Board Subcommittee Reports

Nomination and Corporate Governance Committee Report

Role of Committee

Nomination and Corporate Governance Committee Charter

The Terms of Reference of the Nomination and Corporate Governance Committee are governed by the Committee Charter, approved and adopted by the Board.

The Committee also ensures that the scope and coverage of its functions addresses the requirements of the Banking Act Direction No. 11 of 2007 on “Corporate Governance for Licensed Commercial Banks in Sri Lanka” and its subsequent amendments issued by the Central Bank of Sri Lanka and that of the Code of Best Practice on Corporate Governance issued by the Institute of Chartered Accountants of Sri Lanka.

Principal Focus

The Nomination and Corporate Governance Committee assists the Board in ensuring compliance with Corporate Governance principles as required by regulations or otherwise in addition to assisting the Board with regard to the appointment of the Chief Executive Officer/General Manager and the Key Management Personnel (KMP).

Medium of Reporting

The proceedings of the Nomination and Corporate Governance Committee meetings are tabled and ratified at the Board meetings and Board approval obtained thereof.

Areas of Focus and Activities in 2022

Policy on Appointment of Directors

As provided in the Bank of Ceylon Ordinance No. 53 of 1938 and its amendments the Bank being fully State owned, the Minister under whose purview the Bank falls appoints Directors to the Board of Bank of Ceylon. This Committee accordingly has no direct role in connection with the appointment of Directors. However, an internal Policy on Appointment of Directors to the Board is in place in the Bank based on a recommendation of this Committee specifying the criteria required for appointment as a Director of the Bank, which is shared with the appointing authority to assist in identifying the skill set needed for a Director of
the Bank.

• Reviewed the Policy on Appointment of Directors to the subsidiaries of Bank of Ceylon.

Corporate Governance

Corporate Governance Policy which is in place was reviewed together with the following incorporated therein:

• The Communication Policy.
• The Policy on Directors’ Access to Independent Professional Advice.
• The Charter of the Nomination and Corporate Governance Committee.
• Policy on Appointment of Directors to Board of Bank of Ceylon.
• Board Charter
• Board subcommittee Charters
• Remuneration Policy for the Chairman and Board of Directors
• Code of Business Conduct and Ethics for Directors
• Policy on Conflict of Interest on Directors
• Subsidiaries Management Charter
• Policy on Appointment of Directors to the Boards of Subsidiaries
• Whistle Blowing Policy
• Criteria for selection of General Manager of Bank of Ceylon
• Ensured the compliance with the applicable Corporate Governance regulations.
• Recommended the Board Evaluation Report for the year 2022.

Fitness and Property

• Ensured that the KMP are fit and proper persons to hold their offices when officers were promoted or appointed as KMP.

Succession Arrangements

• Recommended the revised succession Plan which is an integral part of talent development. The talent pipeline for all Key Management roles prepared identifying the emergency cover, medium term (1-3 years) and longer term (3-5 years) were reviewed. The Committee took action to identify the successor to General Manager/CEO.
• Followed up on the succession planning process for the grades
  below KMP using artificial intelligence (AI Tools).
• Reviewed and recommended the Man Power Plan of Bank for year 2022.
• Assessed the training needs with a view to leadership development of KMP.
• Reviewed and recommended the introduction of new designations for KMP and the movement of the KMP as recommended by the Management.
• Introduced criteria for selecting a Senior Deputy General Manager.

Way Forward

The Committee will strive to promote best practices in Corporate Governance in the Bank, focusing in particular on the implementation of the Directions issued by the Regulators.

Conclusion

The Committee reviewed the efficiency of its work through the annual evaluation that was carried out collectively. The Committee will continue to add value to the Board’s responsibilities through the functions of this Committee.

On behalf of the Nomination and Corporate Governance Committee

Major General (Rtd.) G A Chandrasiri VSV

Chairman,
Nomination and Corporate
Governance Committee

24 February 2023