Corporate Governance

A Corporate Governance Statement may be obtained from our latest Annual Report.

A summary of the Corporate Governance Statement is appended below:

Board of Directors structure

  • The Board of Directors (“Board”) of UAB are made up of 7 members
  • The running of the Board is the responsibility of the Chairman whilst the running of the company’s business is the executive responsibility of the Chief Executive Officer (CEO).
  • U Ne Aung is presently the Non-executive Chairman of the Board
  • Mr. Christopher Loh is the Chief Executive Officer and he is a member of the Board
  • U Sein Win presently acts as the Senior Independent non-executive Director.
  • Independent non-executive Director means a director, not having any material relationship with the Company, either directly or as a shareholder or an officer of an organization that has a relationship with the Company.
  • The Senior Independent non-executive Director works closely with the Chairman, acting as a sounding board and also acts as an intermediary for other directors where advice is required or where concerns needs to be addressed.
  • Directors may hold up to a limit of 5 (five) board seats in public-listed companies. None of the members of the Board presently exceed the limit.

Board of Directors responsibilities

  • The Board of Directors (“Board”) is responsible for the overall governance, management and strategic direction of the Bank. It has ultimate responsibility for the Bank’s business strategy and financial soundness, key personnel decisions, organizational structure, governance framework and practices, risk management and compliance obligations.
  • The key responsibilities and the types of decisions made by the Board are:
  • keeping up with material changes in the bank’s business and external environment as well as act necessary changes in a timely manner to protect the long-term interests of the bank; 
  • overseeing the development of and approve the bank’s business objectives and strategies and monitor their implementation;
  • playing a lead role in establishing the bank’s corporate culture and values;
  • overseeing implementation of the bank’s governance framework and periodically review that it remains appropriate in the light of material changes to the bank’s size, complexity, geographical footprint, business strategy, markets and regulatory requirements;
  • establishing, along with bank’s officers, the bank’s risk appetite, taking into account the competitive and regulatory landscape in the banking industry and the bank’s long-term interests, risk exposure and ability to manage risk effectively;
  • overseeing the bank’s adherence to its risk policy and risk limits; 
  • approving the policy and oversee the implementation of key policies and rules pertaining to the bank’s capital adequacy assessment process, capital and liquidity plans, compliance policies and obligations, and the internal control system;
  • periodically reviewing key policies and rules to ensure their continued applicability and change or update where necessary;
  • requiring the bank to maintain a robust finance function responsible for accounting and financial data;
  • approving the annual financial statements and require an annual independent audit; 
  • approving the selection and performance of the CEO and other Officers;
  • overseeing the bank’s policies on salaries and benefits, including monitoring and reviewing executive compensation and assessing whether it is aligned with the bank’s risk culture and risk appetite; 
  • overseeing the integrity, independence and effectiveness of the bank’s policies and procedures for reporting fraud and other illegal activities; 
  • overseeing the development of, and approve the bank’s policy on transactions with related parties; and
  • overseeing the compliance of the bank with the Financial Institutions Law, regulations and directives issued there under.
  • The Chairman of the Board is elected by the members of the Board of Directors and he ensures leadership to the Board of Directors. Board meetings will be presided by the Chairman and in his absence, the meeting may be presided by a Directors elected by the members present. Minutes of Board meetings presided by the Chairman (or Director, in his absence), will be evidence of the proceedings of meetings or passing of resolutions. (Sect 157, Company Law 2017)
  • The running of the Board is the responsibility of the Chairman while the running of the company’s business is the executive responsibility of the Chief Executive Officer (CEO). There should be a clear division of responsibilities between the two positions which will ensure a balance of power and authority, such that no one individual has unfettered powers of decision.
  • Directors’ attendance at Board and Board Committee meetings in April 2018 to Sept 2018 is set out in the table below:

 

 

 

Board of Directors

Board Advisory  & Strategy Committee

Board Audit Committee

Board Risk Committee

Board Credit Committee

1.

U Ne Aung

5/5

6/6

NA

NA

NA

2.

D Khin Moe Nyut

5/5

NA

NA

NA

NA

3.

U Than Win Swe

5/5

6/6

3/3

2/2

11/11

4.

D Hnin Hnin Aung

5/5

6/6

3/3

2/2

11/11

5.

U Thant Zin

5/5

6/6

NA

2/2

11/11

6.

U Sein Win

5/5

NA

3/3

2/2

NA

7.

Mr Christopher Loh

5/5

6/6

NA

2/2

NA

 

  • From time to time, the directors attend various training sessions related to their duties including governance and risk management practices, updates on laws and legislations, anti-money laundering requirements and compliance requirements as well as the Bank’s digital channels. The Bank’s new and existing directors receive training on topics that are relevant to the business of the Bank and which meet the objective of equipping directors with the relevant knowledge and skills to perform their role effectively
  • The Governance structure of the Bank which is led by an experienced and engaged Board, provides an oversight of the relevant industry and company-specific risk. The Governance structure is to ensure that the Bank is managed in a safe and sound manner and this in the short, medium and long term impacts economic value and sustainability for all stakeholders including shareholders including shareholders, customers, employees, contractors, Government and society in general.

Board Committees

  • In implementing Good Corporate Governance principles, the Board has four (4) Board Committees namely:
    • Board Advisory & Strategy Committee
    • Board Risk Committee
    • Board Credit Committee
    • Board Audit Committee
  • Each Board Committee is governed by its Terms of Reference
  • A separate Audit Committee has also been instituted and its responsibilities are governed by Section 85 of the Financial Institutions Law 2016 and the Committee’s appointment by the Shareholders is for a period of 4 years. U Sein Win, an Independent Non-executive Director who is also a Certified Public Accountant (with 46 years of experience in Finance and Audit) presently chairs the Audit Committee. Other members are U Than Win Swe, Non-executive Director and Daw Hnin Hnin Aung, Non-Executive Director.
  • All functions of a Nominating Committee and Renumeration Committee are within the purview of the Board of Directors. The Board is of the view that given the size of the Bank, such functions does not need to be delegated to a sub-committee for the time being. These functions include reviewing nominations for appointment and re-appointments as well as removal of directors, Chief Executive Officer, key senior management officers and the company secretary. The overall composition of the Board and Board Committees, continuous development programme and successions plans for key positions including Chief Executive Officer are assessed by the Board of Directors. Further the remuneration policy for Directors and key senior positions are overseen by the Board

Performance review & Board appointments 

  • Succession planning is reviewed regularly. The CEO is assisted by the Deputy CEO who assumes his role in his absence. Similarly, each key senior management positions will be assisted by their respective deputies.
  • An annual assessment is conducted on the performance of the CEO and Senior Management members
  • The Board accepts that it has a responsibility to Shareholders that it maintains an appropriate mix of skills and experience (without gender bias) within its membership. Consequently, the Board gives careful consideration for the appointment it may recommend to Shareholders in accordance with the Constitution.  A screening process for Directors is made by the Board and they are required to meet the “Fit and Proper” criteria prescribed by the Central Bank of Myanmar.
  • An annual assessment of the Board of Directors is conducted and it is based on the Basle Committee’s Guidelines on Corporate Governance Principles for Banks

Appointment of Auditors

  • Auditors are appointed by the Shareholders at the Annual General Meeting and require the approval of the Central of Myanmar
  • To avoid conflict of interest appointed Auditors are not allowed to be appointed for other non-audit services.

Corporate Governance Framework

UAB’s Corporate Governance Framework sets the policies for corporate governance in the Bank.

  
                     

The governance structure apart from a leadership structure also includes  three (3) lines of defense to ensure awareness and accountability at different function levels:

  • First Line of Defense – The Risk Owner:
    The front-line employees are the first line of defense and have primary responsibility for implementing and executing effective controls for the management of risks arising from their business activities. They apply internal controls, limits and other risk responses to handle risk associated with transactions and unexpected events.  
  • Second Line of Defense – Risk Oversight:
    The Compliance and Risk functions (Credit Management, Branch Ops, Risk & Compliance) provide independent oversight over the activities of the first line of defense. They balance growth with stability by establishing the risk framework, appetites and limits. Risk issues are highlighted to the respective committees.
  • Third Line of Defense – Independent Audit:
    The Bank's internal auditors and external auditors report independently to CEO, Audit Committee and the Board. They conduct risk-based audits covering all aspects of the First and Second Lines of Defense to provide independent assurance on the effectiveness of the risk management and control structure, policies, frameworks, systems and processes.

The Governance structure of the Bank from which leadership and corporate values emanates, is central to the short term, medium term and long-term creation of value for stakeholders.  The governance structure is designed to ensure that the Bank is managed in a safe and sound manner with a high level of discipline and professionalism. The Bank therefore is committed to the building of a sound governance structure as a key component of its business model.

 

Risk Governance

UAB’s risk management structure is illustrated in the following diagram and it is designed to ensure that appropriate risk management and governance is accorded to the Bank.
 
                     

Risk is managed within the levels established by the Senior Management and approved by the Board of Directors. Various sub-committees within the Bank govern and monitor the risk levels at the Bank and ensure that it operates within the levels established.

Within the Risk Management Framework, the Bank ensures that all key risk elements are categorized and sufficiently robust contingency planning is appropriated. Key risk elements faced by the Bank include Liquidity Risks, Market risks, Credit Risks and Operational Risks. A more detailed assessment and up-date of Risks  is provided in the Annual Report of the Bank.

Processes are put in place to identify, measure, mitigate and monitor risk. Reports are made to various management and board committees and a process for escalation is available where risk levels require such escalation.

Policies, procedures, guidelines and manuals are issued and a Management Information System which is sufficiently robust provides support to risk governance.

The overarching influence within the Risk Management Framework is the Risk Culture and this is the set of encouraged and accepted behavior towards taking and managing risk. The Board and Management sets the tone for UAB’s risk culture in its deliberations, managers conferences, training programs and written statements.
 
 

 

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