Corporate governance
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GOVERNANCE FRAMEWORK
SBM Holdings Ltd (“SBMH” or the “Company” or the “Organisation”) operates within the best practice of corporate governance framework appropriate to the Organisation. SBMH believes that good corporate governance emerges from the application of the best and sound management practices and compliance with the applicable rules and regulations coupled with adherence to the highest standards of transparency and business ethics.
The Board of Directors of SBMH (the “Board”) guides the success of the Group by steering the overall corporate direction, setting policies, selecting and appointing senior executives and ensuring that major decisions taken are ethical, transparent, prudent and in the best interest of all the stakeholders. Being a public listed entity on the Stock Exchange of Mauritius (“SEM”) and a Reporting Issuer vis-à-vis the Financial Services Commission (“FSC”), the Company ensures adherence to the Companies Act 2001 (the “Act”), the National Code of Corporate Governance for Mauritius (2016) (the “Code”), the SEM Listing Rules as well as other applicable Mauritian laws, guidelines and regulations.
The SBMH Governance Structure is as follows:
THE BOARD, BOARD COMMITTEES AND MANAGEMENT COMMITTEE
1. THE BOARD
SBMH has a unitary Board structure, comprising 4 Independent Directors (including the Chairman), 2 Non-Executive Directors and 1 Executive Director. This composition complies with Section 14.1 of the Constitution of the Company and the Code.
The biography of the Directors is accessible here.
• Board Charter
The Board has adopted a Charter which sets out its objectives, roles and responsibilities. The Charter is an extension of the Constitution of SBMH and should be read in conjunction therewith. The Charter is approved by the Board and reviewed regularly in consultation with the Corporate Governance, Conduct Review & Sustainability Committee (“CGCRS Committee”).
The Board Charter can be viewed on this link.
• Accountability Statement
SBMH is headed by an effective Board which is collectively accountable and responsible for the performance and good running of the Group. The Board, assisted by its Board Committees and Management Team, ensures that the Group operates within a clearly defined governance framework through appropriate delegation of authority and clear line of responsibilities, while enabling the Board to have adequate control and oversight over the operations of its subsidiaries.
• Statement of Compliance
The Statement of Compliance as per Section 75(3) of the Financial Reporting Act 2004 can be found in our Annual Report 2022 and is accessible as per this link.
2. BOARD COMMITTEES
The Board is supported by the following Board Committees to discharge its duties effectively. Each Committee of the Board is guided by its own Terms of Reference (“TOR”), which defines the scope and powers of the Committee, which is also mandated to provide recommendations and specific expert guidance on matters affecting the Group’s activities. All the decisions and recommendations of the Committees are placed before the Board for information/approval. The Board evaluates and reviews the membership as well as the roles and responsibilities of the Committees on a yearly basis or as and when required.
The TOR of all the Board Committees of SBMH can be viewed by clicking here.
Audit Committee
Members
• Dr Subhas Thecka (Chairperson)
• Ms Shakilla Bibi Jhungeer
• Ms Sharon Ramdenee
Role and responsibilities
The Audit Committee assists the Board in fulfilling its responsibility with respect to (i) safeguarding of assets, (ii) operation of adequate systems & control processes, (iii) oversight of the Group’s consolidated financial statements, financial reporting process, systems of internal accounting and financial controls; (iv) statements in compliance with all applicable legal requirements and accounting standards, (v) the performance of internal audit function and (vi) the engagement of Group’s external auditors and the evaluation of the external auditors’ qualifications, independence and performance.
Business Review Committee
Members
• Mr Jean Paul Emmanuel Arouff (Chairperson)
• Ms Shakilla Bibi Jhungeer
Role and responsibilities
The Business Review Committee assists the Board in fulfilling its responsibility with respect to overseeing and monitoring the overall performance of the SBM Group, i.e. SBMH and its subsidiaries within the Banking and the Non-Banking Financial Clusters.
Corporate Governance, Conduct Review & Sustainability Committee
Members
• Ms Shakilla Bibi Jhungeer (Chairperson)
• Mr Jean Paul Emmanuel Arouff
• Ms Sharon Ramdenee
Role and Responsibilities
The CGCRS Committee shall ensure that the Group’s Policies on corporate governance are in accordance with the applicable laws and regulation and that sound governance principles are adopted across the Group.
Nomination & Remuneration Committee
Members
• Mr Jean Paul Emmanuel Arouff (Chairperson)
• Ms Shakilla Bibi Jhungeer
• Ms Sharon Ramdenee
Role and Responsibilities
The Nomination & Remuneration Committee (“REMCO”) ensures that employees are paid based on performance and also that pay is set at a level which allows the Group to attract, retain and motivate employees, but is no more than necessary to ensure that the Group accelerates the delivery of shareholder value. It is also responsible for remuneration, succession planning and other Board concerns including their on-going training and access to technical support and information.
Projects Assessment Committee
Members
• Ms Shakilla Bibi Jhungeer (Chairperson)
• Mr Jean Paul Emmanuel Arouff
Role and responsibilities
The Projects Assessment Committee have an oversight on the strategic projects which would have an impact on the SBM Group’s operating entities. It shall oversee the implementation of group related projects to ensure that goals and objectives of those projects are achieved within the prescribed time frame, budget and scope of work.
Risk Management Committee
Members
• Ms Sharon Ramdenee (Chairperson)
• Mr Raoul Gufflet
• Dr Subhas Thecka
Role and responsibilities
The Risk Management Committee supervises the Group’s overall current and future risk appetite, oversee the senior management’s implementation of the risk appetite framework and reporting on the state of risk. It assists the Board in fulfilling its responsibility with respect to (i) oversight of SBMH Group risk management framework, including policies and practices in managing credit, market, operational, legal, compliance and other risks and (ii) oversight of SBM Group’s policies and practices related to funding risk, liquidity risk and price risk which are significant components of market risk and risk pertaining to capital management.
Strategy Committee
Members
• Mr Abdul Sattar Adam Ali Mamode Hajee Abdoula (Chairperson)
• Mr Raoul Gufflet
• Ms Sharon Ramdenee
• Mr Visvanaden Soondram
Role and responsibilities
The Strategy Committee is responsible to (i) review, validate and recommend the Group strategic plan to the Board, (ii) monitor the overall performance of SBMH and its subsidiaries along with the execution of selected strategic initiatives, investments and projects, (iii) discuss and recommend strategic endeavours that have a meaningful impact on the Group, while assessing proposed initiatives and projects and (iv) review and assess the utilization of capital, alongside ensuring that the Group and its operating entities meet their respective underlying capital adequacy, funding and liquidity requirements.
3. MANAGEMENT COMMITTEE
Group Executive Committee (“Group ExCo”)
The SBMH Board established the Group ExCo, led by the Group Chief Executive Officer (“Group CEO”) and having as Members all the Senior Management Team of SBMH. The Group ExCo assists to (i) implement the Group’s strategy, operational plans, policies, procedures, and budgets, (ii) provide support to the entities, (iii) assess and manage risks and (iv) improve synergy and alignment. The Group ExCo meets on a fortnightly basis and reports to the SBMH Board/Board Committees through the Group CEO.
Group Functional Forums
In order to ensure adequate oversight and effective control as well as improve synergy between the different entities of the Group, the following Group Forums have been established at Management level.
KEY GOVERNANCE POSITION
The key governance positions have been approved by the Board through the CGCRS Committee and are crucial to ensure the Board’s performance towards the Group’s strategy and the achievement of a high level of good governance. The key governance positions within SBMH are as follows:
• Chairman
• Directors
• Group Chief Executive Officer
• Group Chief Risk & Compliance Officer
• Company Secretary
Whilst the Chairman and the Group CEO are collectively responsible for the leadership of the Group and for promoting the highest standards of integrity and probity, good governance requires a clear and effective division of accountability and responsibility between the Chairman and the Group CEO. Each plays a distinctive but complementary role to ensure that there is a proper balance of power and authority, and that no individual has unfettered powers of decision and control.
The roles and responsibilities of the key governance positions are reviewed and approved by the Board through the CGCRS Committee. They can be found in our Corporate Governance Report and can be accessible by clicking here.
The biography of the Company Secretary could be accessible on this link.
DIRECTOR NOMINATION AND APPOINTMENT PROCESS
The Company has adopted a formal, rigorous and well-defined procedure for the appointment of Directors on its Board. All appointments are made on merit basis against a set of objective criteria, in the context of skills and experience required for the Board to be effective and guard against groupthink. The CGCRS Committee and the REMCO are responsible for reviewing the composition of the Board and its Committees and for assessing whether the balance of skills, experience, knowledge and diversity is appropriate to operate effectively, are in place. The appropriate recommendations are then made to the Board.
The responsibility for the appointment of Directors rests with the Board, while ensuring adherence to the criteria laid down in the SBMH Constitution, the Group Fit & Proper Person Policy, the BOM Guidelines on Fit and Proper Person and the Code in terms of the board balance. Directors are elected/re-elected via separate ordinary resolutions by the shareholders at the Annual Meeting of Shareholders and hold office until the next Annual Meeting.
The Directors’ appointment process is defined under Principle Three of the Corporate Governance Report as follows:
The terms and conditions for the appointment of a Non-Executive Director are defined in the letter of appointment which is handed over to the Director once all regulatory clearance, as applicable, is obtained. Same could be viewed per the following link.
KEY GOVERNANCE DOCUMENTS
The Key Governance Documents are the officially adopted documentations that govern the Company and assist the Board, Committees and Leadership Team in delivering their respective duties. The Board has approved various key guiding documents, some of which are:
• SBMH Constitution
• Code of Ethics and Business Conduct
• Group Information Security Policy
• Group Subsidiary Governance Policy
• Group Related Party and Conflict of Interest Policy
• Group Whistle-Blowing Policy
The Company is also governed by other Policies, duly approved by the Board through the respective Board Committees.
RELATIONSHIP WITH SHAREHOLDERS AND OTHER KEY STAKEHOLDERS
• Stakeholders of the SBM Group
SBMH engages with all its stakeholders to understand and respond to their specific expectations and concerns. This provides valuable insights that help us shape our priorities and strategy. Our engagement approach is tailored to each stakeholder and is reviewed regularly to strengthen its effectiveness. The main stakeholders of the SBM Group are as follows:
• Communication with the Stakeholders of the SBM Group
(i) Annual Meeting of the Shareholders
At each Annual Meeting, the shareholders are generally apprised of the Company's financial and non-financial performance and strategy. The Chairman always encourages and provides opportunities to each shareholder to ask clarity from the Board and the Management Team.
The Notice of Meeting for the next Annual Meeting will be available on the website by June 2024.
(ii) Other Reports/Documents
Besides the Annual Meeting of the Shareholders, the SBMH Board caters for the diverse needs of its stakeholders by ensuring regular dialogues and engagement with its stakeholders through the publication of the following Reports/Documents which provide an insight of the financial and non-financial information about the conduct of the activities of the Group and the execution of its strategic endeavours.
a. Annual Report (2022, 2021, 2020)
b. Sustainability Report (2022, 2021, 2020)
c. Latest Communique
d. Annual Meeting Presentation (2023, 2022, 2021)
e. Investors’ Presentation
INTERNAL AUDIT
The Internal Audit function provides independent, objective assurance and consulting activity designed to add value and improve the Group’s operations. It helps the Group accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
• Internal Audit structure of the Group
*Note: The Group Internal Audit Function is being handled by SBM Bank (Mauritius) Ltd Internal Audit.
Further details are provided under Principle Seven of the Corporate Governance Report
• Qualifications of the Key members of the Internal Audit Team
Head of Internal Audit & Investigation |
BSc, MBA, FCCA, CFSA, CIA, CFE |
Audit Lead Credit Cluster |
FCCA, CIA, CFE |
Audit Lead Operations Cluster |
Post currently vacant. |
Audit Lead IT Audit Cluster |
B Eng, CISA, CDPSE |
Audit Lead Cluster Others |
BA, FCCA, CIA, CFE |
Officer-in-charge Investigation Cluster |
MSc Forensic Accounting, FCCA |