Board Human Resources and Remuneration Committee Report

The Board Human Resources and Remuneration Committee oversaw the further strengthening of the Performance Management framework by aligning the Key Performance Indicators of the leadership with the Strategic Plan 2025 to support the ambitious business goals of the Bank.

Keshini Jayawardena

Chairperson

Regular attendees to the Committee meetings by invitation:
  • Managing Director (MD)
  • Chief Human Resource Officer (CHRO)
  • Head of Human Resources (HOHR)

The Company Secretary functioned as the Secretary to the Committee and in his absence, a nominee appointed by the Company Secretary functioned as the Secretary to the Committee during the year under review.

REGULATIONS/RULES RELEVANT TO THE FUNCTIONS OF THE COMMITTEE

The role, functions and the composition of the Board Human Resources and Remuneration Committee (BHRRC) are defined by the provisions of the:

  • Banking Act Direction No. 11 of 2007 on Corporate Governance for Licensed Commercial Banks issued by the Central Bank of Sri Lanka (Direction 2007);
  • Banking Act Direction No. 05 of 2024 on Corporate Governance for Licensed Banks issued by the Central Bank of Sri Lanka (Direction 2024);
  • Section 9.13 of Listing Rules of the Colombo Stock Exchange (CSE Rules);
  • Code of Best Practice on Corporate Governance 2023 issued by the Institute of Chartered Accountants of Sri Lanka (Code 2023).
COMMITTEE MEMBERSHIP DURING THE YEAR 2024
Board Member Directorship Status Membership Status Attendance (Attended/Eligible to Attend)
Mrs Keshini Jayawardena Independent/Non-Executive Chairperson (w.e.f 1st June 2024) 6/6
Ms Aroshi Nanayakkara Independent/Non-Executive Member (Chairperson until 31st May 2024) 6/6
Mr Dilip de S Wijeyeratne Independent/Non-Executive Member 6/6
Mr Vajira Kulatilaka Independent/Non-Executive Member 6/6
Mr Vinod Hirdaramani Independent/Non-Executive Member 4/6
Mr Keith Modder (w.e.f 1st June 2024) Independent/Non-Executive Member 2/3

w.e.f - with effect from

Refer pages 186 to 189 for the profiles of the committee members.

KEY ACTIVITIES IN 2024
  • The Key Performance Indicators (KPIs) of Key Management Positions were agreed at the beginning of the year in line with the Strategic Plan of the Bank to support the achievement of the bank’s ambitious goals.
  • During the year the committee further reviewed the Performance Management System (PMS) introduced in 2022. Next year, 2025 onwards, will see continuous improvements being incorporated into the system to promote greater engagement of the team and drive performance.
  • HR policies were reviewed this year and necessary changes were incorporated in order to ensure the overall performance of the Bank and future business requirements with special emphasis on risk and governance requirements.
  • The remuneration structure of the employees was reviewed with the increment cycle of the Bank and appropriate remuneration and salary structures were finalised.
  • The BHRRC continued to review the Succession Planning process of the Bank aiming at seamless leadership transition of the second and third tier of leadership. Individual Development Plans were completed for senior management with the involvement of BHRRC to further enhance the leadership team with continuous, topical and tactical leadership skills. This process will continue in 2025.
KEY RESPONSIBILITIES OF THE COMMITTEE
  • Formulating remuneration policies relating to Directors, CEO/MD and Key Management Personnel (KMPs) and submitting the same for the approval of the Board.
  • Identifying goals and targets for the Directors, CEO/MD and KMPs and submitting the same for the approval of the Board.
  • Evaluating the performance of the CEO/MD and KMPs against set targets and goals periodically and submitting the same to the Board, together with recommendations for the revision of remuneration, benefits and other performance-based incentives.
  • Recommending to the Board such amendments to its scope as may, in its view be desired, to achieve better corporate governance objectives.
  • Advising the KMP heading the Human Resources Department of the Bank with regard to revision of salaries of Bank staff and any major organisational changes needed for the Bank's purpose.
  • Recommending and keeping under review, the Human Resources Strategy including key HR Objectives, Plans and workforce requirements in line with the overall annual/medium- term strategic objectives of the Bank and monitoring implementation of the same.
  • Reviewing, commenting and reporting to the Board on HR related matters including development plans, talent retention and career development of potential successors.
  • Monitoring and making all necessary recommendations to the Board on ethical standards with regard to human capital and ensuring that the management has institutionalised a process to ensure compliance with these standards.
  • Keeping the provisions of the Bank's Pension Plan under review.
  • Assessing the performance of the Committee based on the requirements.
  • Reviewing the Terms of Reference of the Committee periodically and ensuring that it reflects the best practices of the industry at all times.
DECLARATION BY THE COMMITTEE

The Bank has already complied with the requirements stipulated under the Banking Act Direction No. 05 of 2024 on Corporate Governance for Licensed Banks issued by the Central Bank of Sri Lanka, which is effective from 1st January 2025 as appropriate. Further, the Bank will ensure overall compliance with the aforementioned regulation in accordance with the timelines specified therein.

REPORTING TO THE BOARD

The minutes of the Committee meetings were tabled at Board meetings, thereby providing the Board members with access to the deliberations of the Committee.

PERFORMANCE EVALUATION OF THE COMMITTEE

The annual self-evaluation of the Committee was conducted at the year- end by the members of the Committee. The results were discussed at the Committee with, where necessary, areas for improvement being identified and the plans for improvement being communicated to the Board.

On behalf of the Board Human Resources and Remuneration Committee,

KESHINI JAYAWARDENA

Chairperson - Board Human Resources and Remuneration Committee

17th February 2025

Colombo, Sri Lanka

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