Board Subcommittee Reports

Human Resources and Remuneration Committee Report

Role of Committee

Terms of Reference of the Committee

The main responsibilities of the Committee, which are mainly based on the Banking Act Direction No. 11 of 2007 on Corporate Governance for Licensed Commercial Banks in Sri Lanka issued by the Central Bank of Sri Lanka and incorporated into the Committee Charter, are as follows:

• Determining the Remuneration Policy (salaries, allowances and other financial payments) relating to Key Management Personnel (KMP) of the Bank.
• Setting goals and targets for the General Manager (GM) and KMP.
• Evaluating the performance of the GM and KMP against the set targets and goals periodically and determining the basis for revising remuneration, benefits and other payments of performance based incentives.
• Reviewing staff in matters referred to it by the Board.
• Determining the Human Resource Policy and Organisation Structure of the Bank.

Principal Focus

This Committee focuses on assisting the Board in the Human Resource matters primarily on the evaluation of the KMP.

Medium of Reporting

The proceedings of the Committee meetings are tabled and ratified at Board meetings and approval of the Board is thus obtained for implementation of the recommendations made by the Committee.

Areas of Focus and Activities in 2022

Remuneration of Directors

According to the aforesaid Banking Act Direction No. 11 of 2007, this Committee has to determine the Remuneration Policy relating to the Chairman and Directors. However, in the case of Bank of Ceylon, the remuneration of Directors is determined in accordance with the circulars and instructions issued by the Government of Sri Lanka, the sole shareholder of the Bank. The provisions in the Bank of Ceylon Ordinance No. 53 of 1938 and its amendments, are also taken into consideration in this regard. The Bank has a Remuneration Policy in place, prepared based on the above, which is reviewed as and when new regulations are issued by the Government or periodically. This was reviewed in 2022. The details of the remuneration given to Directors, are disclosed in the Annual Report on a yearly basis.

Remuneration of KMP

The remuneration of employees is revised once in three years, with the approval of the Ministry, whose purview the Bank comes under as per the provisions of the Bank of Ceylon Ordinance.

No salary revision was done in 2022 and accordingly the Committee did not deliberate on remuneration of KMP
in 2022.

Goals and Targets

The Committee reviewed and recommended the Key Performance Indicators (KPI) of the members of the Corporate Management and the General Manager for the year 2022.

Performance Evaluation

The Committee evaluated the performance appraisals made of the Key Management Personnel (KMP) including the General Manager (other than the Deputy General Manager (Compliance), Chief Risk Officer and Chief Internal Auditor whose evaluations were placed before the respective subcommittees) for the year ended 2022 based on the targets set at the commencement of the year in line with the Corporate Plan.

Development of Employees

Followed up on the action plan to develop the employees with required skills, knowledge and attitudes.

Organisation Structure

Considered and recommended a new organisation structure for the Bank as part of the gradual move towards an ideal structure.

Policies/Charters Reviewed

Recommended adoption of the following Policies/Charter:

• Reviewed Human Resource and Remuneration Committee Charter.
• Revised Disciplinary Code of the Bank.
• Revised Code of Ethics of the Bank.
• Revised policy on awarding marks for commendations and deduction of marks for adverse comments/punishments for promotion to the grade of Deputy General Manager and Assistant General Manager.
• Revised policy on maternity leave taken by trainee/probationer during the training/probationary period.

Way Forward

The members of the Committee collectively evaluated the performance of the Committee and submitted to the Board.

The Committee will continue to encourage the use of best practices in Human Resource in the Bank to promote the long-term success of the Bank.

On behalf of the Human Resources and Remuneration Committee.

A C Manilka Fernando
Chairman,
Human Resources and Remuneration Committee

24 February 2023