnel.
The Board appointed Human Resources and Remuneration Committee is comprised of 4 Board members as at 01 September 2019. The Group Chief Executive Officer (GCEO) is present at meetings by invitation of the Committee except when matters relating to the CEO are discussed.
The Committee determines the human resources and remuneration policies (salaries and allowances and other financial payments) relating to Directors, the GCEO and key management personnel. The Committee also evaluates the performance of the GCEO and the key management personnel against the set targets and goals periodically and determines the basis for revising remuneration benefits and other payments of performance based incentives and considers succession plans for key management positions.
The Board appointed Strategic Issues Committee is comprised of 4 Board members as at 31st July 2019 and the Chairman of the Committee is an Independent Director as set out below. Other Board Members and Management of the Company may be present at the meetings by invitation.
The Committee is responsible for the approval of all strategic investments and divestments and recommending the same to the board, the approval of the periodical Strategic Plan (covering 3-5 years or more) and any significant amendments thereto and recommending the same to the board. The Committee provides the strategic direction and strategic thinking of the board to the management in the development and implementation of the Bank's strategic plan and also guides and assists the management in implementing strategic decisions taken by the board. The Committee further reviews and evaluates strategic issues and plans of subsidiary companies of the NDB Group to ensure that the same are in line with the strategic initiatives and strategic direction of the Bank.
Composition of the Integrated Risk Management Committee - The Committee consists of at least three non-executive Directors, Chief Executive Officer, Chief Financial Officer, VP - Group Risk Management, VP - Legal and the Compliance Officer.
The Integrated Risk Management Committee was formed in June 2008 replacing the Risk & Credit Committee of the Board, in compliance with the Section 3 (6) of Direction No. 11 of 2007, on the subject "Corporate Governance for Licensed Commercial Banks in Sri Lanka", issued by the Monetary Board of the Central Bank of Sri Lanka under the powers vested in the Monetary Board, in terms of the Banking Act No 30 of 1988. The composition and the scope of work of the Committee are in conformity with the provisions of the said Direction.
The Charter of the IRMC was approved by the Board of Directors.
The IRMC reviews the risk profile and policies of the Bank, its group companies and their application in the operations of the business in respect of the main risk categories viz. Credit Risk, Operational Risk, Liquidity Risk, Market Risk, Strategic Risk, Legal Risk, Compliance and ensure such risks are managed within the prudent levels decided by the Board of Directors.
The purpose of the Committee is to assist the Board in fulfilling its responsibility with respect to:
The Audit Committee is appointed by the Board of Directors and comprise of 3 Non-Executive Directors. The Chairman of the Committee is an Independent Director and a Fellow member of the Chartered Institute of Management Accountants (UK).
The Audit Committee is governed by a Charter and assists the Board in meeting its oversight responsibilities for maintaining an effective system of internal control, ensuring compliance with legal and regulatory requirements that may have a material impact on the Bank's financial statements, and for meeting its external financial reporting obligations. The Committee meets at least eight times for a year and the minutes of same are tabled at Board meetings
The Committee monitors and reviews the effectiveness of the Internal Audit function and on a quarterly basis discusses with management and the internal auditors the internal audit and investigation reports while the reports of the external auditors and the Regulators are reviewed on an annual basis. The Committee is also responsible for oversight and remuneration of the External auditors and annually evaluates the independence and objectivity of the external auditor and the effectiveness of the audit process.
The Board appointed Credit Committee currently comprise of four Members inclusive of three non-executive directors.
The Committee’s main responsibility is to review and approve credit proposals coming under the Committee’s Delegated Level of Authority and recommend proposals to the Board of Directors if falling beyond the limits of Committee.
Committee in line with its approved Terms of Reference will also review quarterly reports related to “Worry” categorised watch listed clients, status of overdue reviews and also recommend to the Integrated Risk Management Committee on any changes to Credit Policy.
The Board appointed Related Party Transactions Review Committee is comprised of 3 Board members as at 01 September 2019 and the chairman of the Committee is the Chairman of the Bank and an Independent Director. The Group Chief Executive Officer (GCEO) has been present at meetings only if invited by the Committee.
The Related Party Transactions Committee was formed in compliance with Section 9 of the Listing Rules of the Colombo Stock Exchange which required listed companies to constitute a Related Party Transactions Committee. The composition and the scope of work of the Committee are in conformity with the provisions of the said Section in the Listing Rules. The primary purpose of the Committee is to evaluate and consider all transactions with related parties of the Bank in order to ensure that related parties are treated on par with other shareholders and constituents of the Bank.
In carrying out the duties of the Committee the Committee is required to avoid ‘conflicts of interest’ which may arise from any transaction of the Bank with any person particularly with related parties, ensure arm’s length dealings with related parties whilst also ensuring adherence to the Corporate Governance Directions which requires the Bank to avoid engaging in transactions with related parties in a manner that would grant such parties ‘more favourable treatment’ than accorded to other constituents of the Bank carrying on the same business, to be in line with the security requirements as stated in the Banking Act Directions and to be in compliance with the approval procedure set out in the Banking Act.
Corporate Governance is the set of principles, processes and systems by which an organization is governed. They provide the guidelines on how an organization could be directed and controlled in order to achieve its objectives in a manner in which the Bank could ultimately add value to the organization and all its stakeholders. Better corporate governance leads to greater long term value.
We have in place a well-defined and well-structured governance framework. Our internal Code of Corporate Governance (the Code) incorporates applicable laws and regulations and sets out our practices for implementing the highest standards relating to corporate governance. The Code sets out the Standards the Directors and Key Management Personnel are required to maintain.
The Bank's Compliance Policy and Code of Conduct is an integral part of the Bank's governance framework and outlines the standards of professional and ethical conduct. The Bank’s Compliance Policy and Code of Conduct was reviewed and updated aligning it with the Bank’s vision, mission and values and making it a referral point for all governance related policies of Bank. The Bank’s governance framework is further supported by the implementation of a Group Anti-Bribery and Corruption Policy, a Group Securities Trading Policy and an IT Security Policy.
The Bank is governed by the Board and several Board appointed committees. The Board has overall responsibility for leading and controlling the Bank. The Board’s diversity plays a major role in this aspect as NDB’s Board consists of individuals who possess a diverse set of skills, knowledge and expertise. Further the Board embraces and encourages exchange of alternate views and ways of thinking. While board and management hold close ties to one another, their duties and responsibilities are distinctly different. The Board fully supports the Leadership Team who takes accountability in running the day to day operations of the Bank keeping in mind the agreed strategy. The Board is also supported by robust and independent risk, audit and compliance departments that provide effective oversight.
Keeping effective communication lines open with shareholders remains an important role of the Chairman and the Chief Executive officer. The views of investors and key stakeholders are escalated to the Board. In order to encourage a healthy engagement with the Bank's customers and stakeholders the Bank has in place a regularly reviewed Customer Charter, a formal Complaint Handling procedure supported by a MIS system built in-house, a Communications Policy and a Disclosure policy.
Due to the fact that good governance is evolutionary in nature we continue to innovate and adapt our governance practices and framework to meet new demands and grasp new opportunities.
National Development Bank PLC takes great effort in ensuring the wellbeing of all staff. The Bank firmly believes that an employee healthy in body and mind is able to create a more positive impact in the course of carrying out their duties at work which will in turn increase productivity. This undoubtedly will in turn increase productivity in their personal lives and in society at large.
In this light, the Bank encourages all staff to embrace a healthy work-life balance which is reflected in the many welfare programs that are organized. In addition, the Bank takes seriously the wellbeing of all staff while on duty at the Bank. In accordance with its Business Continuity Plan, the Bank has a team of trained first aid officers across the board, and trained psychological first aid officers who are available on site.
The Sports and Recreation Club (SRC) of the Bank provides all staff with a gymnasium that is available for use before and after working hours. Staff are encouraged to utilise these facilities which are fully equipped with state of the art equipment and personal trainers for guidance and support.
Internal control is a process for assuring achievement of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. The Internal Audit is an independent function providing reasonable assurance to the Board of Directors and Management in respect of the adequacy of the design and operating effectiveness of the banks internal controls.
Key processes established in reviewing the adequacy and integrity of the system of internal controls are: