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 is a key factor that enables an organization to operate effectively and achieve organizational goals. The Bank is committed to complying with laws, regulations, and good corporate governance practices, as well as promoting a culture of good governance throughout the organization. This is accomplished through our continuous efforts to enhance the knowledge and understanding of good governance practices among the Board of Directors, management and employees so that the Bank can adapt to economic, social, and environmental changes, achieve long-term positive performance, and build trust while maintaining strong relationships with all stakeholders over time.
Corporate Governance Policy
As good corporate governance is the foundation for sustainable business growth, the Bank has established a corporate governance policy and good corporate governance practices that align with internationally and nationally recognized principles and standards. The Bank aims to ensure that the Board of Directors, management and employees have the knowledge and understanding necessary to uphold these practices and integrate them into the organizational culture. The Bank’s corporate governance policy covers the treatment of shareholders and stakeholders, disclosure and transparency, the Board of Director’s responsibilities, internal controls and risk management, as well as the code of conduct and business ethics. The Bank has tasked the Corporate Governance Committee with the responsibility of regularly reviewing and updating the policy and practices to ensure they remain current and in compliance with regulatory requirements and good practices. The committee ensures the implementation of good corporate governance principles in the Bank’s operations and reports on performance to the Board of Directors.
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, goals, business direction, and both short-term and long-term business strategies. It has the authority to approve the Bank’s strategies, business plans and various policies, while also overseeing the Bank’s operations to ensure compliance with laws, the Bank’s regulations, and the resolutions of the shareholders’ meeting.
Subcommittees
Subcommittees are appointed by the Board of Directors to review, provide recommendations on, monitor and oversee operations as assigned by the Board of Directors. The subcommittees are also responsible for regularly reporting their performance to the Board of Directors. The Bank has five subcommittees as follows:
Roles, Duties and Responsibilities
The Bank clearly defines the roles, duties and responsibilities of the Board of Directors and management, and distinguishes the roles and responsibilities of the Chairman of the Board of Directors, the Chairman of the Board of Executive Directors, and the President. Each of these three positions is held by a different individual to ensure efficiency and transparency in the oversight of the Bank’s operations. Management is responsible for managing the business and driving the organization in accordance with the policies, strategies and goals set by the Board of Directors. Management is also responsible for determining operational approaches, action plans, work systems and processes, as well as managing human resources and other resources. It is further tasked with executing various activities within the scope of authority assigned by the 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, goals, business direction, and both short-term and long-term business strategies. It has the authority to approve the Bank’s strategies, business plans and various policies, while also overseeing the Bank’s operations to ensure compliance with laws, the Bank’s regulations, and the resolutions of the shareholders’ meeting.
Subcommittees
Subcommittees are appointed by the Board of Directors to review, provide recommendations on, monitor and oversee operations as assigned by the Board of Directors. The subcommittees are also responsible for regularly reporting their performance to the Board of Directors. The Bank has five subcommittees as follows:
- The Board of Executive Directors: Responsible for carrying out tasks as assigned by the Board of Directors, including the consideration and approval of loans, debt restructuring, investments, and undertaking other business activities of the Bank. It is also responsible for reviewing other matters that require approval or consent from the Board of Directors or the shareholders’ meeting resolutions, as specified by law or the Articles of Association of the Bank.
- The Audit Committee: Responsible for ensuring the accuracy and adequacy of financial reporting, reviewing and evaluating the internal control and internal audit systems to ensure they are appropriate and effective. The Audit Committee also reviews and approves the audit plans, monitors compliance with applicable laws and regulations, and ensures the internal control and internal audit systems are effective and efficient. Additionally, the committee reviews compliance with laws and regulations, considers related party transactions or those incidents with potential conflicts of interest to ensure they align with legal and regulatory requirements, and evaluates the selection and coordination with the Bank’s external auditors.
- The Nomination and Remuneration Committee: Responsible for establishing policies, criteria and procedures for the selection of the Bank’s directors, members of subcommittees, and senior executives from the level of Executive Vice President upwards. The committee considers, selects and nominates individuals for these positions to the Board of Directors. Additionally, the committee establishes policies and criteria for remuneration and other benefits, including the amount of remuneration and benefits provided to directors, members of subcommittees, and senior executives from the level of Executive Vice President upwards.
- The Risk Oversight Committee: Responsible for overseeing the Bank’s risk management to ensure it is systematic, consistent, effective, efficient, and aligned with the Bank’s strategic plan and overall risk management policies.
- The Corporate Governance Committee: Responsible for supporting the operations of the Bank’s Board of Directors in the areas of good corporate governance and sustainability by ensuring the adoption of good corporate governance and sustainability principles in practice. This includes reviewing and ensuring the established sustainability strategies are appropriate for the Bank’s business, as well as providing recommendations to the Board of Directors on issues related to environmental, social, and governance (ESG) risks and opportunities.
Roles, Duties and Responsibilities
The Bank clearly defines the roles, duties and responsibilities of the Board of Directors and management, and distinguishes the roles and responsibilities of the Chairman of the Board of Directors, the Chairman of the Board of Executive Directors, and the President. Each of these three positions is held by a different individual to ensure efficiency and transparency in the oversight of the Bank’s operations. Management is responsible for managing the business and driving the organization in accordance with the policies, strategies and goals set by the Board of Directors. Management is also responsible for determining operational approaches, action plans, work systems and processes, as well as managing human resources and other resources. It is further tasked with executing various activities within the scope of authority assigned by the Board of Directors.
Board Structure and Promotion of Board Diversity
The Board of Directors of the Bank has a structure, size and composition appropriate to the size of its business and in compliance with regulatory guidelines. At least one-third of the Board of Directors shall be independent directors whose qualifications meet the Securities and Exchange Commission (SEC) requirements. The Bank has assigned the Nomination and Remuneration Committee to select and nominate appropriate candidates for the position of director (member of the Board of Directors), following the defined process and criteria. This process considers candidates’ qualifications in terms of knowledge, capabilities, and expertise in specialized areas that benefit the Bank’s operations, as stipulated in the Board Skill Matrix, as well as their work experience and compliance with the relevant regulatory requirements. The Bank will submit the names of selected candidates to the Bank of Thailand for approval before appointing them as directors.
Promotion of Board Diversity
The Bank values a diverse Board of Directors as we believe that diversity provides a broader, more comprehensive perspective on all aspects crucial to the Bank’s business. This, in turn, leads to effective corporate governance and good performance in the long-run. The Bank has established a diversity policy for the Board of Directors to serve 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 with regard to various aspects of diversity, such as skills, expertise, experience, education, gender, age and culture. Additionally, the committee periodically reviews the appropriateness of the Board’s structure, size and diversity and reports its findings to the Board of Directors for consideration in determining the appropriate course of action.
Efficiency of the Board of Directors
Meetings
Each director has the duty and responsibility to attend every Board meeting or at least 75 percent of the meetings held in a year, in accordance with the Bank of Thailand’s regulations. The Bank holds regular Board meetings monthly, and the schedule of meetings for the next calendar year is provided to all directors in advance. The company secretary will notify the directors of the meeting dates for the year, allowing them to allocate time for attendance. The company secretary will also send out the meeting invitations, along with the agenda and supporting documents, to the directors in advance of each meeting, unless the agenda requires urgent attention.
Performance Evaluation
The Bank requires an annual evaluation of the Board of Directors’ performance to provide directors with an opportunity to review their duties over the past year and use the evaluation outcomes to enhance their individual performance as well as increase the effectiveness of the Board of Directors’ overall performance. The evaluation consists of two methods:
Development of Executives
The Bank places great importance on the continuous development of director’s skills and knowledge by supporting all directors in attending training programs that are beneficial to their duties as members of the Bank’s Board of Directors. These include programs such as the Director Certification Program and the Director Accreditation Program offered by the Thai Institute of Directors (IOD). The Bank also encourages directors to participate in training activities and seminars organized by both internal and external agencies to develop their skills and knowledge in various areas that will contribute to the development of the Bank’s business.
Evaluation of the Performance of Duties and the Determination of Remuneration for Senior Executives
The Bank’s Board of Directors is responsible for evaluating the performance of the Executive Chairman and the President, using an assessment form based on the guidelines for the CEO assessment form disseminated by the Stock Exchange of Thailand and approved by the Bank’s Board of Directors. The main evaluation topics cover areas such as leadership, strategy formulation, strategy execution, financial planning and performance, and relationships with the Board of Directors, among others. The Chairman of t h e N o m i n a t i o n a n d Remuneration Committee will inform the Executive Chairman and the President of the evaluation results. The Nomination and Remuneration Committee is responsible for considering and determining the appropriate remuneration for senior executives, including Executive Vice Presidents, Senior Executive Vice Presidents, and the President, for presentation to the Bank’s Board of Directors. Remuneration determination is linked to the Bank’s short-term and long-term performance indicators, as well as each executive’s performance. These include those performance indicators relating to financials, customer, efficiency improvement and development, human resources development, return on assets (ROA), revenue growth, credit growth, asset quality, customer satisfaction, expense management, and 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.
Each director has the duty and responsibility to attend every Board meeting or at least 75 percent of the meetings held in a year, in accordance with the Bank of Thailand’s regulations. The Bank holds regular Board meetings monthly, and the schedule of meetings for the next calendar year is provided to all directors in advance. The company secretary will notify the directors of the meeting dates for the year, allowing them to allocate time for attendance. The company secretary will also send out the meeting invitations, along with the agenda and supporting documents, to the directors in advance of each meeting, unless the agenda requires urgent attention.
Performance Evaluation
The Bank requires an annual evaluation of the Board of Directors’ performance to provide directors with an opportunity to review their duties over the past year and use the evaluation outcomes to enhance their individual performance as well as increase the effectiveness of the Board of Directors’ overall performance. The evaluation consists of two methods:
- Self-assessment: an assessment of the Board of Directors’ collective performance and each director’s individual performance.
- Cross-assessment: an assessment of other directors’ individual performance.
Development of Executives
The Bank places great importance on the continuous development of director’s skills and knowledge by supporting all directors in attending training programs that are beneficial to their duties as members of the Bank’s Board of Directors. These include programs such as the Director Certification Program and the Director Accreditation Program offered by the Thai Institute of Directors (IOD). The Bank also encourages directors to participate in training activities and seminars organized by both internal and external agencies to develop their skills and knowledge in various areas that will contribute to the development of the Bank’s business.
Evaluation of the Performance of Duties and the Determination of Remuneration for Senior Executives
The Bank’s Board of Directors is responsible for evaluating the performance of the Executive Chairman and the President, using an assessment form based on the guidelines for the CEO assessment form disseminated by the Stock Exchange of Thailand and approved by the Bank’s Board of Directors. The main evaluation topics cover areas such as leadership, strategy formulation, strategy execution, financial planning and performance, and relationships with the Board of Directors, among others. The Chairman of t h e N o m i n a t i o n a n d Remuneration Committee will inform the Executive Chairman and the President of the evaluation results. The Nomination and Remuneration Committee is responsible for considering and determining the appropriate remuneration for senior executives, including Executive Vice Presidents, Senior Executive Vice Presidents, and the President, for presentation to the Bank’s Board of Directors. Remuneration determination is linked to the Bank’s short-term and long-term performance indicators, as well as each executive’s performance. These include those performance indicators relating to financials, customer, efficiency improvement and development, human resources development, return on assets (ROA), revenue growth, credit growth, asset quality, customer satisfaction, expense management, and 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 promotes and supports all members of the Board of Directors, executives and employees to understand and adhere to the principles of good corporate governance, strictly comply with policies and practices that foster effective governance, and embed it as part of the organizational culture. The Bank communicates these policies and practices to all members of the Board of Directors, executives and employees. Additionally, the Bank encourages the Board of Directors and senior executives to participate in training or seminars on topics related to good corporate governance. It also supports executives and employees in enrolling in various courses that enhance their understanding of working under the principles of good corporate governance, such as anti-corruption, anti-money laundering and combating the financing of terrorism and the proliferation of weapons of mass destruction, business ethics, market conduct, and personal data protection. The Bank’s continued commitment to improving corporate governance is reflected in the 2024 Annual Corporate Governance Survey of Listed Companies conducted by the Thai Institute of Director, in which the Bank received a rating of “Excellent.”
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