About Us / Governance / Corporate Governance
The Board of Directors view Corporate Governance as important to sound banking and the achievement of sustainable growth. In the overall oversight of the Bank, the Board of Directors is responsible for the overall governance, management and strategic direction of the Bank.
A full Corporate Governance Statement may be obtained from our latest Annual Report.
Below is a brief disclosure of our Corporate Governance framework:
1. Structure & Operations
1.1. Composition
The Board of Director (“Board”) of uab bank is made up of 5 members with majority of the members holding non-executive position.
Members of the Board of Directors are:
- Nay Aye (Non-Executive Chairman & Independent Director)
- Thant Zin (Non-Executive Director)
- Tint Thwin (Independent Non-Executive Director)
- Win Htein Min (Independent Non-Executive Director)
- Christopher Loh (MD/CEO)
The Chairman of the Board holds a non-executive position whereas the CEO is an executive officer. The running of the Board is the responsibility of the Chairman whilst the running of the Bank’s business is the executive responsibility of the Chief Executive Officer.
1.2. Chairman of the Board
The Chairman of the Board is elected by the members of the Board of Directors and he ensures leadership to the Board of Directors. Board meetings will be presided by the Chairman and in his absence, the meeting may be presided by a Director elected by the members present. Minutes of Board meetings presided by the Chairman (or Director, in his absence), will be evidence of the proceedings of meetings or passing of resolutions. (Section 157, Myanmar Companies Law, 2017).
The essential roles and responsibilities of the Chairman are:
- providing leadership to the Board
- taking responsibility for the Board’s composition and development
- ensuring proper information for the Board
- planning and conducting Board meetings effectively
- getting all directors involved in the Board’s work
- ensuring the Board focuses on its key tasks
- engaging the Board in assessing and improving its performance
- overseeing the induction and development of directors
- supporting the Chief Executive Officer & MD
1.3. Definition and role of Independent Non-Executive Director
Independent Non-Executive Director means a director, not having any material relationship with the Bank, either directly or as a shareholder or an officer of an organization that has a relationship with the Bank.
Independent Directors bring their independent judgment, diverse knowledge and experience in deliberations on issues pertaining to the oversight of the Bank. The role includes ensuring adequate corporate governance and the management of risk.
Responsibilities of Directors are stated in 2.1 below.
1.4. Limit on other directorship positions
Directors may serve up to total of 5 Boards in publicly listed companies.
None of the directors currently exceed the limit.
1.5. Onboarding directors
The Board seeks directors whose complementary knowledge, experience, and skills provide a broad range of perspectives. The selection of directors depends upon the requirement of the Board and Committees assisting the Board.
The candidate must meet the following requirements as per Directive No. (8/2019) issued by Central Bank of Myanmar:
a. Education and Training
- Must be a graduate or undergraduate with major in accounting, economics or business administration or should hold a professional certification and training in accounting and banking or
- Has hands on experience in banking operations and procedures, auditing, risk management, compliance management, credit and lending experience, banking or accounting
b. Experience
- Has at least 7 to 10 years of experience in financial services industry
c. Knowledge, skills and abilities
- Knowledge of banking operations and procedures, auditing, risk management, compliance management, credit and lending experience and banking or accounting
- Understanding of applicable laws including Financial Institutions Law, regulations, directives, instructions and guidelines issued by Central Bank of Myanmar.
In addition, the candidate must meet “Fit & Proper” as laid down in Section 76 of Financial Institutions Law, 2016.
1.6. Board Assessment
The Board undertakes a formal annual evaluation of its own performance and that of its Committees and individual directors. The Board Nomination and Remuneration Committee assists the Board in setting up the process and criteria for evaluation of the performance of the Board, its Committees and directors.
The performance and the assessment of the Board is measured by the following 4 (four) dimensions:
1.6.1. Quality of the monitoring and risk-management role
- Compliance
- Law and Regulations
- Corporate Governance
- Whistle blower approach
- Related Party Transaction
- Conflicts
1.6.2. Quality of strategic and other business-related advice
- Innovation
- Growth
- Value Creation
- Connections
1.6.3. Board dynamics and board members’ pro-active participation
- Committed
- Engaged
- Prepared
- Committee requirements
1.6.4. Board composition and diversity
- Gender
- Expertise
- Skills
- Knowledge
- Integrity
- Independent
1.7. Succession Planning
Succession planning is considered at least annually by Board Nomination and Remuneration Committee (BNRC). The BNRC assists the Board in reviewing the succession plan for the Directors, Chief Executive Officer and Key Management Personnel.
Management Committee is responsible for maintaining a succession plan at the mid-level management. Management employs 5 steps to create a succession plan. The five steps are:
- Identifying the future needs
- Identifying the key positions and competencies of internal employees
- Identifying and selecting internal candidates who have demonstrated high potential
- Running training and development activities for the individuals
- Monitoring and evaluating the progress.
Succession planning is considered at least annually at the Bank’s staff appraisal sessions.
1.8. Performance assessment
The Board makes an annual assessment of the CEO at the close of each financial year. Criteria include among other things, the financial performance, governance and risk management of the Bank.
The performance assessment of employees is carried out by the senior leadership on their respective teams and individual staff members on a bi-annual basis. Performance assessment is part of the performance management, which allows the culture of high performance to exist throughout the organization, ensures employees remain motivated, and are empowered to perform to their greatest potential.
Performance management includes planning performance, regular monitoring and reviewing and formal appraisal. Performance appraisal incorporates behavioural measures in addition to achievement of planned KPIs. Post appraisal process includes feedback, coaching and steps are initiated to manage the differing level of performance.
1.9. Board Access to Management
Board members have complete access to management.
1.10. Code of Ethics
uab bank has instituted Code of Ethics and staffs, interns, members of the Board, consultants and contractors are expected to be familiar with and follow the Code of Ethics.
1.11. On-going Professional Education Program
The directors are encouraged to attend the professional education programs. From time to time, the directors attend various training sessions related to their duties including governance and risk management practices, updates on laws and legislations, anti-money laundering requirements and compliance requirements as well as the Bank’s digital channels. The Bank’s new and existing directors receive training on topics that are relevant to the business of the Bank and which meet the objective of equipping directors with the relevant knowledge and skills to perform their role effectively.
The Board Nomination & Remuneration Committee monitors the on-going professional educational needs of the Directors. Training and education programs are reported in the Bank’s website and social media pages from time-to-time.
1.12. Meetings
All the directors are required to attend the Board and Committee meetings; however, the “Conflict of Interest” Policy of the Bank requires Board members to excuse themselves from the meeting, where their presence would create a conflict of interest. The attendance by each director in the Board as well as Committee meetings is set out in the Annual Report for the year.
For Financial Year ending 31st March 2022, five (5) meetings of the Board of Directors were held over a period of 6 months from 1st October 2021 to 31st March 2022. The attendance of Directors for Board and Committee meetings is stated as below :
| No | Name | Role | Board of Directors |
Board Audit Committee | Board Risk Committee | Board Credit Committee | Board Nomination & Remuneration Committee |
|---|---|---|---|---|---|---|---|
| 1 | U Nay Aye | Non-Executive Chairman and Independent Director | 4/5 | 2/2 | - | - | 1/1 |
| 2 | U Than Win Swe | Non-Executive Director | 5/5 | 2/2 | 2/2 | 7/7 | 1/1 |
| 3 | U Thant Zin | Non-Executive Director | 5/5 | - | 2/2 | 7/7 | - |
| 4 | U Thint Thwin | Independent Non-Executive Director | 4/5 | 2/2 | 1/2 | 5/7 | 1/1 |
| 5 | Mr. Christopher Loh | MD and CEO |
5/5 | - | 2/2 | - | - |
* U Nay Aye joined the Board in November 2021 and attend 4 Board meetings.
* U Tint Thwin joined the Board in December 2021 attended 4 Board meetings.
* U Than Win Swe resigned from the Board in July 2022.
* U Win Htein Min joined the Board in May 2022.
2. Responsibilities
2.1. Responsibilities of the Board
The Board of Directors (“Board”) is responsible for the overall governance, management and strategic direction of the Bank. It has ultimate responsibility for the Bank’s business strategy and financial soundness, key personnel decisions, organizational structure, governance framework and practices, risk management and compliance obligations.
The key responsibilities and the types of decisions made by the Board are:
- keeping up with material changes in the bank’s business and external environment as well as acting on necessary changes in a timely manner to protect the long-term interests of the bank;
- overseeing the development of and approving the bank’s business objectives and strategies and monitoring their implementation;
- playing a lead role in establishing the bank’s corporate culture and values;
- overseeing implementation of the bank’s governance framework and periodically reviewing that it remains appropriate in the light of material changes to the bank’s size, complexity, geographical footprint, business strategy, markets and regulatory requirements;
- establishing, along with bank’s officers, the bank’s risk appetite, taking into account the competitive and regulatory landscape in the banking industry and the bank’s long-term interests, risk exposure and ability to manage risk effectively;
- overseeing the bank’s adherence to its risk policy and risk limits;
- approving the policy and overseeing the implementation of key policies and rules pertaining to the bank’s capital adequacy assessment process, capital and liquidity plans, compliance policies and obligations, and the internal control system;
- periodically reviewing key policies and rules to ensure their continued applicability and changing or updating where necessary;
- requiring the bank to maintain a robust finance function responsible for accounting and financial data;
- approving the annual financial statements and requiring an annual independent audit;
- approving the selection and performance of the CEO and other Officers;
- overseeing the bank’s policies on salaries and benefits, including monitoring and reviewing executive compensation and assessing whether it is aligned with the bank’s risk culture and risk appetite;
- overseeing the integrity, independence and effectiveness of the bank’s policies and procedures for reporting fraud and other illegal activities;
- overseeing the development of, and approve the bank’s policy on transactions with related parties; and
overseeing the compliance of the bank with the Financial Institutions Law, regulations and directives issued there under.
Types of decisions that require specific Board of Director approval.
In addition to above responsibilities, the following is the non-exhaustive list which specifically requires approval of Board of Directors:
- Formulation and implementation of strategy and direction of the Bank
- Policies and Framework of the Bank
- Delegation of Authority
- Approval of Related Party Transactions
- Appointment of Senior Management
- Approval of Business Plan and capital expenditure budget
3. Committees
The Board as a whole is responsible for the overall governance, management and strategic direction of the Bank and is assisted in its oversight function by Board Committees.
The Board has four standing committees: Risk Committee, Credit Committee, Audit Committee and Nomination and Remuneration Committee. The above-mentioned committees generally report to the Board at the next scheduled Board meeting following a committee meeting.
Due the present size of the Bank, the Board decided to set up a combined Nomination and Remuneration Committee which oversees the combined nomination and remuneration functions. The Committee is chaired by an Independent Non-Executive Director. It is made up of entirely of non-executive directors with a majority of independent members.
Board Credit Committee
(BCC)
Thant Zin
Chair of BCC
Non-Executive Director
Members:
- Thant Zin (Non-Executive Director)
- Tint Thwin (Independent Non-Executive Director)
Committee is entirely made up of Non-Executive Directors
Board Risk Committee
(BRC)
Win Htein Min
Chair of BRC
Independent Non-Executive Director
Members:
- Win Htein Min (Independent Non-Executive Director)
- Tint Thwin (Independent Non-Executive Director)
- Thant Zin (Non-Executive Director)
Committee is entirely made up of Non-Executive Directors
Board Audit Committee (BAC)
Nay Aye
Chair of BAC
Independent Non-Executive Director
Members:
- Nay Aye (Independent Non- Executive Director)
- Tint Thwin (Independent Non-Executive Director)
- Win Htein Min (Independent Non-Executive Director)
Committee is entirely made up of Non-Executive Directors with a majority of Independent Directors
Board Nomination & Remuneration Committee (BNRC)
Tint Thwin
Chair of BNRC
Independent Non-Executive Director
Members:
- Tint Thwin (Independent Non-Executive Director)
- Nay Aye (Independent Non-Executive Director)
- Win Htein Min (Independent Non-Executive Director)
Committee is entirely made up of Non-Executive Directors with a majority of Independent Directors
4. Direct and indirect ownership in the Bank by Directors and Management
Shareholders of the Bank are :
| No | Name of Shareholder | % of Shareholding |
|---|---|---|
| 1 | Capital Link Investment Company Ltd (1) | 40% |
| 2 | Future Growth Investment Company Ltd (2) | 60% |
- The Directors have neither any direct or indirect shareholding in the Bank.
- There are no direct or indirect shareholding by members of Management of the Bank.
5. Other Matters
5.1. Statutory Auditor
To avoid possible conflict of interest, statutory auditors are not consulted or appointed to provide ancillary services. Statutory auditors are rotated as per Section 88(b) of Financial Institutions Law, 2016 and Directive 10/2019 of the Central Bank of Myanmar. Further, our financial statements disclose the audit fees separate from the reimbursement of expenses, if any.
5.2. Audit Committee
The members of the Audit Committee are appointed in accordance with Section 85(b) of Financial Institutions Law, 2016. All the members of the Audit Committee are Non-Executive Directors with the majority made up of Independent Directors.
U Nay Aye, the Senior Independent Non-Executive Director with his strong accounting and regulatory experience currently chairs the Audit Committee.
5.3. Remuneration & Compensation
5.3.1. The Bank’s total compensation comprises two main components:
- Fixed pay which includes base salary and fixed allowances.
- Variable pay which rewards employees based on the performance of the Bank, business functions and an employee’s individual performance.
5.3.2. We take a holistic view of various factors to determine and to ensure that an employee’s total compensatio is fair. This is done with the objectives to reward contributions, motivate and retain talents.
5.3.2. We take a holistic view of various factors to determine and to ensure that an employee’s total compensatio is fair. This is done with the objectives to reward contributions, motivate and retain talents.
5.3.3. Compensations are structured so as to attract and retain talent, which is vital for the long-term success of the Bank.
5.3.4. The Board of Directors and Senior Management conducts regular reviews of the remuneration policy and practices of the Bank to ensure that compensation practices and programs are consistent with regulatory requirements and are responsive to market developments. Remunerations, rewards and compensation are viewed beyond short term financial measures and looks at the longer-term sustainability objectives.
5.3.4. The Board of Directors and Senior Management conducts regular reviews of the remuneration policy and practices of the Bank to ensure that compensation practices and programs are consistent with regulatory requirements and are responsive to market developments. Remunerations, rewards and compensation are viewed beyond short term financial measures and looks at the longer-term sustainability objectives.
5.3.5. Remuneration to the Board of Directors and Senior Management are generally disclosed in the Notes of Accounts of our Annual Audited Accounts. For period ending 31st March 2022, this can be found on Note 7.1 of the Annual Audited Accounts.
5.3.5. Remuneration to the Board of Directors and Senior Management are generally disclosed in the Notes of Accounts of our Annual Audited Accounts. For period ending 31st March 2022, this can be found on Note 7.1 of the Annual Audited Accounts.
5.4. ASEAN Corporate Governance Score Card
To improve on our Corporate Governance standards and transparency, a gap analysis with the ASEAN Corporate Governance Score Card had been undertaken and this is provided in the link below: