CORPORATE GOVERNANCE POLICY OF THE SIAM COMMERCIAL BANK PUBLIC COMPANY LIMITED

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               The Siam Commercial Bank PCL (the “Bank” or “SCB”) has a strong framework for effective corporate governance based on this Corporate Governance Policy in addition to the Bank’s Memorandum of Association and Articles of Association, as well as laws, rules and regulations covering commercial banks and companies listed on The Stock Exchange of Thailand.

 

               Beyond this, the Bank’s Board of Directors will adopt as policy any principle of good corporate governance that may have a higher standard than that of the law. This adoption of this Corporate Governance Policy as the Bank’s governance framework has already been approved by the Bank’s Board of Directors.

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1.1   Vision
 

The Bank has set a clear vision to serve as “The Bank of Choice for Our Customers, Shareholders, Employees and Community.” To accomplish this vision, the Bank has established the following guidelines:

For customers : To provide and deliver the quality products and services, at world-class standards.
For shareholders : To provide sustainable and attractive long- term returns.
For employees : To attract, retain and engage the right staff.
For communities : To adhere to high standards of corporate governance and actively engage in activities and projects that benefit local communities and the general public.

1.2 Mission
 

The Bank has clearly set its mission to be the best universal bank in Thailand, with a strong focus on key financial markets and customer segments, maximizing leverage from its group franchise, with a strong commitment to social responsibility.

1.3 Core Values
 
  iSCB
  Innovation
  We embrace innovation to gain competitive advantage.
   
  Social Responsibility
  We care for the welfare of our community and environment.
   
  Customer Focus
  We are passionate about exceeding customers’ expectation.
   
  Building our People
  We recognize that our people are our future and act accordingly.
   
1.4 The Bank’s Code of Conduct
  The Bank’s Board of Directors, executives and employees shall continuously strive to implement and uphold the following principles:
 
a) Customers
  To provide optimal benefits and satisfaction to the Bank’s customers through delivery of quality products and services, fair treatment, and safeguards on the confidentiality of information.
b) Shareholders
  To deliver satisfactory returns to the Bank’s shareholders through sustained, superior operating results as well as effective internal control, auditing systems and risk management.
c) Employees
  To recruit and retain excellent and capable personnel, continually implement employee development programs, and provide job security and career advancement opportunities.
d) Business partners and competitors
  To conduct business with the Bank’s partners and competitors with fairness and confidentiality, in compliance with applicable laws and regulations, not using dishonest or unethical means to gain information about the Bank’s partners and competitors.
e) Creditors and suppliers
  To honor the agreements that the Bank makes with its creditors and suppliers, including guarantee conditions and its obligations towards effective capital and liquidity management to sustain financial strength and solid debt servicing ability, in accordance with the agreed terms and relevant laws and regulations.
f) Social responsibility
  To conduct the Bank’s business with responsibility toward society and with sensitivity regarding issues relevant to the public interest; and to regularly support and participate in activities that are beneficial to communities and society.
g) Environment
  To abide by environmental laws and regulations; implement effective safety- and environmental-management measures to prevent negative impacts on local communities; and promote employees’ awareness of and concern for the environment.
h) Conflict of interest
  To implement measures to control and prevent transactions that might involve conflict of interest or inappropriate transactions with connected parties; and to put in place and follow relevant policies, regulations and approval procedures; and to comply with regulatory requirements regarding approval and disclosure of information on connected transactions.
i) Information disclosure
  To deliver thorough, accurate and timely information to shareholders, investors and the public in compliance with relevant laws and regulations.
j) Corporate governance
  To abide by good corporate governance principles prescribed by regulators of commercial banks and listed companies, and to develop world-class governance systems for stakeholders’ benefit and confidence.
   
1.5 Directors’ Code of Conduct
  Directors will pursue the highest standards of ethical conduct in the interests of shareholders and all other stakeholders under the following principles:
 
a) Honesty, fairness and integrity
 
- Directors shall act honestly and with fairness and integrity in all of their dealings for the Bank.
- Directors will not discriminate on the grounds of any person’s race, religion, gender, marital status or disability.
- Directors will not make promises or commitments that the Bank does not intend, or would be unable, to honor.
- Directors’ conduct will, at all times, be such that their honesty is beyond question.
- Directors shall adhere to the truth, and not mislead directly or indirectly, nor make false statements, nor mislead by omission.
b) Personal transactions
 
- Directors must keep their personal or other business dealings separate from their dealings as directors of the Bank.
- Directors shall not use the name of the Bank to further any personal transaction or other business transaction.
- Directors shall use goods, services and facilities provided to them by the Bank strictly in accordance with the terms on which they are provided.
c) Confidentiality of information
 
- Directors will ensure that confidential information relating to customers, staff and operations is not given either inadvertently or deliberately to third parties without the consent of the Bank.
- No director shall use information obtained by him/her as a director of the Bank for personal financial gain, nor use that information to obtain financial benefit for any other person or business.
d) Disclosure of interest
 
- Directors shall fully disclose active private interests or other business interests promptly and any other matters which may lead to potential or actual conflict of interest in accordance with such policies that the directors may adopt from time to time.
- Directors shall fully disclose all relationships they have with the Bank in accordance with policies on independence that directors may adopt from time to time.
- Directors’ dealings with the Bank will always be at arm's length to avoid the possibility of actual or perceived conflict of interest.
e) Abiding by the law
 
- Directors shall observe and abide by the laws, rules and regulations concerning business operations.
f) Payments, gifts, entertainment and travel
 
- Directors shall not use their status as director to seek personal gain from those doing business or seeking to do business with the Bank.
- Directors shall not accept any personal gain of any material significance if offered.
   
1.6 Employees’ Code of Conduct
 
a) Scope
 
- The SCB Code of Conduct applies to all SCB Group employees, including executives, and staff at all levels of the Siam Commercial Bank PCL and its subsidiaries, affiliates and other business entities over which the Bank has effective control, including its overseas operations.
b) Compliance
 
- All employees must understand and strictly comply with the Code of Conduct, along with the corporate policies, rules, regulations, and orders that supplement the Code, be they in written or non-written form, and whether they exist or arise in the future.
c) Operating with ethics
 
- The Bank is committed to conducting its businesses and activities in accordance with principles of ethics and integrity. Employees are expected to uphold ethical standards; perform their duties with integrity and fairness; think, speak and act within the bound of rightness and honesty; demonstrate behaviors that are socially and morally appropriate; and recognize the importance of ethical behaviors.
d) Protecting SCB's benefit
 
- All employees shall perform their duties with integrity, morality, and responsibility, following guidelines, policies, and regulations given by the Bank. They shall be committed to perform their duties with the utmost ability.
- Protecting SCB's benefit must be from rightful actions, not assisting, supporting, or agreeing with or facilitating the avoidance of compliance with laws and regulations in accordance with corporate governance principles.
e) Information integrity
 
- All SCB information must be true and accurate.
- The Bank relies on every employee to support our commitment to exemplary record-keeping and reporting by promptly and accurately capturing all transactions.
f) Information confidentiality
 
- Employees shall not disclose any non-public information about SCB, unless otherwise required by law or approved by the Bank.
Information confidentiality is an important matter that requires strict employee compliance. Employees are not allowed to disclose any customer information to other parties by any means or through any communication channels, unless otherwise required by competent authorities or court orders.
g) Communications and representation of the Bank
 
- SCB is committed to conducting business in an open and honest manner. All communications, whether internal or external, must be accurate and forthright, and directed through appropriate channels.
- The publication or circulation, either internally or externally, of any oral or written statement that is false, derogatory, malicious, or defamatory of any person or group is strictly prohibited.
h) Insider trading
 
- Employees having access to non-public information (inside information) shall not buy or sell stocks or other securities, disclose or exploit inside information for the benefits of their own or others, either directly or indirectly.
i) Harassment
 
- SCB is committed to providing its employees with a productive and positive work environment, free of any type of harassment. Reports of incidents or behaviors that undermine this commitment will be fully investigated and, if valid, could result in serious disciplinary action.
j) Gambling, alcohol and narcotic drugs
 
- Employees are prohibited from using, possessing, trafficking and smuggling narcotic drugs or controlled substances (except prescription medicine) of any types and by any means.
- Consumption of alcohol while on duty is prohibited, except at social functions or customer entertainment activities under SCB regulations. Excessive alcohol consumption and intoxication shall be avoided.
- All forms of gambling in while employees are on duty or on Bank premises are prohibited.
k) Giving and receiving gifts and hospitality
 
- Employees must not explicitly or implicitly demand or solicit money and/or assets, and/or any other benefits that may affect business decisions made by employees in the name of SCB. Exception applies to receiving of gifts and hospitality on formal occasions or occasions that are considered culturally appropriate or customary business practices.
l) Conflicts of interest
 
- In performing duties, employees shall treat the Bank's interest as a top priority and ensure that they do not have any stakes or conflicts of interest. Potential conflicts of interest that may be direct or indirect shall also be avoided.
m) Anti-corruption and bribery
 
- Employees have a duty to study and understand SCB's Anti-Corruption and Bribery Policy and strictly follow given guidelines.
n) Organization assets
 
- Employees are expected to treat the Bank’s assets with care and protect them from loss, damage, or misuse.
o) Anti-money laundering and combating the financing of terrorism
 
- Employees shall adhere to rules, regulations and laws regarding anti-money laundering and combating the financing of terrorism.
p) External employment or activities
 
- Employees shall not have status as employees of companies outside SCB Financial Group or perform activities which are not related to SCB while they are on duty.
q) Human rights and political activities
 
- SCB adheres to principles of human rights as mutual practice principles with our employees. SCB encourages its employees to seek understanding of and adopt human rights principles as part of job performance. SCB does not support businesses that infringe human rights.
- Employees shall be careful with their political expression at workplace or during work hours or at any other places to avoid the impression that such views are expressed in their capacity as the Bank’s employees.
r) Whistleblower
 
- For transparent compliance with good corporate governance, the channels are provided for whistleblowers to complain or report misconduct, corruption, or non-compliance with rules, regulations, and codes of conduct.
   
  Other details of the Codes of Conduct of the Bank and the Bank’s directors and employees are available at SCB’s website at the heading “Code of Conduct,” within “About SCB” under “Corporate Governance.”

 

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2.1   Board of Directors
 
a) Roles, duties, and responsibilities of the Bank’s Board of Directors
  The Board’s roles, duties and responsibilities shall be in accordance with those specified by laws, the Bank’s Memorandum of Association and Articles of Association, and the resolutions of the shareholders, which include:
 
1. To direct vision, mission, policies, objectives, strategies and financial objectives for the Bank, approve policies and operational directions proposed by management as well as oversee and monitor the management implementation of the vision, mission, policies, objectives, strategies and financial objectives, with the aim of maximizing economic value and shareholders’ wealth by taking into account the interest of all stakeholders.
2. To devise structures and procedures that will ensure compliance with regulatory requirements, the Articles of Association, resolutions of the Board and shareholder meetings, and with ethical standards, in good faith and with care.
3. To devise structures and procedures to ensure that there are appropriate systems of risk management, internal compliance, audit and control.
4. To devise structures and procedures to ensure that the capital fund is strong and adequate for business operations and risks.
5. To monitor and assess management performance in achieving strategies and budgets approved by the Board.
6. To set criteria for, and evaluate, the performance of the chairman of the Executive Committee, the president and CEO, senior executives and the Bank’s advisors at least one time every year.
7. To ensure that there is adequate preparation and bookkeeping for accounting reports and related documents as well as disclosure of appropriate information to shareholders, depositors and the public.
8. To ensure that there is a procedure to submit the management letter from the independent auditor and opinion from management to the Board within four months from the date of account closing.
9. To review on a regular and continuing basis the succession plan for the positions of chairman of the Executive Committee and president and CEO.
10 To observe and ensure compliance with the Directors’ Code of Conduct.
11. To set policies pertaining to good corporate governance, corporate social responsibility, and anti-corruption and bribery.
b) Meetings of the Board
  The Board shall meet no fewer than six times a year and at least once every three months, with dates scheduled in advance for the entire year. Special meetings are convened as necessary.

The chairman of the Board, the chairman of the Executive Committee, and the president and CEO jointly determine agenda items of the meeting based on importance and necessity. Main agenda items for each meeting are clearly set in advance: the Bank’s vision, mission, strategy, and annual business plan and budget, including the review thereof; quarterly, semi-annual and annual financial results and financial statements; significant credit and debt restructuring matters; significant acquisition and disposal of assets according to applicable rules; connected and related-party transactions; key changes in the Bank’s organizational structure and management; risk management;; and reports from Board committees. Directors shall attend every Board meeting, unless there is an overriding necessity. The relevant executives also make presentations at the meeting to provide additional information on matters under consideration.

For each meeting of the Board, the meeting notice, agenda items and relevant documents must be prepared and circulated to the members of the Board at least seven days in advance of the meeting date in order for the directors to have sufficient time to consider the issues, unless there is an overriding necessity or urgent matter. The company secretary records the minutes, and after each meeting, the draft minutes are proposed to all directors for consideration before the minutes are adopted at the next meeting. The meeting minutes and all supporting documents must be completely kept and made available for scrutiny by directors and other concerned parties.

In addition, the Board will have a special outside meeting known as “Board Retreat” at least once a year, for discussion and consultation regarding significant and specific Bank matters, as well as a non-executive directors’ meeting every six months.
c) Composition of the Board
  The number of directors will be in accordance with that prescribed by the shareholders meeting, but may not be less than five directors. In this regard, no fewer than three directors or no less than one-third of the total number of directors (whichever is higher) must be independent directors, while the number of executive directors may not be higher than one-third of the total number of directors.

The Board will select and appoint an independent director as the chairman of the Board.

The terms “independent director” and “executive director” used in this policy shall have the same meanings as those specified in the Bank of Thailand’s Notification No. SorNorSor. 13/2552, Re: Corporate Governance of Financial Institutions, and the Capital Market Supervisory Board’s Notification No. TorJor. 28/2551, Re: Application and Approval on the Offering for Sale of Newly Issued Shares, including any amendment to such Notifications (if any). Moreover, an independent director may not hold shares of the Bank in excess of 0.5% of the total number of voting shares of the Bank, the Bank’s parent company, subsidiary, associate company, major shareholder, or the person having controlling power over the Bank, while the number of shares held by any person related to the independent director must also be included for this calculation purpose. This shareholding restriction of not more than 0.5% is the Bank’s standard and is higher than that set by the Capital Market Supervisory Board, which prohibits an independent director from holding more than 1% of the total voting shares of the company, parent company, subsidiary, associate company, major shareholder, or the person having controlling power over a company which he/she is a director.
d) Term of directors
  One-third of the total number of directors must retire by rotation at every annual ordinary general meeting of shareholders whereby the directors who have held office the longest shall retire. If the number of directors to retire is not a multiple of three, the number of directors closest to one-third shall retire. However, any retiring directors may be re-elected to continue his/her office.

In addition, the tenure of an independent director shall, for good corporate governance purpose, not exceed nine years.
e) Selection and appointment of directors
  The Nomination, Compensation and Corporate Governance Committee has the duty to screen the list of director candidates nominated by shareholders and each of existing directors whose qualifications have been reviewed pursuant to the applicable laws, rules and regulations, and then to propose and give recommendations to the Board based on the list. After the Board approves the proposed list of candidates, the Bank will submit the list to the Bank of Thailand for its approval prior to proposing the list to the Board and/or shareholders for further appointment. As for the position of the chairman of the Board, the Board will select from among the independent directors.
f) Procedures for new directors
  The Bank holds orientation meetings for new members of the Board. In these meetings, briefings on the Bank’s vision, strategies, key business and performance targets, and other material matters are given by the chairman of the Executive Committee, the president and CEO, and/or senior executives. Material documents are also provided to new directors, including the Directors’ Manual, the Memorandum of Association and Articles of Association of the Bank, and the Bank’s latest Annual Report. These documents contain important information, i.e. roles and responsibilities of directors, the Corporate Governance Policy and the Anti-Corruption and Bribery Policy of the Bank, approval authorities, prohibitions under applicable laws, and roles and responsibilities of the Board committees.
g) Position holding in other companies by directors and senior executives
  The Bank lays down a clear policy regarding its director (including the president and CEO)’s position holding in other companies which is in line with best practices determined or recommended by the relevant supervisory bodies. According to the policy, a director shall not hold directorship positions in more than five listed companies and a director and a senior executive of the Bank shall not be chairman, executive director or an authorized signatory director of limited companies of more than three business groups.

Furthermore, the Bank establishes internal policy guidelines for directors’ position holding in other companies, requiring directors to notify the Bank via the Nomination, Compensation and Corporate Governance Committee and the company secretary in advance before assuming any positions in other companies or organizations, so that the Nomination, Compensation and Corporate Governance Committee may review the appointments for appropriateness and compliance with the relevant laws, rules and regulations. In this regard, the company secretary will inform the Board of the position holding of each director. Such position holding in other companies and organizations by directors is also disclosed to shareholders in the Annual Report. With respect to the directorship positions in other companies and/or organizations by the Bank’s senior executives at executive vice president level and above (inclusive of the president and CEO), the Bank’s internal regulation also prescribes that it must be approved by the Nomination, Compensation and Corporate Governance Committee.
   
2.2 Committees Appointed by the Board
  The Board appoints five committees of the Board (“Board committees”) to study and review specific matters , i.e. the Executive Committee, the Audit Committee, the Risk Management Committee, the Nomination, Compensation and Corporate Governance Committee, and the Corporate Social Responsibility Committee, with each having composition, roles and responsibilities as follows:
 
1. Executive Committee
  The Executive Committee comprises a certain number of directors and other person or persons who may be the Bank’s executive(s) or outside individual (s) as the Board may deem appropriate. The chairman of the Executive Committee is appointed from among members of the Executive Committee who are also directors of the Bank, while the president and CEO is an ex officio member of the Executive Committee.

The term of office of members of the Executive Committee who are directors shall be concurrent with their directorship unless the Board determines otherwise. The term of office of members of the Executive Committee who hold management positions at the Bank shall be equal to the period of time that they remain management of the Bank, unless the Board determines otherwise. With respect to members of the Executive Committee who are outside individuals, their term of office shall be determined by the Board.

The crucial duties and responsibilities of the Executive Committee are to ensure that the Bank's operations are in accordance with its strategies, policies and regulations. The Executive Committee is empowered to administer and manage the Bank's business, perform tasks assigned by the Board of Directors with an aim to accomplish the Bank's vision and be in alignment with the Bank's mission, and promote management practices that are in compliance with the Bank's core values. In addition, the Executive Committee shall have authorities, duties, and responsibilities as stated in the Charter of the Executive Committee.
2. Audit Committee
  The Audit Committee must have at least three members appointed from the persons who are directors, comprising one member as chairman of the Audit Committee and at least two other members. All such members of the Audit Committee must be independent directors and qualified to serve as audit committee members pursuant to the rules set forth by the Bank of Thailand, the Securities and Exchange Commission, the Capital Market Supervisory Board and the Stock Exchange of Thailand.

The term of office of members of the Audit Committee shall be concurrent with their directorship and thus shall end at an annual general meeting of shareholder where they retire from directorship. Members of the Audit Committee who retire by rotation may be re-appointed. However, their membership is not automatically renewed.

Roles and responsibilities of the Audit Committee are to review the integrity and adequacy of the Bank’s financial reporting; the efficiency of the Bank’s internal control over the financial reporting processes; the effectiveness of the systems used in monitoring the Bank’s compliance with applicable laws, rules and regulations as well as its corrective actions on non-compliance issues; the Bank’s work procedures and processes governing connected transactions, related-party transactions and conflict-of-interest transactions to ensure compliance with applicable laws or regulations; and the compliance with the Anti-Corruption and Bribery Policy. In addition, the Audit Committee has duties to consider, select, and propose the appointment or discharge of external auditors including their remuneration, and review the performance of the external auditors annually.
3. Risk Management Committee
  The Risk Management Committee must have at least five members who are the Bank’s directors and/or executives. Most members of the Risk Management Committee must possess knowledge, expertise and insight into overall risks. The chairman and members of the Risk Management Committee shall be appointed by the Board.

The Risk Management Committee’s roles and responsibilities are to formulate the risk management policy and guidelines as well as evaluate, monitor and control risk levels of the SCB Financial Group at an appropriate level. The Risk Management Committee shall regularly report to the Audit Committees the issues that must be improved or resolved for proper compliance with established policies and strategies.
4. Nomination, Compensation and Corporate Governance Committee
  The Nomination, Compensation and Corporate Governance Committee must have at least three non-executive directors. Moreover, most members of the Nomination, Compensation and Corporate Governance Committee must be independent directors, while the chairman of the Nomination, Compensation and Corporate Governance Committee shall be appointed by the Board. The chairman of the Board should not be a member or the chairman of the Nomination, Compensation and Corporate Governance Committee.

The term of office of members of the Nomination, Compensation and Corporate Governance Committee shall be concurrent with their directorship and thus shall end at an annual general meeting of shareholders where they retire from directorship. Members of the Nomination, Compensation and Corporate Governance Committee who retire by rotation may be re-appointed.
Major roles and responsibilities of the Nomination, Compensation and Corporate Governance Committee are as follows:
 
Nomination
  To lay down the policy, regulation and procedure for the nomination of directors, members of the Board committees, and the persons with management authority (as defined by the Financial Institutions Business Act, B.E. 2551 (A.D. 2008)) to be approved by the Board as well as to select and nominate persons whose qualifications are suitable and in line with the Bank’s requirements, in view of its business strategy, as directors, members of Board Committees, and persons with management authority for appointment by the Board and/or, as the case may be, for the proposal of such nomination by the Board to the shareholder’s meeting for election. The Nomination, Compensation and Corporate Governance Committee shall also ensure that the Bank has in place a proper succession and management continuity plan for the positions of the chairman of the Executive Committee, the president and CEO, and the persons with management authority and recommend the plan to the Board for approval.
Compensation
  To set out and propose the policy for the payment and amount of compensation and other benefits for directors, members of Board committees, and the persons with management authority (as defined by the Financial Institutions Business Act, B.E. 2551 (A.D. 2008)) to the Board for approval or for proposal thereof to the shareholders’ meeting for approval, as the case may be. Such policy shall be based on clear and transparent criteria in order that such persons are offered appropriate remunerations which are commensurate with their roles and responsibilities. The Nomination, Compensation and Corporate Governance Committee shall also formulate the guidelines for annual performance evaluation of the Bank’s directors and persons with management authority.
Corporate governance
  To formulate the Bank’s policy in respect of corporate governance and propose it to the Board for approval; to monitor compliance with that policy; to review and revise the policy on a regular basis for appropriateness; to monitor the Bank’s performance to be in compliance with the corporate governance principles of the relevant authorities; and to arrange for the annual performance evaluation of the chairman of the Board, each individual director, and the Board as a whole, and Board Committees.
To perform other duties in accordance with the applicable laws, rules, notifications, regulations, or orders prescribed by the relevant authorities.
5. Corporate Social Responsibility Committee
  The Corporate Social Responsibility Committee must have at least five directors while the president and CEO is an ex officio member of the Corporate Social Responsibility Committee.

The term of office of members of the Corporate Social Responsibility Committee shall be concurrent with their directorship and thus shall end at an annual general meeting of shareholders where they retire from directorship. Members of the Corporate Social Responsibility Committee who retire by rotation may be re-appointed.

Key functions of the Corporate Social Responsibility Committee are to develop SCB's corporate social responsibility policy and framework, a working policy and coordinate with the Siam Commercial Bank Foundation, and consider and allocate resources and budget for corporate social responsibility projects and activities run by SCB and the Siam Commercial Bank Foundation.
   
2.3 Segregation of Positions Between the Chairman of the Board, the Chairman of the Executive Committee and the President and CEO
 
  For the Bank’s corporate governance purposes and transparency of internal control, the positions, powers, and duties of the Bank’s chairman of the Board, the chairman of the Executive Committee, and the president and CEO are clearly divided. This practice is consistent with the principle of segregation of roles in corporate governance policy-making and administration duties as per the following details:

Chairman of the Board : The Board selects and appoints one of the Bank’s independent directors as the chairman of the Board; thus, the chairman of the Board is not either the chairman of the Executive Committee or the president and CEO. The key roles of the chairman of the Board are: to ensure that Board meetings are conducted effectively and matters that are essential to the Bank’s operations and/or performance are placed on the meeting agenda, particularly matters related to corporate strategy; to allocate sufficient time for management to present clear information; to ensure the meeting minutes are correct; and to ensure that the Bank’s governance practices are in compliance with adopted policies. The chairman of the Board also presides over the shareholders’ meeting.

Chairman of the Executive Committee : The chairman of the Executive Committee is selected and appointed by the Board from the directors. The chairman of the Executive Committee has power and duty to manage and control the business of the Bank as assigned by the Board, i.e. to develop and review key strategies and practices relating to business of the Bank and undertake responsibilities relating to Board Committee as appointed by the Board, including overseeing the Executive Committee’s compliance with its charter. In addition, the chairman of the Executive Committee is an authorized signatory having the power to singly sign on behalf of the Bank.

President and CEO : The president and CEO shall be appointed by the Board and shall be an ex officio member of the Executive Committee. The president and CEO is also an authorized signatory person having the power to singly sign on behalf of the Bank, similarly to the chairman of the Executive Committee. The powers and duties of the president and CEO are as those prescribed by applicable law and as assigned by the Board as the Board may deem appropriate. These powers and duties include:
 
To implement the Bank’s operations according to policies, strategies and goals as set forth by the Board.
To monitor and prepare reports on business conditions and the Bank’s positions, and recommend alternatives and strategies consistent with the policies of the Bank and the prevailing market conditions.
To consider and screen the Bank’s business operations with approval authority according to the Bank’s regulations, and as assigned by the Board and/or the Board Committees;
To manage and supervise the Bank’s operations in aspects such as finance, risk management, internal control, operational processes and human resources.
To represent the Bank in dealing with government agencies and regulatory bodies with the authority to assign another person to perform such acts.
To oversee communications with the public, shareholders, customers, and employees to ensure that they are positive and enhance the Bank’s reputation and image.
To apply good governance principles across the organization.
   
2.4 Remuneration of Directors and Persons with Management Authority
 
a) Remuneration of directors
  The Nomination, Compensation and Corporate Governance Committee has the duty to recommend and propose to the Board the suitable remuneration of members of the Board and the Board Committees in order for the Board to further propose these to shareholders for their approval on an annual basis. With respect to this, the Board has a policy requiring that remuneration of directors and members of the Board Committees be appropriate, reflect their duties and responsibilities to fulfill stakeholder expectations and comply with applicable laws and regulations.
b) Remuneration of persons with management authority
  It is the responsibility of the Nomination, Compensation and Corporate Governance Committee to propose remuneration of the persons with management authority (as defined by the Financial Institutions Business Act, B.E. 2551 (A.D. 2008)) to the Board for consideration and approval whereby such remuneration shall be appropriate, in line with the Bank’s policy, and commensurate with the corporate and individual performance. Such remuneration shall be based on transparent criteria and the scope of functional duties and responsibilities, including the comparable market benchmark.
c) Other benefits for directors and persons with management authority
  Directors are entitled to welfare and fringe benefits in line with the Bank’s regulations such as benefits in relation to medical treatment as well as travel and accommodation expenses for foreign directors attending meetings in Thailand.

Benefits and welfare of persons with management authority (as defined by the Financial Institutions Business Act, B.E. 2551 (A.D. 2008)) are the same as those of the Bank’s employees, such as medical treatment, life and accident insurance, travel expense reimbursements, various types of welfare loans, and contribution toward provident funds.
   
2.5 Assessment of the Board and Persons with Management Authority
 
a) Assessment of the Board is divided into three parts:
 
assessment of the chairman of the Board.
assessment of each director.
assessment of the Board as a whole and Board Committees.
 
  Board assessment is conducted each year on a regular basis. The company secretary distributes the assessment forms to each member of the Board, then collects the completed forms and proposes them to the chairman of the Nomination, Compensation and Corporate Governance Committee for performance evaluation. Thereafter, the evaluation results will be used for discussion in the meeting of the Board where the recommendations given by directors will be adopted for improvement of the Board’s performance, for the optimal benefit of the Bank in terms of corporate governance.

For effective board assessment, the Bank engages an external consultant with professional expertise and experience in corporate governance field in determining assessment guidelines and topics and in facilitating a board assessment at least every three years.
b) Assessment of persons with management authority
  Similar to the Board assessment, assessment of the chairman of the Executive Committee, the president and CEO and other persons with management authority (as defined by the Financial Institutions Business Act, B.E. (A.D. 2008)) is rendered on an annual basis and is considered the responsibility of the Nomination, Compensation and Corporate Governance Committee. As for assessment of the chairman of the Executive Committee and the president and CEO, the Nomination, Compensation and Corporate Governance Committee has duties to review the targets and performance criteria, to monitor and assess the performance, and to propose assessment results to the Board for endorsement. In regard to performance assessment of persons with management authority, the Bank’s management will set up the key performance indicators based on the goals and strategies for each year, monitor and assess the performance, and propose assessment results to the Nomination, Compensation and Corporate Governance Committee for consideration. The results then will be proposed to the Board for endorsement and referred to in the determination of suitable remunerations and other benefits.
   
2.6 Succession Planning
  The Bank forms succession plans with the objectives of making human resources ready in advance, both in terms of quality and quantity, ensuring continuity of appropriate management, and selecting suitable employees for the Bank’s key jobs, which consist of the top executives of functions or divisions, or the key positions in the Bank’s management structure or business operations, or the positions for which specific expertise is required and replacements are difficult to find. In this regard, the principles of succession planning are as follows:
 
a) Positions for which a succession plan is required:
 
1. A succession plan covers two levels down from the president and CEO.
2. For executive positions at other levels, a succession plan may be prepared for only key positions, depending on the discretion of the top executive of such function.
b) Successor selection criteria:
 
1. A successor must obtain an average performance rating of “above the target (4)” for at least two or three consecutive years. For instance, the average of a successor’s performance ratings in the past three years was “above the target (4)”, or the performance ratings in the past two years were “above the target (4)”.
2. A successor must have the potential and capability to learn new jobs or to be responsible for a higher value or volume of work (as evaluated) than presently handled.
c) Succession plan preparation process.
There are five steps to be taken as follows:
 
1. To define key positions for which succession plans are required.
2. To determine the required skill sets and success factors of each key position which include the required knowledge, ability, skills and attributes.
3. To select and assess the readiness of the successor according to the prescribed standard, and assess his/ her readiness for development, including strengths and weaknesses.
4. To formulate an individual career development plan for each selected executive to prepare his/ her readiness to assume higher position.
5. To continuously monitor the successor’s development and assess his/her readiness after development by comparing the actual achievement with the individual development plan.
d) Nomination and appointment approval
  The authority to nominate and approve the appointment successors to positions within the Bank has been clearly defined according to levels of positions. For positions being key jobs, nominations shall be made by the Nomination, Compensation and Corporate Governance Committee, or any other persons or groups of persons as specifically appointed by the Board, such as the chairman of the Nomination, Compensation and Corporate Governance Committee, members of the Board, the president and CEO, or the top executives of functions. The nominations will be approved by, as applicable, the Board, the Nomination, Compensation and Corporate Governance Committee, the chairman of the Executive Committee, the president and CEO, or the top executives of functions, depending on the levels of the target positions.
   
2.7 Company Secretary
  The Board appoints a qualified officer of the Bank as the company secretary to take responsibilities for matters connected with the meetings of the Board and the shareholders, to ensure the Bank’s compliance with the good corporate governance principles, to provide support to the Board with respect to statutory and supervisory requirements and good corporate governance. The duties of the company secretary also include the following:
 
a) Undertaking arrangements for meetings of shareholders, the Board, and related Board committees such that all the meetings conform to relevant laws and regulations, the Bank’s Articles of Association, the charters of the Board and each Board Committee, and best practices.
b) Preparing and safekeeping the registration of members of the Board, the notice and minutes of the shareholders and Board meetings, and the Bank’s Annual Report.
c) Communicating the Board’s and shareholders’ resolutions and policies to relevant management and following up on their implementation, via the president and CEO.
d) Collecting and safekeeping the conflict-of-interest reports provided by directors or executives and submitting them to the chairman of the Board and the chairman of the Audit Committee within the time prescribed by applicable laws.
e) Providing preliminary advice and recommendations pertaining to legal, regulatory, and governance issues and practices related to the Board and Board committees.
f) Managing the company secretariat office to serve as the center for corporate records, such as the Bank’s juristic person register, Memorandum of Association and Articles of Association, shareholder register, and business licenses.
g) Ensuring that corporate information disclosure and related regulatory filings within the scope of responsibility are in accordance with laws and regulations and the Bank’s disclosure policy.
h) Communicating to general shareholders about their rights and the Bank’s developments.
i) Providing information and data concerning the Bank’s businesses to directors to support them in carrying out their Board duties.
j) Arranging director’s briefings for new directors.
k) Performing other duties as required by applicable laws.

 


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3.1   Treatment of All Groups of Stakeholders
  The Bank is conscious of the rights of its different groups of stakeholders, i.e. shareholders, customers, employees, business partners, competitors, creditors, society at large, communities and the environment. This is evident in the Bank’s vision and codes of conduct stated in Section 1 of this Corporate Governance Policy. It is also the Bank’s policy to provide satisfaction and full rights to each group of stakeholders based on the principle of fairness for sustainable growth among all.

All stakeholders may directly contact the relevant units of the Bank. For example, customers can communicate with the Bank via branch or the officer/relationship manager in charge. Employees who wish to inform the Bank about any improper, wrong, or unjustifiable act may contact the HR Client Services Division, or communicate directly in writing to the deputy head of the Risk Management Function, Human Resources Function, or Audit Function and Compliance Function. Moreover, any complaints, suggestions or comments can also be submitted to the Board and the management of the Bank through the following central channels of the Bank:
 
SCB Call Center at:
 
- Tel: 0-2777 7777
Board Secretariat and Shareholder Services Division at:
 
- Fax number: 0-2937-7931
- E-mail: company_secretary@scb.co.th
- Mail or by hand to the attention of the company secretary at:
The Siam Commercial Bank PCL, Head Office
Board Secretariat and Shareholder Services Division,
9 Rutchadapisek Road, Jatujak Subdistrict, Jatujak District, Bangkok 10900
   
  In this connection, the Bank has formulated a clear policy and practical guideline for handling customer and/or employee complaints where all such information is kept confidential, and the Bank will investigate, find a solution (where applicable), and report further to the Audit Committee and the Board.
   
3.2 Treatment of Shareholders
 
a) General treatment of shareholders
  It is the Bank’s policy to ensure that shareholders enjoy their fundamental rights in buying, selling, or transferring shares; profit sharing; attending and participating in shareholders’ meetings for casting votes in an independent and equitable manner; taking part in material business decisions (e.g., appointment and removal of directors, determination of directors’ remuneration, appointment of the auditor, fixing the audit fee, payment of dividends, formulation of or amendment to provisions of the Memorandum and Articles of Association, capital increase or reduction, and special transaction engagement); and receiving adequate, timely and complete information about the Bank, shareholders’ rights and other useful information via easily accessible channels such as the Bank’s website. With respect to this, the Bank has designated the Board Secretariat and Shareholder Services Division to assist and facilitate the convenience of shareholders in exercising their rights.
b) Treatment of shareholders for shareholders meetings
  The Bank has a strong intention to ensure that its shareholders meetings which can be divided into three phases as specified below are in accordance with all applicable laws, rules and regulations, including of the principle of good corporate governance:

Prior to the meeting day : All shareholders may, during the last three months of the Bank’s fiscal year that precedes each annual general meeting of shareholders, propose agenda items, which are material and of benefit to the Bank, as items to be included in the agenda of the annual general meeting of shareholders; nominate any qualified persons for election as members of the Bank’s Board; and propose questions (if any). The Nomination, Compensation and Corporate Governance Committee will then screen those proposals prior to presenting them to the Board for consideration, and inform the shareholders making the proposals of the result of consideration. Any of such proposals that the Board deems appropriate and reasonable will be incorporated into the agenda of the upcoming annual general meeting of shareholders.

After the Board passes resolutions in respect of the date and agenda items of the annual general meeting of shareholders, the dividend payment, and the book-closing and record dates, the Bank will disseminate this information to shareholders via the disclosure channels of The Stock Exchange of Thailand and also post them on bulletin boards at the Bank’s head office and all branches.

The notice of a meeting of shareholders, containing details of each agenda item, facts and rationales, and opinions or recommendations of the Board, as well as accompanying documents detailing meeting procedures, voting, proxy appointments, and the Annual Report (in the form of a CD-ROM), prepared both in Thai and English, are provided to shareholders via post. In addition, such information is also disseminated through daily newspapers and the Bank’s website at least 14 days in advance of the meeting date, so that shareholders would have sufficient time and information for consideration and effective exercise of their rights on each agenda item. The printed copy of the Bank’s Annual Report is also available from the Bank’s company secretary upon request. Shareholders who are unable to attend the meeting in person may appoint another person or an independent director of the Bank as their proxy holder to attend and vote on their behalf. Information in respect of each of such independent directors, such as biographical and educational background, residential address; position in any other entity that competes with or is related to the Bank’s business, relationship with the Bank and the Bank’s subsidiary, and conflicts of interest in connection with the relevant agenda item, is made available to the shareholders together with the proxy form. The proxy forms distributed to shareholders clearly contains all details of information required by the Business Development Department of the Ministry of Commerce, whereby shareholders may cast their specific votes by using such proxy forms.

On the meeting day : For the convenience of shareholders and proxy holders, the Bank uses the bar code system for its meeting registration service and sets up different counters, which are manned with the Bank’s officers, for each type of shareholders. The Bank allocates to each shareholder and proxy holder the ballots bearing the same bar code as their registration bar code for voting on each agenda item. The meeting registration is open to shareholders both before and during the meeting, allowing shareholders to attend the meeting and vote on any remaining agenda item.

The chairman of the Board presides as the chairman of the meeting and all directors are expected to attend the meeting, unless there is an overriding necessity. As for the agenda on election of directors, voting is conducted on a director-by-director basis.

Prior proceeding in accordance with the meeting agenda, the company secretary informs the meeting of the voting procedure for each agenda item. In order to increase the efficiency and speed of the voting process, the Bank collects only the ballots indicating disapproval and abstention votes. Voting and vote counting for each agenda item are conducted openly by using a bar code and PDA system. The company secretary announces the vote result for each agenda item. The ballots already used for vote counting are retained for future verification. Furthermore, the Bank appoints inspectors to ensure that the meeting and the voting are conducted in a correct and transparent manner.

Multimedia presentations are used at the meeting for shareholder convenience. The chairman of the meeting allows shareholders to ask questions and make recommendations, while the relevant directors and executives respond to such questions and clarify the issues raised. The minutes of the meeting and detailed votes for each agenda item are recorded by the company secretary. To comply with the policy of respecting shareholders’ rights, the Bank will not add any agenda item or revise any material information in the meeting agenda on the meeting date.

Following the meeting day : The Bank submits the minutes of the general meeting of shareholders to the Stock Exchange of Thailand within 14 days from the meeting date and discloses them on the Bank’s website (www.scb.co.th) to allow shareholders to rapidly access the information.
c) Dividend payment
  The Bank’s policy on the payment of the dividends of the Bank and its subsidiaries is as follows:

Dividend payment policy of the Bank : The Bank has a policy to pay dividends at a rate between 30-50% of reported consolidated net profits in any year when the Bank, after deduction of all statutory and other reserves, posts a profit, provided that there is no accumulated loss and the Bank can maintain sufficient statutory capital funds.

Dividend payment policy of subsidiaries : Where the Bank has full control over a subsidiary and where such subsidiary is not a listed company, the dividend payment policy is to pay dividends at the maximum amount from the net profits after appropriation for legal reserve or after considering the business requirements of the subsidiary.

As for a SET-listed subsidiary or a subsidiary over which the Bank does not have full control, the dividend payment policy will be in accordance with the policy announced by such company and consistent with the applicable laws, rules and regulations.
   
3.3 Disclosure of Information and Transparency
  The Bank zealously aims to disclose the Bank’s information to shareholders and the general public in an optimal and timely manner, so that any decision-making for investment in the Bank’s securities can be based on complete and equitable information. In this connection, the following principles are set for disclosure of information:
 
a) Information to be disclosed must be accurate, adequate, and clear as well as disclosed on a timely basis.
b) Disclosure must comply with all applicable rules and regulations.
c) Stakeholders, including shareholders, investors, analysts, and other interested persons must have equal rights of access to information disclosed by the Bank.
d) Information that may affect the price of the Bank’s securities or have material influence on investors’ decisions, or may affect the rights of shareholders must be immediately disclosed to the public through the Stock Exchange of Thailand.
   
  The Bank designates the chairman of the Executive Committee, the president and CEO, the chief financial officer, the manager of Investor Relations Division, and other persons as the Board may assign, to disclose information of the Bank. In light of this, Investor Relations Division is responsible for preparing information relating to the Bank’s financial performance and operating results to be disclosed to the relevant authorities, shareholders, investors, securities analysts, and interested general public. Such disclosure is executed by the Bank via several channels, for instance, reports to the Stock Exchange of Thailand and the Securities and Exchange Commission, the Bank’s website (www.scb.co.th) under “Investor Relations” section, at investor conferences, and during road shows.

The Bank’s general disclosure schedule includes regulatory filings at the end of each accounting period in accordance with applicable laws as well as direct disclosure to investors and securities analysts through quarterly analyst meetings,. However, the Bank abstains from disclosing information related to its operating results to shareholders, investors and securities analysts during a period of seven days prior to the submission of its quarterly operating results to the Stock Exchange of Thailand The Bank may consider participate in conferences arranged by other entities both in Thailand and abroad, including meetings with investors at non-deal road show events if deemed appropriate.

In order to disseminate information to customers and the general public, the Bank also regularly holds press conferences and invites the press to participate in the Bank’s activities to keep them informed of important information about the Bank.

 

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4.1   Internal Control over the Use of Inside Information by Directors and Employees
  The Board formulates guidelines for the disclosure of information and the prevention of conflicts of interest and unauthorized use of inside information. Key guidelines include the following:
 
a) Establishing codes of conduct for directors and employees, covering such matters as the use of inside information and the confidentiality of customer information. The codes of conduct have been disseminated to directors, executives and employees, and strict compliance is expected.
b) Establishing securities trading framework for directors and securities trading regulations for employees to prevent governing the use or disclosure of inside information for personal gain or benefits of others.
c) Imposing non-trading periods on directors, executives and employees involved in financial statement preparations to prohibit them from trading the Bank’s securities during a 14-day period preceding the announcement of quarterly, semi-annual, and annual financial statements as well as to prohibit directors and executives from investing in any securities which have SCB ordinary shares as an underlying asset.
d) Requiring directors and persons with management authority (as defined by the Financial Institutions Business Act, B.E. 2551 (A.D. 2008)) to disclose information on their shareholdings and to report their trading transactions related to the Bank’s shares to the Bank and the Securities and Exchange Commission within three business days from the transaction date. The company secretary is responsible for compiling reports on shareholding changes and including these reports as a regular agenda item for the Board’s information at each Board meeting.
e) Establishing regulations governing the confidentiality and disclosure of customer information including regulations against the use of non-public information in order to prevent leakage of confidential and/or non-public information of the Bank and/or its customers as well as to prevent use of inside information by persons having access to such information for personal gain or benefit of others.
   
4.2 Connected and Conflict-of-Interest Transactions
  The Board recognizes the Bank’s policy and guidelines regarding the approval process and engagement in any connected or conflict-of-interest transactions as follows:
 
a) To strictly follow the regulations and notifications of the Stock Exchange of Thailand, the Securities and Exchange Commission and the Capital Market Supervisory Board governing connected and conflict-of-interest transactions. Directors and executives are prohibited from participating in consideration of any matters in which they might have a beneficial interest, and the company secretary takes notes of their related interests in the minutes of the meeting.
b) To set a policy governing pricing and other conditions for related-party transactions to ensure that such pricing and conditions are on an arm’s length basis.
c) To set forth that the Board (excluding directors having conflicts of interest) has a duty to consider and approve credit facilities or investment relating to businesses which have connected interest with the Bank, its directors, persons with management authority or their related parties (as defined by the Financial Institutions Business Act, B.E. 2551 (A.D. 2008)).
d) To establish regulations on securities trading by employees and regulation on prevention against the use of inside information which provide guidelines and proper practices applicable to securities trading by executives and all employees who, due to their functional duties, have access to inside information that they may use for their personal gain or benefit of others. Such regulations also cover related parties.
   
  The Bank requires the appointment of an independent adviser (if a connected transaction exceeds predetermined thresholds) whose role is to provide an opinion on connected transactions, particularly as such transactions are related to the acquisition or disposal of significant assets of the Bank and its subsidiaries, merger and acquisition transactions, or any other transactions as prescribed by law. The Board has assigned the Audit Committee to review the procedures and oversight of all material transactions to ensure that they are compliant with applicable laws and/or regulations.
   
4.3 Conflict-of-Interest Report
  The Bank requires that directors and persons with management authority (as defined by the Financial Institutions Business Act, B.E. 2551 (A.D. 2008)) to report to the company secretary on a quarterly basis the conflicts of interest arising from themselves and their related parties as well as changes to any existing reported items. The company secretary has a duty to collect and submit such reports the chairman of the Board and the chairman of the Audit Committee in compliance with the Securities and Exchange Act, B.E. 2535 (A.D. 1992). This information is used by the Bank for monitoring transactions between the Bank and directors, persons with management authority, and/or their related parties in accordance with legal requirements.

 

 


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