Corporate Governance

Dear Stakeholders

Our commitment to good governance serves as the cornerstone of our success enabling us to navigate uncertainty with agility and adaptability. The Bank's robust corporate governance framework fosters a culture where integrity, accountability and transparency are valued and upheld across all levels. In 2024, the Board and its Sub-Committees worked collaboratively, to drive strategic initiatives while mitigating risks to deliver value to stakeholders. Furthermore, the Board proactively strengthened the Bank's resilience by implementing and evolving the corporate governance framework to align with emerging regulatory requirements and best practices.

Board Focus

The operating environment during the year under review was dynamic and challenging and the Board continued to proactively monitor these developments and adapt strategy accordingly. The five-year strategic plan crafted by the top global consultancy firm in 2023 was implemented for 2024-2028 and the Board monitored performance closely. Emphasis was also placed on monitoring the effectiveness of the Bank's risk management strategy as evolving macro-economic conditions presented new challenges necessitating proactive mitigation measures. Maintaining strong capital buffers and ensuring financial stability was another key focal area of the Board during the year under review. Positioning the Bank for the future by advancing the Bank's digital strategy and integrating sustainability into its decision making also accounted for a significant share of the Board's agenda.

A Strengthened Board

Ensuring that the Board possesses the requisite skills, knowledge and diversity, particularly in an ever-evolving world, is a key imperative of the Board. To this end, the Board was strengthened further in 2024 with the appointment of Mr Keith Modder as an Independent Non-Executive Director. Mr Modder brings with him a wealth of experience in the IT industry and I am confident he will strengthen the IT expertise of the Board. I take this opportunity to express our gratitude to Mr Prabhash Subasinghe who resigned from the Board in 2024, for his invaluable contributions to the Bank during the tenure as a Non-Independent, Non-Executive Director. 2024 also saw the reconstitution of the Board’s Sub-Committees as we sought to bring in fresh perspectives and enhance oversight to better meet evolving business needs.

A Culture Anchored on Ethical Conduct

The Board, collectively and individually sets the tone for promoting ethics and integrity across the Bank and continued its guidance and supervision to foster a strong ethical culture within the Bank. The "Policy on Internal Code of Business Conduct and Ethics for Directors", the Code of Conduct for Corporate Management and the Code of Conduct for other Employees articulate the Bank's ethical standards and expectations of its employees. Employees are required to attend regular awareness sessions to ensure they understand the ethical standards expected of them. The Bank's "Policy on Anti-Bribery and Corruption" outlines its commitment to ethical business practices and prohibits bribery, corruption and other forms of unethical behaviour. The Bank's commitment to ethical business practices is reinforced by its “Policy on Whistleblowing” which ensures confidentiality and protection for stakeholders reporting irregularities in good faith.

Regulatory Landscape

Regulatory developments in 2024 saw the issuance of the Banking Act Direction No. 05 of 2024 on Corporate Governance for Licensed Banks by the Central Bank of Sri Lanka (CBSL). The Board reviewed the requirements of the Direction and carried out a gap analysis to identify areas for improvement. While the Bank remained compliant with many of the requirements of the new Direction, a roadmap was established to ensure regulatory compliance in all areas by the respective due dates. I am pleased to confirm that the Bank is fully compliant with the requirements of Section 9 of the Listing Rules of the Colombo Stock Exchange (CSE) issued in September 2023, following shareholder approval in March 2024 to amend the Bank's Articles of Association accordingly.

Strengthening Sustainability Governance

The Board has guided the Bank's sustainability strategies which focus on integrating sustainability into the Bank's business processes and supporting the global Sustainable Development Goals and National Determined Contributions. We appointed a Board Sustainability Committee to assist with oversight on sustainability reporting which moves into a mandatory reporting era from 2025 and institutionalised frameworks and processes to identify, monitor and manage sustainability related risks and opportunities.

Compliance

On behalf of the Board, I declare that the Bank, including the Board of Directors, Corporate Management and Employees have complied with the principles of good governance as set out in the Code of Best Practice on Corporate Governance 2023 issued by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and the regulatory frameworks applicable to Licensed Commercial Banks including the Banking Act Direction No. 11 of 2007 on Corporate Governance for Licensed Commercial Banks and the Banking Act Direction No. 05 of 2024 on Corporate Governance for Licensed Banks issued by the CBSL. The Bank has also complied with Section 9 of the Listing Rules of the CSE and all other applicable regulations as well as the Bank’s internal constitutional framework.

The Bank upholds a Code of Conduct and Ethics that includes guidelines for dissemination, monitoring and compliance to Statutory and Voluntary Governance requirements. During the year under review, this Code has been strictly followed and all incidents within its scope have been addressed by the Bank’s Disciplinary Committee.