Corporate Governance

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Governance Framework

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. Our Corporate Governance Framework sets out the system of rules, practices and processes by which the Bank is governed. 

This framework complies with the policies and procedures of the Central Bank of Myanmar (“CBM”) under 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:

  • 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

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 Remuneration Executive Committee (BRC)

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 recommends to the Board the amount of credit the Bank should extend and sets limits on potential credit risk. The BCC is chaired by U Mya Than (Independent, Non-executive Director) and includes U Maung Maung (Independent Director) and Daw Nang Lang Kham (Executive Director and Interim Member). At least 12 meetings are held each year. Meeting attendance for the latest FY is disclosed in the chart below.

Board Audit and Risk Committee 

The Audit and Risk Committee reviews management recommendations onfinancial and operational risk. It is chaired by U Mya Than (Independent Chairman) and includes U Maung Maung (Independent Director) and U San Thein (Independent Director). At least one of the independent directors has accounting expertise. At least eight meetings are held a year, and meeting attendance for the last FY is disclosed in the chart below.

Board Remuneration Committee 

Our Remuneration Committee, which comprises entirely of non-executive directors, ensures all remuneration arrangements support the strategic aims of the Bank. It includes U Aung Ko Win (Chairman Emeritus; shareholder), U Mya Than (Independent Director and Chairman of the Board Remuneration Committee) and Daw Nan Than Htwe (Non-executive Director). The committee met twice in FY 2018-2019, and has met once so far in FY 2019-2020. Meeting attendance for the last FY is disclosed in the chart below.

The Chairman Emeritus sits on the RC only as an advisor on remuneration matters, and does not sit on the Board. This is in line with the bank’s constitution, which allows a shareholder to act as an alternate director for an appointed period with the approval of the majority of the other directors.


Board Meetings & Appointments

Board Meetings


The Board meets at least 12 times a year at the head office of KBZ Bank in Yangon 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 of AGMs and/or EGMs are posted on our website.

2018 -2019 BOD Meeting Schedule

The Board meetings for 2018-2019 are set out in the table below:

No.Board of Director and Member of Board CommitteesTypeSupervisory Board MeetingSupervisory Board MeetingNumber of Board Credit Committee (“BCC”)Number of Board Audit and Risk Committee (“BARC”)Number of Board Remuneration Committee (“BAC”)
   Number of Board Meetings% of attendance   
1U Mya ThanIndependent Chairman1687.50%12 of 128 of 82 of 2
2U Maung MaungIndependent Vice-Chairman1681.30%12 of 127 of 8N/A
3U San TheinIndependent Director16100%N/AN/AN/A
4Daw Nan Than HtweNon-Executive Director160%N/AN/A2 of 2
5Daw Nang Lang KhamExecutive Director16100%11 of 12N/AN/A
6U Win MaungNon-Executive Director1681.30%N/A4 of 8N/A

Appointments

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.

There are plans in place for a Nomination Committee to be formed shortly. In the interim, discussions on matters relating to BOD nominations take place regularly within the context of Remuneration Committee meetings.

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. A higher proportion of non-executive directors helps mitigate possible conflicts of interest between the policy making process and day-to-day management of the Bank.

Evaluation

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. It also reviews the structure of the Board, its size, and composition as well as committee structures and coordination. Additional 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. Regular visits to the cities in which we have a presence keep our Board in touch with on-ground developments and concerns. They also stay up-to-speed with best practices in areas like corporate governance. A combination of executive coaching and classroom training is deployed to address any further leadership and developmental needs.

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. All Directors and Senior Executives are also trained by the Thai Institute of Directors in areas such as corporate governance, as well as the technical knowledge required to uphold it.