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.
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:
22.214.171.124 The term to be served, which may not exceed three years (but there need not be a limit on reelection for further terms)
126.96.36.199 Biographical details and professional qualifications.
188.8.131.52 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,
184.108.40.206 Any other Directorships held,
220.127.116.11 Particulars of other positions which involve significant time commitments.
18.104.22.168 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 appointments of officers within the Executive Management, with the exception of the Head of Internal Audit whose appointment shall fall under the responsibility of the Audit 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 amounts for each approved persons and material risk-taker, except for the CE, as well as total variable remuneration to be distributed, taking account of total remuneration including salaries, fees, expenses, bonuses and other employee benefits. Concerning the CE, the aforementioned remuneration components shall be recommended by the Committee to the Board for approval.
5.2.11 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.
5.2.12 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.
5.2.13 Remuneration of both Directors and officers should be sufficient enough to attract, retain and motivate persons of the quality needed to run the company successfully, but the company should avoid paying more than is necessary for that purpose.
5.2.14 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.
5.2.15 The NRCG should ensure that for material risk takers, variable remuneration forms a substantial part of their total remuneration.
5.2.16 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 NRCG will question payouts for income that cannot be realized or whose likelihood of realization remains uncertain at the time of payment.
5.2.17 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
5.2.18 Recommend Board member remuneration based on their attendance and performance and in compliance with Article 188 of the Company Law.
5.2.19 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.
5.3 TRAINING & COMPTENCY
The NRCG shall be responsible for the following with regards to Directors and the group Chief Executive training and competency:
5.3.1 Define minimum competency requirements.
5.3.2 Describe the process for monitoring and tracking competencies and skills to ensure that competency levels are attained within the established time frames.
5.3.3 Outline assessment criteria and requirements
5.3.4 Outline training and personal development requirements.
5.3.5 Allocate the CPD training budget.
5.3.6 Determine and confirm whether competency requirements are met.
5.4 SELF-ASSESSMENT/PERFORMANCE EVALUATION:
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.