Introduction
The Board of Directors of KASIKORNBANK PUBLIC COMPANY LIMITED (“the Board”) strongly believes that good corporate governance will enhance the performance of the Bank, and is central to achieving the Bank's principle objective of maximizing shareholder value.
The Board is responsible, by law, for governing the Bank’s business conduct, and responsible to all the Bank’s stakeholders: customers, shareholders, employees, service providers and the community.
The Management is responsible for the day-to-day operations of the Bank. The role of the Board is to ensure that management operates in the best interests of the Bank and its stakeholders by working to elevate corporate economic value of the Bank.
The relationship between the Board and management is one of partnership. Whereas the Chief Executive Officer and President are responsible to the Board for the day-to-day management of the Bank in relation to operation planning, decision making and implementation, the Board provides strategic oversight, tactical recommendation and monitoring of implementation and results.
Objective
It is the intention that the Board, in cooperation with management to conducts the affairs of the Bank with determined effort to achieve performance excellence, taking into account business sustainability as well as the prevalent and future risk environment, consistent with the Bank's statement of Vision, Purpose and Business Conduct and in accordance with good corporate governance practices.
Board Structure
The Board shall comprise no less than 7 members and no more than 18 members and its quorum shall be not less than half of all directors participating in the meeting.
The Board is to comprise of: 1) Executive directors, 2) Non-executive directors, and 3) Independent directors, who have qualifications per the definition of “Independent Director”, as attached, for not less than one-third of all directors but no less than three directors.
Directors shall comprise persons of requisite qualifications and experience who can bring quality and fair judgments, free of bias, to all issues. They shall be deemed fit to be proposed for appointment as directors by the Human Resources and Remuneration Committee
The Chairman of the Board can be either an independent or a non-executive director and the Chief Executive Officer and the President can be one and the same person.
One-third or the proportion closest to one-third of all directors shall vacate office at each of the Annual General Meeting of Shareholders. Directors holding the longest terms shall vacate office first. If an agreement for vacating office cannot be reached among directors, a lot drawing shall be adopted. Any director vacating office on due term can be re-elected.
The directors shall not exceed the age limit of 72 years old and Independent directors shall hold their position for no more than 9 consecutive years.
Meetings of the Board shall be held every month except under unavoidable circumstances but with the minimum frequency of once per three months. And there may be extra meetings as deemed appropriate. All directors are expected to attend every meeting, or no less than 75 percent of the Board of Directors meetings arranged each year, except under unavoidable circumstances.
On appointment, each director shall receive information about the Bank and be advised of the legal, regulatory and other obligations of a director of a listed company on the Stock Exchange of Thailand.
Directors may request for independent professional advice, as appropriate, at the Bank’s expense.
Authorities, Duties and Responsibilities
The roles and responsibilities of the Board are clearly delineated. The areas and manner of the Board’s involvement to obtain the maximum effect from corporate governance, which should cover the following:
Authorities, duties and responsibilities of the Chairman of the Board
- Summon the meetings of the Board of Directors and supervise the delivery of meeting notices and related documents so as to ensure that the Board of Directors acquire adequate and timely information;
- Preside over the Board of Directors meeting;
- Promote CG standards of the Board of Directors;
- Preside over the Shareholders meeting and conduct the meeting in compliance with the Bank Articles of Association and follow the sequence of the agenda;
- Promote good relationships between the directors and between the directors and management;
- Supervise efficient communications between the directors and shareholders;
- Perform the duty specified by law as the duty to be performed by the Chairman.
Authorities, Duties and Responsibilities of the Board
- Strategies, Business Plan and Budget
- Review and discuss Management’s proposed strategic options and approve major decisions in respect of KASIKORNBANK FINANCIAL CONGLOMERATE direction and policy, including sustainable development undertakings.
- Review and approve Management’s initiated annual Business Plan and Capital Expenditure Budget, other performance goals as well as all the major initiatives central to the achievement of the goals.
- Authorities
- The Board shall vest in the Chief Executive Officer or President the authorities to initiate, commit and approve payments for all the expenditures approved in the Business Plan and Capital Expenditures Budget. Compliance is required with the Authority Manual, which delineates cascading levels of authorities.
- The Board grants the Chief Executive Officer a discretionary expenditure limit to initiate expenditure or projects outside of the approved Business Plan and Capital Expenditure Budget.
For a major initiative costing over the discretionary expenditure limit of the Chief Executive Officer, the Board shall review the case prior to approving management’s proposals. - All credit proposals over and above an agreed ceiling shall come to the Board for review and approval.
All financial transactions over the agreed limits of the Chief Executive Officer and President shall be approved by the Board.
- Monitoring
- Monitor the progress of various strategic corporate initiatives, including sustainable development undertakings, human resources initiatives, which could materially impact the achievement of the Bank’s strategy or significantly change strategy.
- Monitor performance against goals and budgetary control at least every quarter and where results fall short, discuss corrective actions. Such goals should be broadly based covering short as well as longer term and include among others key performance indicators and competitor comparisons.
- Human Resources
- Review with management and approve the human resources vision and strategy and management development plans.
- Review with management and approve the Bank’s remuneration strategy in relation to its ability to attract and retain high potential staff, including special incentives to senior executives.
- Review and approve key management succession plans with the Chief Executive Officer or President in respect of finding the most suitable and qualified potential replacements.
- Review and approve performance-oriented incentives.
- Ensure that the Bank has an executive management team with the appropriate skills, competency, knowledge and experience to effectively and successfully run the Bank.
- Ensure that there is an effective process for evaluating the performance of senior executives.
- Appraise the performance of the Chief Executive Officer and President against agreed annual objectives of the Bank in general. Reward or remove on basis of performance.
- Find and appoint successor of the Chief Executive Officer and President.
- Establish terms and conditions for employment of the Chief Executive Officer and President.
- Integrity Oversight
- Foster corporate culture, review and approve Bank’s Statement of Vision, Purpose and Business Conduct for validity and ensure its communication to all levels within the Bank.
- Approve quarterly and annual financial reports; ensure high quality financial reporting to shareholders.
- Oversee internal audit process as an important control function.
- Ensure that external auditors perform their work effectively by continually evaluating their performance, and by the nomination of suitable auditors, including making sure that there is a process in submitting the management letter from the external auditors and opinion of management to the Board within four months after the end of an accounting period.
- Formulate or approve sound risk governance framework and oversee the instillation of risk-based organizational culture.
- Ensure that effective risk management and appropriate systems and processes are sufficiently in place to identify, assess, monitor and manage major risks.
- Ensure an effective system of controls is in place for reliability and integrity of information, compliance with policies and procedures, and with applicable laws and regulations, safeguarding of assets and economical and efficient use of resources.
- Ensure there is capital adequacy, including an appropriate capital assessment process, for present and future business.
- Address potential conflict of interest issues and situations.
- Protect and enhance the reputation of the Bank.
- Communications with Stakeholders and the Public
Ensure the Bank has proper systems in place to communicate effectively with its Stakeholders and the Public and monitor their application. - Credit and Investment Screening Committee and Board Committees
- Establish the Credit and Investment Screening Committee to examine credit and investment requests under authority of the Board of Directors, and other material matters, assigned by the Board of Directors, for the benefits of the Bank and stakeholders, as well as efficiency and effectiveness of the Board of Directors
- Establish the Board Committees, which include the Audit Committee, the Human Resources and Remuneration Committee, the Risk Oversight Committee and such other Board committees as may be required from time to time to assist the Board in fulfilling its responsibilities.
- Consider and approve functions and responsibilities of the Credit and Investment Screening Committee and the Board Committees, changes in their composition as well as changes that significantly affect the Committees’ duty.
- Board’s effectiveness
Establish the Board’s performance evaluation criteria and practices and assess regularly its own effectiveness.
Definition of Independent Director
The Bank has defined the qualification of “Independent Director” more restrictive than the criteria set by the Capital Market Supervisory Board and in accordance with the Bank of Thailand’s criteria, as follows:
- Holding not more than 0.5 percent of the Bank’s shares with voting rights, or that of any subsidiary company, associated company, major shareholder or controlling person of the Bank, which shall be inclusive of the shares held by any related person of such an independent director;
- Neither being nor having been a non-independent director, an executive director, a manager, an employee, a staff member, an adviser who receives a regular salary, or a controlling person of the Bank, company in KASIKORNBANK FINANCIAL CONGLOMERATE, subsidiary company, associated company, subsidiary company at the same level, major shareholder or controlling person of the Bank unless the foregoing status has ended for not less than 2 years;
- Not being a person related by blood or registration under law, such as father, mother, spouse, sibling, or child, including the spouse of a child, of other director, any executive, major shareholder, controlling person or person to be nominated as a director, an executive or a controlling person of the Bank or subsidiary company;
- Neither holding nor having held a business relationship with the Bank, subsidiary company, associated company, major shareholder or controlling person in a manner which may interfere with his/her independent judgment, and neither being nor having been a substantial shareholder or a controlling person of any person having a business relationship with the Bank, subsidiary company, associated company, major shareholder or controlling person unless the foregoing relationship has ended for not less than 2 years,
The aforementioned “business relationship” includes any normal business transaction, rental or lease of immovable property, transaction relating to assets or services, or grant or receipt of financial assistance through receiving or extending loans, guarantee, providing assets as collateral, including any other similar actions, which result in the Bank or counterparty being liable to indebtedness payable to the other party in the amount of 3 percent or more of the net tangible assets of the Bank or Baht 20 million or more, whichever is lower. The amount of such indebtedness shall be calculated according to the calculation method for value of connected transactions under the Notification of the Capital Market Supervisory Board concerning regulations in respect of an entering into connected transaction mutatis mutandis. The combination of such indebtedness shall include indebtedness taking place during the course of 1 year prior to the date on which such a business relationship with the person commences; - Neither being nor having been an auditor of the Bank, subsidiary company, associated company, major shareholder or controlling person and not being a substantial shareholder, controlling person or partner of an audit firm which employs auditors of the Bank, subsidiary company, associated company, major shareholder or controlling person unless the foregoing relationship has ended for not less than 2 years;
- Neither being nor having been any professional adviser including legal adviser or financial adviser who receives an annual service fee exceeding Baht 2 million from the Bank, subsidiary company, associated company, major shareholder or controlling person, and not being a substantial shareholder, controlling person or partner of the professional adviser, unless the foregoing relationship has ended for not less than 2 years;
- Not being a director who has been appointed as a representative of the Bank’s director, major shareholder, or shareholder related to the major shareholder;
- Not undertaking any business the nature of which is the same as that of the Bank or subsidiary company and which, in any material respect, is competitive with business of the Bank or subsidiary company or not being a substantial partner in the partnership, a director who is involved in management, an employee, a staff member, an adviser who receives a regular salary, or a shareholder holding more than 1 percent of shares with voting rights of a company undertaking any business the nature of which is the same as that of the Bank or subsidiary company and which, in any material respect, is competitive with business of the Bank or subsidiary company;
- Not being an independent director who holds the position for more than 9 consecutive years, including the period during which he / she serves as an independent director of the Bank, company in KASIKORNBANK FINANCIAL CONGLOMERATE, subsidiary company, associated company, subsidiary company at the same level. If an independent director has held the position for 9 years and wishes to be re-appointed as an independent director, he / she shall vacate from the position of director, manager, employee, staff member, adviser who receives a regular salary, or controlling person of the Bank, company in KASIKORNBANK FINANCIAL CONGLOMERATE, subsidiary company, associated company, subsidiary company at the same level, major shareholder or controlling person of the Bank for not less than 2 years.
In addition, for an independent director who has held the position for less than 9 years, if he / she has vacated from the position for less than 2 years and while over that period, he / she has not been appointed as a director, a manager, an employee, a staff member, an adviser who receives a regular salary, or a controlling person of the Bank, company in KASIKORNBANK FINANCIAL CONGLOMERATE, subsidiary company, associated company, subsidiary company at the same level, major shareholder or controlling person of the Bank, he / she may be reappointed as an independent director but the period, which he / she serves as an independent director must all be counted; - Not having any characteristics that prohibit the expression of independent opinion towards the Bank’s business undertakings.
The previous directorial records as an independent director to be brought up for consideration shall comply with the above criteria, except under exemption in accordance with the Notification of the Capital Market Supervisory Board.
After being appointed as an independent director with the characteristics as stipulated above, an independent director may be assigned by the Board of Directors to make a decision on the business operations of the Bank, subsidiary company, associated company, subsidiary company at the same level, major shareholder, or controlling person of the Bank in the form of collective decision.
In case where the appointed independent director has or used to have a business relationship at a value exceeding the specified amount under item 4, the Bank shall obtain an opinion of the Board of Directors indicating that after a consideration in accordance with the principle in Section 89/7 of the Securities and Exchange Act B.E.2535, the appointment of such person does not affect the discharge of duties and the giving of independent opinions, and relevant information has also been disclosed in the notice calling the shareholders’ meeting under the agenda for the election of independent director.