according to a corporate governance survey of registered companies conducted by the Thai Institute of Directors Association.
The Board of Directors of KASIKORNBANK (“the Board”) strongly believes that good corporate governance will enhance the sustainable growth of performance of the Bank, and is central to achieving the Bank’s primary objective of maximizing shareholder value. The corporate governance practices at KASIKORNBANK provide the structure which enables this objective to be achieved, whilst ensuring that the business and affairs of the Bank are conducted competitively under high ethical standards and in accordance with the law.
The Board has confirmed that, as a leading financial institution in Thailand, it embraces the main characteristics of good corporate governance, namely:
This “Statement of Corporate Governance Principles” reflects the values, practices and directions that apply within the Bank, as determined and approved by the Board.
The Board is accountable to all shareholders. Each director represents all shareholders, and is expected to participate in the governance of the Bank both independently and objectively for the benefit of all shareholders and other key stakeholders.
The role of the Board is to oversee the Bank’s management, ensuring that management are continually striving for superior performance, taking into account risk.
The function of the Board is to:
The Board is to comprise: 1) Executive Directors numbering not more than one-fourth of all Directors, 2) Non-executive Directors, as independent Directors, numbering not less than one-third of all Directors but no less than three directors, and 3) Other non-executive Directors.
The directors shall have a range of skills and experience to bring independent judgement, effective leadership and considerable knowledge to the Board’s discussions. On appointment, each director shall receive information about the Bank and clarification of legal and regulatory constraints and other obligations of a director of a listed company of the Stock Exchange of Thailand. Directors may take independent professional advice at the Bank’s expense, in appropriate circumstances.
All of the directors shall have access to the advice and services of the Corporate Secretary, who is responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with.
The Chairman of the Board can be either an executive or a non-executive Director and the Chairman of the Board and the Chief Executive Officer can be one and the same person. The Chief Executive Officer and the President can also be one and the same person.
The Board of Directors shall appoint the Independent Directors Committee and an independent director as Lead Independent Director, under recommendation by Independent directors, in order to maintain a check-and-balance between the Board and the management.
The duties of the Chairman of the Board:
The duties of the Lead Independent Director:
There is to be a clear division between the responsibilities of management and of the Board. The Board shall not ordinarily become involved in management issues or in managing the implementation of Board policy. The Board’s role includes the task of monitoring management in such a manner as to ensure that appropriate policies and processes are in place, that they are operating effectively and that the Bank is meeting its responsibilities to all stakeholders.
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 involving operational planning, decisions and implementation, the Board provides strategic oversight, tactical input and monitoring of implementation and results.
Management is responsible for the day-to-day operations of the Bank. The role of the Board is to ensure that management is working in the best interests of the Bank and its stakeholders by working to enhance corporate economic value.
The duties of the full Board include:
he directors will be provided with appropriate and timely information in advance of each Board meeting so that they can maintain full and effective control over strategic, financial, operational, compliance and governance issues. Any additional information requested by directors will be provided.
The Board’s performance shall be assessed by the Board as a whole.
Term of Bank directorship, 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 by shareholders meeting.
The directors shall not exceed the age limit of 72 years old and Independent directors shall not hold more than three consecutive terms of directorship. It shall take effect after the Annual General Meeting of Shareholders in 2013.
The Independent Directors Committee shall comprise all independent directors of the Bank. The role of the Independent Directors Committee is to oversee the Bank’s overall interest ensuring fair benefits for each shareholder, maintain checks and balances between the Board of Directors and the Management, and protect shareholders’ rights by offering recommendations and views on significant matters beneficial to the Bank, investors and minor shareholders with independence, transparency and freedom from involvement in any interest, in order to assist the Board of Director to perform with greater efficiency and effectiveness. The Independent Directors Committee shall also express opinions or provide notes or queries in the Board of Directors Meeting with independence and freedom from involvement in any interest, provide advice or comment on important matters under the Board of Directors’ authority including major investment projects, credit policy, information technology, credit underwriting and approval, and lending transactions authorized by the Bank and recommend agenda wherein matters are crucial and needed for the Board of Directors’ consideration, and are not added into the Board of Directors Meeting agenda.
The Board shall be assisted in the discharge of its duties by various Board Committees. The purpose of each board committee is to consider, in greater depth than is practicable at Board meetings, matters for which the Board retains responsibility.
The type and composition of Board Committees shall be reviewed by the Board.
A description of the existing Board Committees, each of which operates under terms of reference or charters approved by the Board, is given below?
The minutes of all meetings of Board Committees shall be submitted to the Board for acknowledgement. This provides directors with an opportunity to receive additional information or to comment and express views on issues being addressed at Board Committees level.
The Corporate Governance Committee shall comprise Board members as appointed by the Board of Directors. Its main responsibility is to oversee the Bank’s business practice and the conduct of the Board of Directors, Board committees as established by the Bank, the management, and employees to ensure compliance with the Statement of Corporate Governance Principles and Sustainable Development, laws and regulations, policies of government agencies or institutions supervising commercial banks, as well as the Bank’s policies.
To undertake the above duties and responsibilities, the Corporate Governance Committee shall set and review the Code of Conduct of the Bank, as prescribed under the Statement of Corporate Governance Principles. These include the duties to review policies, principles and guidelines for the good Corporate Governance Practices, to recommend ethics and Code of Best Practices in business undertaking to the Directors, the management and employees, to ensure effective consistency and compatibility with the businesses of the Bank under the Statement of Corporate Governance Principles and Sustainable Development, and to supervise the Bank’s Sustainable Development undertakings. The Corporate Governance Committee shall report to the Board of Directors matters related to Corporate Governance and Sustainable Development of the Bank, give opinions on practicing guideline and recommend amendments as deemed appropriate. It shall also have to review public announcement related to good Corporate Governance of the Bank to stakeholders and general public.
The Audit Committee shall comprise only Independent Directors. The principal responsibilities include reviewing financial statements on a quarterly, semi-annual and annual basis, and overseeing the risk management system, internal control system and internal audit, and compliance with applicable laws, regulations and the Bank’s Code of Conduct.
The Audit Committee can access to any information and invite management, employees, or external parties to attend Audit Committee meetings, as appropriate. The meeting with the external auditor without the presence of management is held at least one meeting a year.
The Human Resources and Remuneration Committee shall comprise non-executive directors. It shall be responsible for recommending to the Board the remuneration of the Board Members including the Chairman (for subsequent approval by meeting of shareholders). The Committee will also formulate the remuneration policy and the terms of employment for the Chief Executive Officer, President and senior management of the Bank.
The Human Resources and Remuneration Committee will recommend the succession of the Chief Executive Officer, President, when considered necessary, and review the succession plan for senior management and key staff, to be submitted to the Board of Directors, and will monitor the implementation of the Bank's human resources vision and strategy including management development program.
The Risk Management Committee consists of Directors and/or Executives of the Bank appointed by the Board of Directors. The Committee shall be responsible for assisting the Board of Directors oversight of overall risk management processes to ensure that the risk level is appropriate. The Committee must also ensure that the KASIKORNBANK FINANCIAL CONGLOMERATE (“the Financial Conglomerate”) has a well developed structure and comprehensive on-going processes for identifying, assessing, managing and monitoring all risks associated with the operations, to be reported to the Board of Directors for acknowledgement.
The Risk Management Committee shall have the duty to formulate the Financial Conglomerate risk management policy for consideration by the Board of Directors in setting the overall risk management, which should cover all possible risks associated with the business, and reports shall be presented regularly to the Board on the following matters:
The Board and senior management of the Bank have placed an emphasis on promoting of an appropriate business culture, recognizing the importance of risk management and the adequacy of the internal control system in every business undertaking. This leads to the formulation of written policies, procedures and operational manuals as means to communicate with employees on a regular basis. Risk appetite and key risk limit shall be set. Control activities shall be set as an integral part of day-to-day operations. Well established budgeting and forecasting procedures shall be in place and reports shall be presented regularly to the Board detailing:
The Board has approved a Code of Conduct that is in line with Core Values, and in compliance with laws and regulations. All employees shall have access to a copy of this Code of Conduct and are expected to observe high standards of integrity and fair dealings in relation to stakeholders. The Code forms part of the Bank’s compliance framework which shall include policies and standards for compliance with rules and regulations.
The Board has approved a policy that imposes restrictions on trading in the securities and stock futures of the Bank and other organizations where access to price sensitive information could constitute insider trading. The policy shall include an agreed upon time frame during which the buying and selling of the Bank’s shares and stock futures is permitted. This includes a report on trading in securities and stock futures by directors and senior management of the Bank, under good corporate governance principles.
Any conflict of interest or potential conflict, or the conduct of related transactions, or being as part of or involved in transactions subject for consideration by the Bank, that a Director may have, shall be declared to the Board by said Director so immediately that conflict is recognized. Directors involved shall not take part in decisions relating to business activities in which they have a personal interest. In general terms, the Directors must act in the Bank’s best interests.
The Board recognizes the importance of all shareholders’ rights and strictly adheres to a policy on treating all shareholders equally and fairly, according to related laws and the Articles of Association of the Bank, which cover basic legal rights. Aside from the basic rights, the Bank places great importance on disclosure with shareholders. To that end, the Bank circulates each year, along with the annual report and information explaining features of the Bank’s performance in the previous year. The Annual General Meeting shall function as an opportunity to communicate with all shareholders, who are encouraged to attend the Annual General Meeting. The Bank also communicates with investors and other stakeholders via the KBank website ( www.kasikornbank.com )