CIMB Board of Directors oversees the business affairs of the Group and aims to create value for shareholders by focusing on the development of the right Group strategy, business model, risk appetite, management, succession plan and compensation framework. It also seeks to align the interests of all stakeholders and sets the tone for the Group where ethics and values are concerned.
Board Composition and Balance
The size and composition of the Board are reviewed from time to time. Given the current scope and geographical footprint of the Group’s operations, the Board is of the view that the current size of the Board is appropriate. In order to ensure CIMB continues to be able to meet the challenges and demands of the markets in which the Group operates, the Board is focused on enhancing the diversity of skills, expertise and perspectives of the members.
The Board recognises the importance of Independent Directors to CIMB particularly in ensuring impartiality and objectivity. Independent Directors provide the necessary check and balance for the best interests of the Group. As an additional measure to reinforce the independence of the Board, CIMB constantly ensures that Independent Directors constitute a majority of the Board at all times, in line with Recommendation 3.5 of the MCCG 2012. This exceeds the required ratios of Independent Directors set out in the Bursa Malaysia Securities Berhad (Bursa Securities) Main Market Listing Requirements (MMLR), BNM CG Guidelines and BNM’s Shariah Governance Framework for Islamic Financial Institutions (collectively ‘BNM Guidelines’) and The Green Book.
The Board aims to maintain a diversity of expertise, skills, and attributes among the Directors. The Board is also committed to pursuing gender, age and nationality/ethnicity diversity across the Group as the combination of personalities provides a comprehensive range of perspectives and experiences resulting in improved quality of decision making.
The Board realises the importance of the Independent Director’s role and has adopted policies and procedures that ensure their effectiveness. In line with Recommendation 3.2 of the MCCG, it is CIMB’s policy that an Independent Director’s tenure is limited to a maximum of nine years.
An Independent Director is appointed to the Board for their objectiveness, skills and abilities that may add value to the Board. Over time, however, material relationship with CIMB other than solely as a result of being a Director may materialise. The Board, through the Group Nomination and Remuneration Committee therefore, assesses the independence of its Independent Directors annually, using the Board and Board Committee Effectiveness Assessment questionnaire, in line with Recommendation 3.1 of the MCCG 2012. Additional criteria that are assessed to determine each individual Director’s ability to exercise independent judgment are:
- The individual is free from any business or other relationship which can materially pose any conflict of interest or interfere with the exercise of Director’s judgement or will be disadvantageous to CIMB Group or CIMB Group’s interest.
- The individual’s ability to provide objective challenges and constructive feedback to Management, focusing on root cause of issues and potential actions required to rectify the issues discussed; and
- The individual’s readiness to challenge others’ assumptions, beliefs or viewpoints for the good of CIMB Group.
Any Director who considers that he or she has or may have a conflict of interest or a material personal interest in any matter concerning CIMB, is required to give the Board and/or the Group Company Secretary immediate notice of such interest
Segregation Of The Positions Of Chairman And Group Chief Executive Officer/Managing Director
CIMB adopts a leadership model which clearly delineates the roles and responsibilities between the Chairman and the Group Chief Executive/Managing Director. These two positions are to be held by different individuals with distinct and separate functions. This ensures an optimal balance of power resulting in increased accountability and enhanced decision-making.
The Chairman is responsible for ensuring that the Board discharges its duties effectively and for enhancing the Group’s standards of corporate governance. The Chairman provides clear and distinct leadership while maintaining open lines of communication with Senior Management, as well as oversees, guides, advice s and provides support to the Group Chief Executive Officer/Managing Director and subsequently, Senior Management, particularly in strategic matters with respect to the Group’s long-term growth. A healthy relationship is forged between the Chairman and the Group Chief Executive Officer/Managing Director.
The Chairman also encourages constructive relations within the Board, and between the Board and Senior Management. Directors and members of the Group Management Committee interact with each other through CIMB’s corporate events, scheduled Board meetings and at the Annual Management Summit.
Group Chief Executive Officer/Managing Director
The Group Chief Executive Officer/Managing Director heads the Group Management Committee, which is the highest management committee within CIMB. He is tasked with leading the development and execution of CIMB’s long-term strategy with a view to creating Shareholder value. The Group Chief Executive Officer/Managing Director is ultimately responsible for all the day-to-day management decisions and for implementing the long and short-term plans in the Group. He also acts as a direct liaison between the Board and Management; and communicates to the Board on behalf of Management and to Shareholders, employees and other stakeholders on behalf of CIMB.
Senior Independent Director
The Senior Independent Director serves as the point of contact between Independent Directors and the Chairman on sensitive issues and acts as a designated contact to whom stakeholders’ concerns or queries may be raised, as an alternative to the formal channel of communication with stakeholders. The role of the Senior Independent Director is included in the Board Charter which is accessible on CIMB’s website.
Stakeholders’ queries can be e-mailed directly to the Senior Independent Director at cimbSID@cimb.com or directed to the following address:
Level 13, Menara CIMB
Jalan Stesen Sentral 2
Kuala Lumpur Sentral
50470 Kuala Lumpur
Appointments To The Board
The Group Nomination and Remuneration Committee oversees a rigorous and thorough process for the appointment of directors to the Boards of CIMB and its subsidiaries. The Committee screens and proposes to the Board qualified candidates to serve as Directors and members of Board Committees. The screening process is based on a set of criteria adopted by the Board which assesses the candidates’ knowledge, capabilities, and experience required for the position and any gaps that exist within the Board. In the case of Independent Directors, their independence is also assessed.
The procedures adopted are in accordance with the BNM Guidelines and CIMB’s Fit and Proper Policies and Procedures for Key Responsible Persons. The policy sets out a formal and transparent process for the appointment, re-appointment and annual assessment of Chairman, Directors, CEOs/Managing Directors, Board Shariah Committee members and Key Senior Management. The appointment and re-appointment of Directors are subject to BNM’s vetting and prior approval.
Re-appointment And Re-election Of Directors
Pursuant to Article 83 of the Articles of Association and paragraph 7.26(2) of the MMLR, Directors appointed during the year are subject to election by the Shareholders at their first Annual General Meeting after their appointments. The election of each director is conducted separately, unless the Shareholders recommend the election to be carried out in a single motion. Pursuant to Section 129(6) of the Companies Act 1965, Directors who have reached the age of 70 are required to retire from office at the Annual General Meeting and may offer themselves for re-election by the Shareholders.
Pursuant to Article 76 of the Company’s Articles of Association and paragraph 7.26(2) of the MMLR, no Director should serve more than 3 years without seeking re-election at the Annual General Meeting. Therefore, after considering any Directors that are retiring due to age and any newly appointed Directors, one-third of the Directors shall retire from office at the Annual General Meeting based on who have been longest in the office since their election. Being eligible, they may offer themselves for re-election by the Shareholders.
Each Board member is expected to commit sufficient time to carry out their role as a Director and if applicable, as a member of the Board Committees. In any given situation, in accordance with the MMLR and the Green Book, the number of directorships for each Director is limited to five in public-listed companies and 10 in non-listed companies. This is to ensure the Directors have the time to focus and fulfil their responsibilities effectively.
The Board values the experience and perspective gained by Directors from their services on the Board of other companies, organisations and association. Directors are, however, expected to advise the Chairman of the Board and the Group Nomination and Remuneration Committee of their intention to join the Board of another public listed company outside the Group. The Director is expected to indicate the time commitment of the new appointment.
The Board is informed of changes to the directorships held by its members on a quarterly basis and is satisfied that the current external directorships held by the Board members would not impair their ability to contribute to the Company and that the Directors are able to devote sufficient time to the Company in discharging their roles and responsibilities effectively.
Meetings And Supply Of Information To The Board
The Board meets as often as necessary to fulfil its roles and responsibilities. A Director who has interest, either direct or indirect, in any proposal or transaction being considered must declare his or her interest and abstain from participating in discussions and any decision-making on that proposal. The minutes of meeting will reflect as such.
The calendar for Board meetings providing scheduled dates for meetings of the Board and Board Committees for the whole year, are fixed in the 3rd Quarter of the preceding year, so as to enable the Directors to plan ahead and ensure that the Board meetings are booked into their respective schedules. Special Board meetings are held when necessary, to deliberate on major transactions and ad-hoc matters that require the Board’s urgent attention and decisions. Every 4th Quarter of the year, a Special Board meeting is held to plan and discuss CIMB’s Business Strategy, together with the Business Plan and Budget for the ensuing year.
Participation in Board meetings are expected to be in person. Article 99 of the Company’s Articles of Association, however, allows the use of tele-conference and tele-presence if Directors are unable to attend physically. In the event Directors are still unable to participate, they are encouraged to provide feedback to the Chairman/Group Company Secretary on matters to be deliberated for their views to be given due consideration at the meeting.
Board approvals for routine matters in the ordinary course of business are permitted under the Articles of Association of CIMB to be obtained through resolutions approved by circulation.
The Annual Management Summit held annually is a key highlight of the Board’s activities. This event gives the Directors the opportunity to interact with CIMB’s senior management and vice versa.
Dealings in Securities
The Board recognises CIMB’s role in preserving the integrity of the capital market and the risks of insider trading for financial institutions, particularly for investment banks. Therefore, the Board has adopted a more stringent policy in relation to dealings in securities by Directors and Key Senior Management than that required by the MMLR. The Directors and Key Senior Management who have access to price-sensitive information of the Company and any other listed companies are strictly prohibited from dealing in the securities of the Company and that of other listed companies. In addition, no dealing in the securities of the Company by Directors and Key Senior Management is permitted during closed periods, which commences 30 calendar days before the targeted date of the announcement of the quarterly results up to the date of the announcement.
Dealings by Directors and Key Senior Management are reported to the Group Company Secretary within three business days and announced immediately through Bursa upon receipt of such notice. Dealings by Directors and Key Senior Management in the Company’s shares are disclosed to the Board on a quarterly basis.
Board Access to Information
The Board and Board Committees have a right to complete, relevant and timely information concerning financial performance, updates on corporate development, business progress, risk, compliance and proposals. The Board also requires sufficient time to evaluate reports and proposals. The Board has a right to request for additional information and time, to enable the Board to discharge its responsibilities effectively
The Directors may communicate directly with Key Senior Management to seek advice and request further information as well as updates on any aspect of CIMB’s operations and business concerns. Relying on the integrity of the Company’s Senior Management with access to expertise in legal, accounting, financial and other advisors, the Directors are able to effectively discharge their duties.
The Directors have unrestricted and independent access to the advice and services of the Group Company Secretary at all times. The Group Company Secretary is responsible to provide support and guidance to the Board on policies and procedures, rules and regulations and relevant laws as well as best practices on governance.
In addition, the Directors have the right to seek independent advice on specific matters that in their opinion requires unbiased evaluation, at the expense of CIMB. A formal procedure is in place to facilitate them in seeking independent professional advice. A copy of the report or independent advice will be made available to the Chairman and, if deemed appropriate, be circulated to all Directors for deliberation.
The Group Company Secretary is responsible for advising and assisting the Board on matters relating to the affairs of the Company, including but not limited to matters pertaining to governance and best practices, boardroom effectiveness and Directors’ duties and responsibilities. Under Section 139(3) of the Companies Act, 1965, the appointment and removal of the Group Company Secretary is a matter reserved for the Board. The Board ensures that all its Directors have access to the advice and services of the Group Company Secretary who is suitably qualified and competent, in line with Recommendation 1.6 of the MCCG 2012.
Training And Development Of Directors
The Board recognises the importance of continuing education for its Directors to ensure they are equipped with the necessary skills and knowledge to perform their functions and meet the challenges of the Board.
Each director is responsible to ensure that they have the competence to carry out the role and responsibilities of a Director. They are encouraged to participate in training courses or activities, seminars and speaking engagement as well as company activities as this will serve to enhance their knowledge and performance as members of the Board and Board Committees. The role to review the training needs and professional development of Directors is delegated to the Group Nomination and Remuneration Committee.
The Board recognises that Directors’ development is integral to effective governance and is mindful of the need for Directors to keep abreast with industry developments, regulatory changes, changing commercial risks and latest market trends regionally and globally, affecting the banking and financial industry. As such, CIMB commits to keep Directors regularly informed of relevant training courses in advance for their consideration.
Every newly appointed Director receives an information pack comprising of relevant updated corporate information of CIMB and the Board Charter. Additionally, a comprehensive and tailored induction is arranged as part of the on-boarding programme to assist the Director in familiarising themselves with the discharge of their duties. It also serves to introduce CIMB’s businesses, operations, challenges and governance practice and arrangements, amongst others. They are encouraged to visit CIMB’s regional entities to familiarise themselves and to have a holistic view of the Group’s regional businesses. Directors that have never been appointed to a public listed company are required under Practice Note 5 of the Main Listing Requirements to attend the Mandatory Accreditation Programme (MAP) organised by an approved body corporate within 4 months of their appointment.
The relevant Heads of Divisions brief the Directors on the functions and areas of responsibility of their respective divisions during the induction programme. This serves a dual function, which is to familiarise the Directors with the operations and organisational structure of CIMB, as well as serve as a platform to establish an effective channel of communication and interaction with Key Senior Management.
The Group Company Secretary facilitates the Directors attendance in training programmes, briefings, workshops and seminars that are conducted in-house or by external providers. A comprehensive list of training programmes covering topics relevant to the Directors is sent to all Directors at the beginning of the financial year. CIMB’s Directors have actively participated in programmes organised by regulators and industry associations such as the BNM/Financial Institutions Directors’ Education (BNM/FIDE) programme, Malaysian Directors’ Academy (MINDA) programme, as well as training and conferences organised by Bursa Securities and the Securities Commission.
CIMB has established a remuneration framework for its Directors and Key Senior Management. This framework includes fees, monthly and meeting allowances for Non-Executive Directors which are based on industry standards and set by reference to the responsibilities taken on by them. The framework is sufficient to attract and retain Directors for their contributions to CIMB.
In order that the remuneration framework remains competitive and consistent with CIMB’s high performance culture, objective and strategy of CIMB, the framework for Non-Executive Directors is reviewed periodically or at least once every 3 years to ensure that they remain market-competitive. The remuneration for Non-Executive Directors or any proposed increase in the remuneration is tabled to the Shareholders for approval.
In reviewing the remuneration package, the criteria in determining the fee quantum is based on the Directors’ responsibilities and accountability to the Shareholders, membership in Board Committees, expertise, performance, risk, complexity and scope of business of CIMB. Where necessary, independent advisers or consultants are engaged to provide independent advice to the Group Nomination and Remuneration Committee on specific areas. To avoid any conflicts of interest, no individual Director has any influence on the decision pertaining to his or her own remuneration. The remuneration of the Directors in office during the financial year is also disclosed in CIMB’s Financial Statements.