KBZ Bank is committed to the highest standards of corporate governance. As such, increasing transparency and accountability in all aspects of our business and operations has been a strong focus of our ongoing transformation.
In 2020, we were honoured to recognised amongst the top 10 most well-governed and transparent companies in Myanmar (out of 260 companies), ranking 7th for the 2020 Pwint Thit Sa/ Transparency in Myanmar Enterprises (TiME) assessment, with us securing the the second highest score for Corporate Governance disclosure.
With more transparent disclosures, we were recognized as a Rising Star in Corporate Governance (banking sector) Myanmar 2021 by World Business Outlook Awards 2021.
Our Corporate Governance Framework sets out the system of rules, practices and processes by which the Bank is governed.
This framework complies with the instructions, directives, policies and procedures of the Central Bank of Myanmar (“CBM”), the Financial Institution Law (“FI Law”), the Myanmar Companies Law 2017 (“MCL 2017”), KBZ Bank’s policies, and the Basel Committee Guidelines on Corporate Governance Principles for Banks.
Explore our Corporate Governance Framework and Corporate Governance Statement here.
Our Board and Board Committees
Our Board of Directors provides leadership and oversight on senior management, and ensures they adhere to the Bank’s values and risk culture in all circumstances. The Board’s responsibilities include:
- Overseeing the development of the Bank’s business objectives and corporate strategy, including risk management
- Charting the Bank’s corporate strategy, including risk management
- Monitoring and managing the Bank’s performance
- Succession planning and development
- Preventing conflicts of interests and balancing the competing demands on the Bank
- Reviewing the company’s material controls and risk management systems
- Approving the Bank’s policies and overseeing the implementation of key policies, capital adequacy assessment processes, capital and liquidity plans, and internal control systems.
To carry out its duties more effectively, the Board has appointed a number of committees to oversee specific and clearly defined functions. These committees are:
- Board Credit Committee (“BCC”)
- Board Audit and Risk Committee (“BARC”)
- Board Nomination and Remuneration Committee (“BNRC”)
More information about our Board and Board Committees, as well as our Board Policies, can be found in our Corporate Governance Statement.
Committees and Responsibilities
The responsibilities of the Board subcommittees are as follows:
Board Credit Committee
The Board Credit Committee (BCC) reviews and monitors the credit guidance and credit portfolio, and conducts a more intensive and comprehensive credit analysis when necessary. The Committee also makes recommendations to the Board on credit risk appetite. The BCC is chaired by an Independent Director and includes two other Independent Directors.
Board Audit and Risk Committee
The Board Audit and Risk Committee (BARC) reviews management recommendations on financial and operational risks. The Committee also reviews and evaluates reports from management and effectiveness of the Bank’s internal control and internal audit process. The Committee is chaired by an Independent Director and include other two members of Independent Directors.
Board Nomination and Remuneration Committee
The Board Nomination and Remuneration Committee (“BNRC”) assists the Board to identify and screen specific candidates for nomination and to ensure an appropriate structure of succession and development plan in place, and to review, monitor and determine in respect of the remunerations based on the strategic aims of the Bank. The BNRC is chaired by a non-executive director and include one member currently.
Board Meetings & Appointments
The Board meets at least 12 times a year to discuss strategy, operational and governance matters, review the performance of the Bank’s management, and provide guidance on the company’s overall direction. Notice of Board meetings together with the agenda and any supporting material on the issues to be discussed are provided to each member of the Board prior to the meeting date. The quorum for Board meetings is three members, including the Chair. The Board secretary records and maintains detailed minutes, which are signed by all the Directors who attended the meeting as well as the Board secretary. All matters considered and Board decisions, including any differing opinions expressed by any Director, are recorded in the minutes. A draft of the minutes is circulated to all Directors for comments, which are incorporated and approved at the following Board meeting.
Notices and minutes of our annual general meetings (AGMs) and Directors’ Annual Reports are posted on our website.
2020 – 2021 BOD Meeting Schedule
The Board meetings for 2020-2021 are set out in the table below:
|No.||Board of Director and Member of Board Committees||Type||Supervisory Board Meeting||Supervisory Board Meeting||Supervisory Board Committees||Supervisory Board Committees||Supervisory Board Committees||Comment|
|No. of Board Meetings||% of attendance||No.of meetings related to Board Credit Matters||No.of meetings related to Board Audit and Risk||No.of meetings related to Nomination & Remuneration|
|1||U Mya Than||Independent Chairman||12||100%||9 of 9||14 of 14||2 of 2|
|2||U Maung Maung||Independent Vice-Chairman||12||100%||9 of 9||14 of 14||N/A|
|3||U San Thein||Independent Director||12||100%||9 of 9||14 of 14||N/A|
|4||Daw Nan Than Htwe||Non-Executive Director||12||0%||N/A||N/A||2 of 2|
|5||U Aung Kyaw Myo||Executive Vice-Chair||12||41.7%||N/A||N/A||N/A|
|6||Daw Nang Lang Kham||Director||12||41.7%||9 of 9||N/A||N/A|
|7||U Kyaw Min Htun||Independent Director||12||16.7%||N/A||N/A||N/A|
The Chairperson is appointed by a majority vote of the Board, while the Board, by a majority vote, approves the appointment of new directors, subject to the prior approval of the CBM. Appointments to the Board are staggered to ensure a continuity of the duties and functions of the Board, and are ratified at the Annual General Meeting of shareholders. The Board is also responsible for appointing the CEO, and may select other key personnel, including senior management.
The selection of Board members, the CEO and senior management are based on personal characteristics and qualifications, and to preserve diversity and a mix of skills. The first is guided by the “Fit and Proper” criteria prescribed by the CBM: honesty, integrity and reputation; competence and capability; and financial soundness. However, limited financial means will not alone disqualify a person if they meet the other criteria. In appointing Board members, KBZ Bank also strives to ensure an effective composition, size and commitment level that optimises the Board’s ability to discharge its responsibilities and duties.
Guiding principles include that the Chairperson be an independent director, that the roles of Chairperson and CEO are performed by separate individuals, and that the majority of the board is independent. Furthermore, the composition of the Board should be diverse and represent a range of core competencies commensurate with the size, complexity and risk profile of the Bank to facilitate effective oversight.
The Board reviews and evaluates its performance annually against all key areas of responsibility, and specifically areas where the Board and/or management contribution may be improved. Parameters for Board evaluation include:
- How the Board works as a unit, and the tone set by the Chairman and CEO
- Board efficiency and effectiveness including individual director performance; the clarity of purpose, direction and values of the organisation; the quality of leadership; and key Board relationships
- Risk management and governance
- Strategic review and resource allocation
- People issues and succession planning
- Ethics management
- Business performance, including the level and quality of reporting measures
The chairman typically leads the evaluation of the Board while the Directors jointly review the performance of the Chairman annually. The Board as a whole also reviews the performance of the CEO at least once a year.
More information on the parameters the bank takes into consideration during Board assessments can be found here.
Orientation of New Directors and Succession Planning
To maintain a current and effective Board, we ensure that new Board members are equipped with the information that will allow them to execute their duties in the best possible way. Our orientation process includes familiarisation with the role of the Board of Directors and its committees and charters, as well as all relevant policies adopted by the Board, the Bank’s business activities, and the industry and regulatory environment in which we operate.
Comprehensive updates, including on economic, regulatory, industry and business developments, ensure that our Board is constantly up-to-date and equipped to lead the Bank effectively. A combination of executive coaching and classroom training is deployed to address any further leadership and developmental needs.
Eight of our management team members joined a 3-week Director Certification Program in January 2022. The training was provided by the Myanmar Institute of Directors, co-designed with Singapore Management University. The program was set within an Asian business context and provides a well-rounded board-level view of key strategies and focal issues facing many companies in Myanmar.
The Board of Directors need to be comprised of the right people to reflect the strategic priorities of the shareholders. As the Bank’s long-term succession planning develops, it is important to ensure that the Board composition is in alignment. The key considerations shall be included as follows:
We also have best practices in place for planning for senior appointments, including developing future-focused profiles for critical roles and the skills and competencies required. We create opportunities for our employees to rotate into different roles, and ensure our best people are ready to embrace bigger roles, allowing us all to play to and maximise our collective strengths. Our VCGMs, for instance, are trained with a view that they may, one day, become part of KBZ Bank’s management. Similarly, some of our current Managing Directors began their careers as branch executives. Potential successors are identified and rigorously assessed, with timelines and transitions taken into consideration.