Report of the Nomination and Governance Committee

Composition

The Nomination and Governance Committee of the Board of Directors presently consists of three Non-Executive Directors. P M B Fernando an Independent Director is the Chairman with J Durairatnam, and Ms V J Senaratne serving as members.

The Chief Executive Officer attends the meeting by invitation, while the Secretary to the Board functions as the Secretary of the Committee.

The Committee’s composition met the requirements of Rule 3.6 (iv) (f) of the Banking Act Direction No. 11 of 2007 of the Central Bank.

Mandate

During the year under review, the Committee carried out the tasks as set out in the Terms of Reference approved by the Board. The Terms of Reference approved by the Board encompasses the tasks set out in Section 3 (6) (iv) of Direction No. 11 of 2007 of the Central Bank of Sri Lanka on corporate governance in licensed commercial banks.

In terms of the mandate the role of the Committee is to review governance policies and procedures, evaluate the performance of the Board and identify, and evaluate persons with the required skills, knowledge, standing, fitness, and propriety to join the Board of the Bank and to evaluate the suitability of Directors who are seeking re-election. The Committee is also responsible for the task of implementing a procedure for the appointment of the CEO and Key Management Personnel.

Procedure

The Committee meets when required and acts within its mandate approved by the Board of Directors and makes recommendations to the Board for consideration.

Meetings

Five meetings were held during the year. The Committee considered and recommended to the Board the appointment of two new Directors. The Committee also identified persons to fill other key management positions after reviewing many candidates from time to time to ascertain the best fit for the Bank in terms of qualifications, ability and character, reviewed succession planning and assessed the fitness and propriety of Directors, and Key Management Personnel, in terms of the requirements of the Banking Act. The Committee which was formed to improve the process for succession planning for KMPs comprising a member of the Audit Committee, CEO, and Head of HR met and reviewed the progress.

During the year, Committee reviewed the job descriptions (JD’s) of Key Management Personnel and incorporated necessary changes to the JD’s of the respective KMP’s. As per the previous practice adopted, a declaration was obtained based on the format adopted by the Committee from Non-Executive Directors, confirming their status of independence. In addition to the annual evaluation of the Board carried out by the individual members, this year too an evaluation of the Board was carried out by the Nomination and Governance Committee members based on a separate check list approved by the Committee and the results were shared with the other members of the Board.

Individual Committee members do not participate in discussions in matters relating to them. The attendance by Directors at meetings is given on page 128 of the Annual Report. The Committee has recommended the re-election of the Directors offering themselves for re-election at the Annual General Meeting.

P M B Fernando
Chairman – Nomination and Governance Committee
17 February 2022