Policy and its Implementation
5. Independency
a. The President Director should be independent from the Bank’s ultimate shareholders.
b. Have and/or appoint at least 1 (one) Independent Director.
Aspects of Diversity of Members of the Board of Commissioners
Citizenship Consists of:
1. 4 (four) members of the Board of Commissioners are Indonesian citizens.
2. 2 (two) members of the Board of Commissioners are Malaysian citizens.
3. 1 (one) member of the Board of Commissioners are United States citizen.
Education The education level of the members of the Board of Commissioners covers the Bachelor and Post- graduate levels with various fields of education such as economics, management, and political science & psychology.
Work experience Various work experience, including:
Minister/Head of Bappenas, Chairperson of the Investment Panel Risk Committee, ASEAN Regional Strategy Group and ASEAN Regional Business Council, Advisory Board of the International Blavatnik School of Government, University of Oxford, Expert Staff of the Bank Indonesia Board of Governors and other important positions at Bank Indonesia, Board of Commissioners and/or Directors of national and multinational financial and non-financial institutions. Leading college lecturers and deans both at home and abroad and the Chief Risk Officer of a multinational bank.
Independency All members of the Board of Commissioners have no affiliation with fellow members of the Board of Commissioners, Directors, and Ultimate Shareholders of the Bank. There are 4 (four) Independent Commissioners.
Age The age diversity of members of the Board of Commissioners is in a fairly productive and mature ages, namely 45 years old - 71 years old.
Gender There are 1 (one) female member of the Board of Commissioners.
Aspects of Diversity of Members of the Board of Directors
Citizenship Consists of:
1. 10 (ten) members of the Board of Directors who are Indonesian citizens.
2. 1 (one) member of the Board of Directors who is Malaysian citizen.
Education The level of education includes Bachelor and Post-graduate levels with various fields of education such as economics, finance, law, Bachelor of Commerce, business, computer science, accounting, and others.
Work experience Various work experience, including:
1. Member of the Board of Directors of national and multinational financial and non-financial institutions.
2. Various important positions in national banks and foreign banks, such as Head of Strategic Business Development, Senior Country Operations Officers, Head of Corporate Banking, Head of Operations Risk, Head of Trading & Structuring, Head of Treasury, Head of Network, Chief of Shariah Banking, and others.
3. Independent Commissioner of the insurance company.
4. Founder and Senior Partner Law Firm.
5. Auditor.
All members of the Board of Directors have work experience in the banking sector.
Independency All members of the Board of Directors have no affiliation with fellow members of the Board of Directors, Board of Commissioners and Ultimate Shareholders of the Bank.
Age The age diversity of members of the Board of Directors is in a fairly productive and mature ages, which is 47 years old - 61 years old.
Gender There are 6 (six) female Directors, out of a total of 11 (eleven) members of the Board of Directors.
COMPOSITION DIVERSITY POLICY FOR THE BOARD OF COMMISSIONERS AND THE BOARD OF DIRECTORS ACHIEVEMENT
The current composition of the Board of Commissioners and the Board of Directors has fulfilled the diversity aspects mentioned above and is aligned with the Bank’s strategy, Vision and Mission.
Diversity Policy on Composition of The Board of Commissioners and
The Board of Directors and Its Implementation
Gender of Board of Commissioners
(%)
85.7 14.3
Female Male
Age of Board of Directors
(%)
55 45
56 - 65 Years 45 - 55 Years
Age of Board of Commissioners
(%)
12.5 25
50
66 - 75 Years 45 - 55 Years 56 - 65 Years
Gender of Board of Directors
(%)
45 55
Female Male
Independency of Board of Commissioners
(%)
43 57
Independent Commissioner Non-Independent Commissioner Indonesia Malaysia USA
Citizenship of Board of Commissioners and Board of Directors
(person)
Education of Board of Commisioners and Board of Directors
(person) 14
Undergraduate 5
3
Graduate 12
1
Postgraduate 1
Expertise of Board of Commissioners &
Board of Directors
(person)
1
7 1
2 1
1 1
1 3
Medical Computer Science Accounting Management Economy Risk Management Business Political Science
Law
Diversity Policy Composition of The Board of Commissioners and
The Board of Directors and Its Implementation
CIMB Niaga established and implemented a Risk- Based Remuneration policy No. A.06.02 in October 2017, which was adjusted on 1 December 2018 by adding Sharia principles. The Bank is committed to implementing a competitive, fair, and balanced risk-based remuneration system. Furthermore, the Bank always ensures that no individual receives compensation below the provisions set by the Government.
OBJECTIVES AND BACKGROUND
In line with the prevailing laws and regulations, CIMB Niaga has implemented remuneration policies for the Board of Commissioners, Board of Directors and employees, both mandatory and additional.
The remuneration policy is an important aspect for attracting, motivating and retaining the best employees to create qualified human resources. The remuneration policy takes into account the Bank’s capability, and is always based on the principles of competitiveness, fairness and risk-based, and is in line with the direction and policies of OJK. The policy was also prepared after considering various factors including, short-term and long-term liquidity requirements, capital adequacy and strength, financial stability, effectiveness in risk management, as well as potential future revenue.
The Bank did not use external consultants to prepare its remuneration policy. However, to maintain competitiveness, the Bank performed benchmarking through independent party surveys.
RISK-BASED REMUNERATION POLICY
Improvements to the remuneration strategy involved reviewing remuneration policies based on performance, risk, and empowerment, and CIMB Niaga’s policies and procedures for implementing its benefit programs, as part of the remuneration strategy, took into account the risk profile. The main risks type in the remuneration policy were adjusted in line with the annual Bank’s risk profile assessment results, after looking into the market conditions, industry developments, performance and financial capabilities
of the Bank. As a result, the risk profile was the main influence for implementing a variable remuneration.
The Bank’s remuneration policy covers and applies to employees in business, operational and supporting functions and is in accordance with POJK No. 45/
POJK.03/2015 dated 23 December 2015, and SEOJK No.
40/SEOJK.03/2016 dated 26 September 2016, and also POJK No. 59/POJK.03/2017 dated 18 December 2017 concerning the Implementation of Governance when Providing Remuneration in Commercial Banks and Sharia Business Units, whereby this policy regulates:
1. The prudential principles in providing risk-based remuneration.
2. The application of variable remuneration is in accordance with the regulatory provisions regarding the implementation of remuneration in Commercial Banks and Sharia Business Units.
DETERMINATION OF REMUNERATION BASED ON PERFORMANCE AND RISK
The Bank established performance appraisals using the Key Performance Indicators (KPI) approach. The KPI were prepared based on Bank’s performance targets, related unit performance targets, and individual performance targets, in line with the Bank’s goals and strategies and considered risk and compliance aspects. The Bank conducted periodic evaluations and assessments of performance achievements, and these were taken into consideration when determining the remuneration. The Bank also implemented risk-based remuneration with the establishment of Material Risk Takers (MRT) and also implemented a deferred payment scheme.
REMUNERATION POLICY IMPLEMENTATION ASSESSMENT AND INDEPENDENCE
CIMB Niaga reviews the employees’ remuneration and benefits system periodically and continuously, taking into account the following aspects:
1. Bank’s financial performance and condition
2. Employee’s competency and performance (meritocracy)
3. Remuneration practices that apply in the market (market competitiveness)
4. Principles of eligibility and appropriateness in accordance with position
5. Internal equality
6. Risk level attached to the position 7. Bank’s long-term strategy
CIMB Niaga is committed to implementing a remuneration system that is dynamic, responsive, competitive, fair and balanced, and risk-based, as well as based on applicable laws and regulations.
To ensure the independence of remuneration for all employees, including employees in the control unit, the Bank ensures that performance evaluations and remuneration determination are conducted through supervision and review up to the Nomination and Remuneration Committee.
The Bank periodically reviews and communicates its Wages and Wage Scale Structure in accordance with the Minister of Manpower Regulation No. 1 Year 2017 concerning Wages Structure and Scale. In addition, the Bank implemented remuneration policies by taking
into account POJK No. 45/POJK.03/2015 and SEOJK No. 40/SEOJK.03/2016 concerning the Implementation of Governance when Providing Remuneration in Commercial Banks.
DETERMINATION OF MATERIAL RISK TAKER
Determination of Material Risk Taker (MRT) is categorized as follows:
1. The MRT is determined by using qualitative methods in accordance with the portion of responsibilities that affects the main risk profile as determined based in the Bank’s annual risk profile evaluation.
2. The MRT is also determined quantitatively through a comparison of variable remuneration between MRT and non-MRT employees after considering the performance and risk level for the position concerned.
The parties determined as MRT include all members of the Board of Directors and/or employees who meet the definitions, and currently the Bank has 15 (fifteen) individuals classified as MRT.
BOARD OF COMMISSIONERS’ REMUNERATION
Procedure for Determining the Board of Commissioners’ Remuneration
Board of Commissioners
Remuneration of Board of Commissioners GMS
Nomination &
Remuneration Committee
Board of Commissioners
Proposed to GMS Implemented
by the Board of Directors GMS decided
The Nomination and Remuneration Committee submit recommendations and proposals to the Board
of Commissioners
The Bank prepares the structure, policies, and amount of remuneration for each member of the Board of Commissioners after taking into account their duties, authorities, performance, and responsibilities. In addition, the Bank also considers the remuneration applicable in the banking industry (peers group) and the Bank’s capabilities.
Remuneration Policy
The procedures to determine the remuneration for Board of Commissioners are as follows:
1. The Nomination and Remuneration Committee conducts discussions regarding the Board of Commissioners’ remuneration after taking into account information on the range and remuneration standards with similar industries (peers group) and the Bank’s capabilities;
2. The Committee provides recommendations for further discussion at the Board of Commissioners’
meeting;
3. The Board of Commissioners studies the recommendation from the Nomination &
Remuneration Committee and proposes to the General Meeting of Shareholders (GMS); and
4. The GMS determines the remuneration for the Board of Commissioners, to be further implemented by the Board of Directors.
BOARD OF COMMISSIONERS’ REMUNERATION STRUCTURE
The remuneration structure for Board of Commissioners consists of an honorarium, meeting allowances, transportation allowances, feast day allowances, year-end benefits, as well as other facilities such as medical, communication, and club membership. Based on the decision at the 2018 AGM, detailed information for members of CIMB Niaga’s Board of Commissioners’ remuneration and other facilities is as follows: