Corporate Governance
Commitment
To ingrain good corporate governance that aligns with local and international standards in order to build trust among stakeholders and create sustainable value for business and society.
Materiality
The practice of good corporate governance enables businesses to manage their affairs efficiently and transparently, leading to the achievement of organizational goals and the building of confidence among stakeholders despite economic, social and environmental challenges. The Bank is committed to complying with laws, regulations, and good corporate governance practices, and to promoting a culture of good governance throughout the organization by continually enhancing the knowledge and understanding of good corporate governance of the Board of Directors, management and staff. Adhering to good corporate governance standards enables the Bank to effectively manage risks and respond to new business opportunities, resulting in consistently good performance and trustworthiness while creating long-term value for both society and the Bank.
Corporate Governance Policy
As good corporate governance is the foundation of an organization’s sustainable growth, the Bank has established a corporate governance policy and guidelines which align with the legal framework and good corporate governance principles. The policy outlines key principles for treatment of shareholders and stakeholders, information disclosure and transparency, responsibilities of the Bank’s Board of Directors, internal controls and risk management, and a code of conduct and business ethics, for observance and compliance by all involved parties. In addition, the Bank has assigned the Corporate Governance Committee to regularly review and set such policies and guidelines so that they are appropriate and consistent with prevailing circumstances and government regulations. The Committee is also responsible for monitoring and reviewing compliance with the Bank's good corporate governance principles.
Promotion of Board Diversity
Board Structure
The Board of Directors of the Bank has a structure, size and composition appropriate to the size of its business and complies with regulatory guidelines. At least one-third of the Board of Directors shall be independent directors whose qualifications meet the Securities and Exchange Commission’s (SEC) regulations. The Nomination and Remuneration Committee is responsible for selecting and nominating appropriately qualified individuals to serve as bank directors in accordance with the established processes and criteria. The nomination will be based on the required specific knowledge, expertise and professional skills as stipulated in the Board Skill Matrix, and the candidate will also need to have relevant work experience meet the Bank’s business needs and qualifications prescribed by the relevant regulations. The Bank will submit names of suitably qualified and selected individuals to the Bank of Thailand for approval before appointing them as directors.
Promotion of Board Diversity
The Bank recognizes that a diverse board of directors will provide different, broad, and comprehensive perspectives, covering all dimensions that are important to the Bank's business operations. This will lead to effective corporate governance and a good performance. The Bank has therefore established a Board Diversity Policy as a guideline for the selection and nomination of the Bank’s directors. The Nomination and Remuneration Committee is required to consider the qualifications of the Bank’s directors based on a diverse mix of skills, knowledge, expertise, experience, education, gender, age and culture. There will also be a periodic review of the suitability of the structure, size and diversity of the Board of Directors so that appropriate measures may be determined.
Corporate Governance Structure
Board of Directors
The Board of Directors, which is the highest authority of the Bank, is responsible for establishing, reviewing and determining the Bank’s vision, mission, policies and business goals. It sets the direction of the Bank while also considering and approving the Bank’s strategies and business plans and supervising the business operations to be in accordance with laws, the Bank’s regulations, and resolutions from shareholders’ meetings.
Subcommittees
Various subcommittees are appointed by the Board of Directors to provide opinions and monitor and supervise the Bank’s operations within their respective scope of work as assigned by the Board of Directors. The subcommittees regularly report their performance and provide recommendations to the Board of Directors so that the Board of Directors can perform its duties efficiently and effectively. The Bank has five subcommittees as follows:
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The Board of Executive Directors: Responsible for carrying out tasks assigned by the Board of Directors, as well as loan approvals, debt restructuring, investing, and undertaking other business activities of the Bank. It also reviews any issues that require approval or consent from the Board of Directors, or shareholders’ resolutions, as specified by law or the Articles of Association of the Bank.
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The Audit Committee: Responsible for reviewing the accuracy of the Bank’s financial reports and business conduct and operations in compliance with laws and the Bank’s regulations, while also reviewing and evaluating internal control and internal audit systems to ensure they are appropriate and effective. The Audit Committee also considers potential involvement in conflicts of interest and ensures compliance with relevant regulatory requirements, as well as supervising the selection of, and coordination with, the Bank’s external auditors.
- The Nomination and Remuneration Committee: Responsible for selecting and nominating a candidate to be director, member of subcommittees, or senior executive, as well as considering appropriate remuneration and other benefits for the Bank’s directors, members of subcommittees, and senior executives.
- The Risk Oversight Committee: Responsible for risk oversight and ensuring that risk management at the Bank is systematic, consistent, effective, efficient, and aligned with the Bank’s strategic plan and overall risk management policy.
- The Corporate Governance Committee: Responsible for supporting the Board of Directors in upholding good corporate governance and sustainability at the Bank by ensuring that the principles of good corporate governance and sustainability are effective and practiced. The committee is also responsible for ensuring strategic plans for sustainability are appropriate for the Bank’s business operations and providing opinions to the Board of Directors on the risks and opportunities relating to environmental, social and governance issues.
Roles, Duties and Responsibilities
The Bank clearly defines the roles, duties and responsibilities of the Board of Directors and management, while also defining the roles and responsibilities of the Chairman of the Board of Directors, the Chairman of the Board of Executive Directors, and the President. Each such position shall be assumed by a different person for efficiency and the transparency of good corporate governance and internal operations. The management is responsible for managing and driving the organization in accordance with the policies, strategies and goals set by the Board of Directors; putting in place appropriate operational guidelines and action plans, work systems and work processes; as well as managing of human resource and other resources to be appropriate and supportive to the achievement of established goals. It is also responsible for various operations under the scope of authority assigned by the Board of Directors.
Efficiency of the Board of Directors
Meetings
All directors are required to attend the Board’s meetings and must attend at least 75 percent of all the meetings during the year in compliance with the Bank of Thailand's regulations. The Bank holds the meetings on a monthly basis and the schedule of the meetings for the next calendar year is provided to all directors in advance so that the directors can allocate time to attend all the meetings. The company secretary will send the meeting invitation letter together with supporting documents to directors prior to each meeting, except when there is an urgent agenda. In 2023, a total of 12 meetings were held. All directors attended more than 75 percent of the meetings during the year. The average meeting attendance of the Board of Directors was xx percent of the total number of meetings in the year.
Performance Evaluation
The Bank conducts a performance evaluation of the Board of Directors annually so that all directors have an opportunity to review their performance during the past year and use such evaluation results to improve and develop their individual performance as well as to increase the efficiency of of the Board of Directors’ collective performance. There are two methods of performance evaluation: 1. Self-assessment: an assessment of the Board of Directors’ collective performance and each director’s own performance; and 2. Cross-assessment: assessment of other directors’ individual performance. Both methods use assessment forms approved by the Board of Directors. The company secretary is responsible for distributing and collecting assessment forms to and from directors for submission to the Nomination and Remuneration Committee to compile and summarize the evaluation results and finally report to the Board of Directors for acknowledgment.
Development of Executives
The Bank places importance on encouraging all directors to develop their skills and knowledge regularly by encouraging them to attend training courses that are beneficial for the performance of their duties as directors, such as the Director Certification Program and the Director Accreditation Program of the Thai Institute of Directors Association (IOD). They are also encouraged to participate in training activities and seminars organized by internal and external agencies to develop skills and knowledge in various fields that would benefit the performance of the duties of the Bank’s Board of Directors.
Evaluation of the Performance of Duties and the Determination of Remuneration for High-Level Executives
The Bank's Board of Directors evaluates the performance of the duties of the Executive Chairman and the President by using an assessment form prepared according to the guidelines for the CEO assessment form disseminated by the Stock Exchange of Thailand. The performance evaluation covers areas such as leadership, strategy determination, strategy execution, financial planning and performance, and relationships with the Board of Directors, etc. The Chairman of the Nomination and Remuneration Committee will inform the results of the evaluation to the Executive Chairman and the President for acknowledgment. The Nomination and Remuneration Committee is responsible for determining appropriate remuneration for high-level executives from the Executive Vice Presidents, Senior Executive Vice Presidents, and the President, and presenting to the Executive Chairman for further presenting to the Bank's Board of Directors for consideration. The level of remuneration is determined by assessing short-term and long-term performance indicators of the Bank and of each executive. Examples of performance indicators include those related to financial performance, customer relations, efficiency improvements and developments, personnel development, return on assets (ROA), revenue growth, credit growth, asset quality, customer satisfaction, expense management, as well as performance indicators measuring the Bank's competitiveness compared to that of other leading financial institutions and companies in Thailand, such as overall return on equity.
All directors are required to attend the Board’s meetings and must attend at least 75 percent of all the meetings during the year in compliance with the Bank of Thailand's regulations. The Bank holds the meetings on a monthly basis and the schedule of the meetings for the next calendar year is provided to all directors in advance so that the directors can allocate time to attend all the meetings. The company secretary will send the meeting invitation letter together with supporting documents to directors prior to each meeting, except when there is an urgent agenda. In 2023, a total of 12 meetings were held. All directors attended more than 75 percent of the meetings during the year. The average meeting attendance of the Board of Directors was xx percent of the total number of meetings in the year.
Performance Evaluation
The Bank conducts a performance evaluation of the Board of Directors annually so that all directors have an opportunity to review their performance during the past year and use such evaluation results to improve and develop their individual performance as well as to increase the efficiency of of the Board of Directors’ collective performance. There are two methods of performance evaluation: 1. Self-assessment: an assessment of the Board of Directors’ collective performance and each director’s own performance; and 2. Cross-assessment: assessment of other directors’ individual performance. Both methods use assessment forms approved by the Board of Directors. The company secretary is responsible for distributing and collecting assessment forms to and from directors for submission to the Nomination and Remuneration Committee to compile and summarize the evaluation results and finally report to the Board of Directors for acknowledgment.
Development of Executives
The Bank places importance on encouraging all directors to develop their skills and knowledge regularly by encouraging them to attend training courses that are beneficial for the performance of their duties as directors, such as the Director Certification Program and the Director Accreditation Program of the Thai Institute of Directors Association (IOD). They are also encouraged to participate in training activities and seminars organized by internal and external agencies to develop skills and knowledge in various fields that would benefit the performance of the duties of the Bank’s Board of Directors.
Evaluation of the Performance of Duties and the Determination of Remuneration for High-Level Executives
The Bank's Board of Directors evaluates the performance of the duties of the Executive Chairman and the President by using an assessment form prepared according to the guidelines for the CEO assessment form disseminated by the Stock Exchange of Thailand. The performance evaluation covers areas such as leadership, strategy determination, strategy execution, financial planning and performance, and relationships with the Board of Directors, etc. The Chairman of the Nomination and Remuneration Committee will inform the results of the evaluation to the Executive Chairman and the President for acknowledgment. The Nomination and Remuneration Committee is responsible for determining appropriate remuneration for high-level executives from the Executive Vice Presidents, Senior Executive Vice Presidents, and the President, and presenting to the Executive Chairman for further presenting to the Bank's Board of Directors for consideration. The level of remuneration is determined by assessing short-term and long-term performance indicators of the Bank and of each executive. Examples of performance indicators include those related to financial performance, customer relations, efficiency improvements and developments, personnel development, return on assets (ROA), revenue growth, credit growth, asset quality, customer satisfaction, expense management, as well as performance indicators measuring the Bank's competitiveness compared to that of other leading financial institutions and companies in Thailand, such as overall return on equity.
Corporate Governance Culture
The Bank encourages and supports all members of the Board of Directors, executives and employees to understand and adhere to the principles of good corporate governance and to strictly follow the Bank's corporate governance policy and practices so that they are embedded in the organizational culture. In creating a corporate governance culture in the organization, the Bank focuses on communicating concerned policies and practices to all executives and employees, while also encouraging the Board of Directors and executives to attend trainings and seminars on topics related to corporate governance. The Bank also supports executives and employees throughout the organization to participate in various courses that help enhance their understanding of how to put into practice the principles of corporate governance, such as courses on anti-corruption, anti-money laundering, and combating the financing of terrorism, financing the proliferation of weapons of mass destruction, business ethics, providing fair service to customers, and personal data protection, etc. The Bank's determination to continuously develop corporate governance is reflected in the results of the 2023 Corporate Governance Survey of Listed Companies by the Thai Institute of Directors (IOD) in which the Bank received a rating of “Excellent”.
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