Board of Directors Charter

1. Vision
  The board of directors (the “Board”) of The Siam Commercial Bank Public Company Limited (the “Bank”) sets the Bank’s vision to be “The Most Admired Bank” for all of its constituents, namely customers, employees, shareholders, the society and regulators.

 

2. Duties and Responsibilities
  The duties and responsibilities of the Board are as those stipulated by laws, the memorandum of association, the articles of association and the resolutions of shareholders’ meeting, including the following activities:
 
(a) to determine the vision, mission, policies, strategies and financial objectives for the Bank; and to consider approving the policies and operational directions proposed by the management; as well as to oversee and monitor the management in implementing the vision, mission, policies, strategies and financial objectives, with the aim of maximizing overall economic value and shareholders’ wealth after taking into account the interests of all relevant stakeholders;
(b) to formulate the structures and determine the procedures in order to ensure that the proceedings will be done in compliance with regulatory requirements, the articles of association, the resolutions of the Board and shareholders’ meetings and ethical standards, in good faith and with due care;
(c) to formulate the structures and determine the procedures in order to reinforce the appropriateness of the risk management system, the audit and compliance, as well as the internal control;
(d) to formulate the structures and determine the procedures in order to ensure that the capital fund remains at the strong level and adequate for business operations and risks;
(e) to monitor and assess the performance of the management in achieving the strategies and within the budgets, as approved by the Board;
(f) to set out criteria for, and to evaluate, the performance of the chairman of the Executive Committee, the President, the senior executives1, and the Bank’s advisors2 at least once a year;
(g) to observe that the books of account and other relevant documents are well prepared and duly kept, and that there are appropriate disclosures of information to shareholders, depositors and public in general;
(h) to observe that there is a procedure for submission of the management letter from external auditor and the opinion from the management to the Board within 4 months from the closing date of the account;
(i) to review the succession plan for the positions of the chairman of the Executive Committee and the President on a regular and continual basis;
(j) to observe and take actions in order to ensure that the directors’ code of conduct has been followed and complied with;
(k) to set the policies pertaining to good corporate governance, corporate social responsibility, and anti-corruption and bribery; and
(l) to review the implementation of Corporate Governance Code (CG Code) in the business context at least annually to ensure the suitability thereof.

 

3. Authority of the Board
  The Board’s power and authority are as those stipulated by laws, the objectives, the articles of association, as well as the resolutions of shareholders’ meeting, including the following powers and authorities:
 
(a) to appoint the Board Committees;
(b) to appoint and determine the remuneration and employment conditions for the positions of the chairman of the Executive Committee and the President;
(c) to appoint and determine the remuneration and employment conditions for the positions of the senior executives1 and the Bank’s advisors2;
(d) to consider granting approval on:
 
(1) vision, mission, policies and strategic plan (to be reviewed on an annual basis);
(2) annual business plan;
(3) annual budget;
(4) quarterly, semi-annual and annual financial statements;
(5) interim dividend payment;
(6) change of organizational structure at group level, and other significant changes in the organization.
(7) acquisition, establishment, disposal or cessation of any significant assets or businesses of the Bank;
(8) entering into any connected transaction, of which the size is material to the Bank and its subsidiary;
(9) issuance of any financial instruments or other securities of the Bank;
(10) statements to be made to the public regarding significant issues on the Bank’s policy or strategy; and
(11) change of any authority previously delegated by the Board to others to perform.
(e) to consider delegating certain authorities of the Board to the Board Committees from time to time.

 

4. Composition
  The number of directors in the Board shall be in accordance with that stipulated by the shareholders’ meeting, but must not be less than 5 directors. In addition, at least 3 directors of the Board or one-third of the total number of the Board (whichever is higher) must be independent directors3, and the number of executive directors4 in the Board must not exceed one-third of the total number of directors.

 

5. Tenure
  One-third of the directors of the Board will be retired at every annual general meeting of the shareholders, whereby the directors who have been in office for the longest period will be retired. If the number of directors to be retired as such is not a multiple of three, the closest number to one-third will be applied. However, any retired director can be re-elected. Moreover, for the purpose of good corporate governance, the tenure of an independent director should not exceed nine years.

 

6. Criteria for Being a Director of the Bank
  In nominating a person as a director of the Bank, the Board will take into account the strategic and business direction of the Bank to ensure that the Board of the Bank possesses the right skills mix essential for the attainment of the Bank’s business goals. The Bank’s directors must have qualifications that meet the requirements stipulated by laws as well as knowledge, expertise and experience in 3 aspects: 1) Macro-level management, 2) Specialized fields such as laws, accounting, finance, economics, technology, and 3) Other fields such as corporate governance, corporate social responsibilities and sustainable development. Considerations will be also given to the ability to contribute to the greater prudence of the Board, the ability to make sound business judgment, strategic thinking ability, leadership, high-level of professional expertise, integrity, including other appropriate personal qualifications.

 

7. Director Election
 
(a) The Nomination, Compensation, and Corporate Governance Committee will select and nominate the candidate possessing suitable qualifications and being in compliance with relevant rules and laws for taking a position as the Bank’s director to the Board in order for the Board to consider appointing such candidate as a director in replacement of a vacant position, or to further propose such candidate to the shareholders’ meeting for election.
(b) The Board will choose one of the independent directors3 for appointing as the chairman of the Board.
The Board may appoint a director or directors as vice chairman or vice chairmen of the Board with the authority and duties as assigned by the chairman of the Board.

 

8. New Director Orientation
  Orientation will be arranged for every newly appointed director, who will be explained and provided with the appropriate briefings and information relating to the Bank, and will also be advised about the legal aspects, regulations, good corporate governance and other duties for being a director of the listed company in the Stock Exchange of Thailand and commercial bank.

 

9. Meeting
 
(a) At a meeting of the Board, not less than one-half of the directors must be present to form a quorum.
(b) The Board shall hold its meeting at least 6 times a year, and shall meet at least once every 3 months. Directors must attend all Board meetings and shareholders’ meetings unless there is overriding necessity.
(c) An invitation to a Board meeting must be provided to all members at least 7 days prior to the respective meeting date unless it is a matter of necessity and urgency to protect the Bank’s rights or benefits.
Other relevant documents should be submitted to the directors at least 5 business days prior to the date of each meeting so that they would have sufficient time to study the information.
(d) At Board meetings, at least two-thirds of all directors should be present during the voting procedure.
(e) The decision of the meeting of the Board shall be made by a majority of votes, unless applicable legal requirements stipulate otherwise. A director shall have 1 vote. In case of an equality of votes, the chairman of the meeting shall have a casting vote.
(f) A director having an interest in a given matter has no right to vote on such matter.

 

10. Board Committees
 
(a) The Board may appoint the Board Committees to assist the Board in carrying out any business under its responsibilities.
(b) The Board will, as it may deem appropriate, consider and approve the appointment of members of the Board Committees and the charters thereof, in which the essence with regard to the composition, duty and responsibility, administration, and other matters relating to the Board Committees, are included.

 

11. Assessment on Board Performance
 

The assessment on the performance of the Board will be conducted every year. The aforesaid assessment is divided into 3 types: (1) the assessment on the performance of each director individually; (2) the assessment on the overall Board performance; and (3) the assessment on the performance of the chairman of the Board. The Board will use the assessment results as the supplementary information of the Board’s recommendation to be proposed to the shareholders for the agenda item regarding the election of directors retired by rotation.

 

Definitions:
 
(1) “senior executive” means Senior Executive Vice President or Executive Vice President of the Bank or a person holding any equivalent position called otherwise, which shall include any executive holding the position of Executive Vice President or higher; such as, First Executive Vice President, etc.
(2) “Bank’s advisor” has the same meaning as the one assigned to such term in the Bank of Thailand’s Notification No. SorNorSor. 13/2552, Re: Corporate Governance of Financial Institutions (including any amendment thereto to be made in the future).
(3) “independent director” has the same meaning as the one assigned to such term 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. 39/2559, Re: Application for and Approval of Offering for Sale of Newly Issued Shares (including any amendment thereto to be made in the future). The number of shares held by an independent director and his/her related parties combined shall not exceed 0.5% of the total voting shares of the Bank, or the Bank’s parent company, subsidiaries, or associate companies, or major shareholders, or the persons having the authority to control the Bank. This shareholding restriction of not more than 0.5% is more stringent than that the standard 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 of which he/she is a director.
(4) “executive director” has the same meaning as the one assigned to such term in the Bank of Thailand’s Notification No. SorNorSor. 13/2552, Re: Corporate Governance of Financial Institutions (including any amendment thereto to be made in the future).