Corporate Governance

Corporate Governance Practices

The Bank, which belongs to Fubon Financial Holding Co., Ltd. (“the Group”), which is highly esteemed for its corporate governance, and regards corporate governance as an essential discipline for its operations and businesses. Thus, the Bank has in place an effective framework which is consistent with the principles and best practices in corporate governance as set forth in the guideline on “Corporate Governance of Locally Incorporated Authorized Institutions” under section 7(3) of the Banking Ordinance applicable to all locally incorporated Authorized Institutions (AIs) which the Hong Kong Monetary Authority (“HKMA”) expects the AIs to adopt in respect of their corporate governance guidelines.

From time to time, the Bank will review its corporate governance practices to ensure that they are consistent with the latest requirements of international and local corporate governance best practices.

Besides, the Code of Ethical Conduct of the holding company, Fubon Financial Holding Co., Ltd., is also applicable to the Bank.

Board of Directors

In meeting its overall responsibilities to shareholders, depositors, creditors, employees and other stakeholders, the Board has to ensure that there is a competent executive management capable of running the Bank in a sound, efficient and profitable manner.

The responsibilities of the Board include:

Establishing the business objectives of the Bank and approving and reviewing the corresponding business strategies and plans (including annual budgets);
Ensuring that the operations of the Bank are conducted prudently within the laws and regulations of the Hong Kong Special Administrative Region, and as such, reviews and approves policies, codes of conduct and systems of the Bank as and when it is necessary and appropriate;
Ensuring that the Bank observes a high standard of integrity in the conduct of its businesses and complies with all applicable laws and regulatory guidelines issued by the HKMA, the Securities and Futures Commission, and other relevant regulatory authorities;
Establishing, approving and reviewing risk management strategies and policies of the Bank to ensure that the various types of risk inherent in the Bank’s operations and businesses (including credit, market, interest rate, liquidity, operational, reputation, legal and strategic) are regularly identified, measured, monitored and controlled;
Overseeing the business of the Bank and managing the Bank by delegating duties and responsibilities to the Chief Executive Officer or through the appointment of Directors to specialized Board committees with all decisions and approvals being reported to the Board regularly.

Audit Committee

The Audit Committee comprises four members including one Non-Executive Director and three Independent Non-Executive Directors. The Audit Committee is chaired by an Independent Non-Executive Director who has appropriate accounting professional qualifications. The Committee meets at least four times a year and additionally when deemed necessary.

The Audit Committee is required to ensure that there is adequate supervision of the Bank’s financial reporting processes and systems of internal control, and that the internal audit function is effective and backed by adequate resources and has appropriate standing within the Bank. It is also required to ensure that there is coordination between the internal and external auditors, to monitor compliance with internal policies and statutory regulations, and to consider recommendations made by the internal and external auditors.

The Audit Committee reviews the Bank’s financial reporting process, the systems of internal control, the internal audit function, and the risk management process. In particular, the review undertaken by the Audit Committee on the internal audit function includes the Internal Audit Charter and its approval, the annual audit plan, internal audit reports, and special investigation reports. It also ensures that appropriate management actions are taken following the major audit findings.

In addition, the Audit Committee reviews the appointment of external auditors and discusses with them the nature and scope of their audits. The Audit Committee also reviews the interim and annual financial statements before recommending them to the Board for approval.

Composition of the Audit Committee

Elizabeth Lam Tyng Yih (Chairman)

Jerry Harn Wey Ting

Peter Pang Sing Tong

John Keith Ball

Audit Committee - Terms of Reference

Nomination and Remuneration Committee

The Nomination and Remuneration Committee is chaired by an Independent Non-Executive Director and comprises the Non-Executive Chairman, Non-Executive Vice Chairman and all the Independent Non-Executive Directors of the Bank. The Committee meets periodically and as required and provides oversight of the management of the Bank’s human resources function including the appointment of Directors (both Executive and Non-Executive), senior management, and Management Committee Members. The Committee approves the Bank’s overall human resources management framework to ensure that the Bank is in compliance with the applicable government regulations and follows the market best practices wherever feasible. The Committee is also responsible for ensuring that Directors, the Chief Executive Officer, and Management Committee Members possess the necessary and appropriate qualifications to perform and discharge their duties.

The Committee regularly reviews whether each existing Director continues to remain qualified for his/her post. It also reviews the structure, size and composition of the Board and makes recommendations on any proposed change to the Board.

The Committee reviews and approves the remuneration for Directors, members of Board Committees, senior management, and Key Personnel (as defined under the Remuneration Policy of the Bank).

The Committee is mandated to assist the Board in establishing cultural and behavioural standards that promote prudent risk-taking and fair treatment of customers and employees. It advises and assists the Board in discharging its responsibilities for the Bank’s culture-related matters.

Composition of the Nomination and Remuneration Committee

John Keith Ball (Chairman)

Daniel Tsai Ming Chung

Richard Tsai Ming Hsing

Elizabeth Lam Tyng Yih

Peter Pang Sing Tong

Nomination and Remuneration Committee - Terms of Reference

Risk Committee

The Risk Committee is composed of five members including one Executive Director, one Non-Executive Director and three Independent Non-Executive Directors. The Risk Committee is chaired by an Independent Non-Executive Director who has extensive banking experience. The Committee meets at least four times a year and additionally when deemed necessary. Its mandate is to establish the Bank’s overall risk appetite and to ensure a proper risk management framework is in place. The Committee also oversees senior management’s implementation of the Bank’s risk policies.

The Risk Committee reviews and endorses the Bank’s risk appetite statement and risk management strategies on an annual basis. It also reviews and approves the Bank’s Environment, Social and Governance (“ESG”) Strategy and ESG Plan on an annual basis. The committee oversees the establishment and maintenance by senior management of appropriate infrastructure, resources and systems for risk management, particularly in relation to compliance with relevant legal and regulatory requirements, adherence to the approved risk appetite and related policies, and the adoption of best practices wherever feasible.

The Risk Committee is required to ensure that the staff responsible for implementing risk management systems and controls are sufficiently independent of the risk-taking units in the Bank.

Composition of the Risk Committee

Peter Pang Sing Tong (Chairman)

Elizabeth Lam Tyng Yih

Jerry Harn Wey Ting

John Keith Ball

Simon Chung Kwok Keung

Risk Committee - Terms of Reference

Executive Committee

The Executive Committee comprises the Non-Executive Chairman, Non-Executive Vice Chairman and the Executive Director of the Bank. It exercises the powers and authorities delegated by the Board from time to time concerning the management and day-to-day running of the Bank. The Executive Committee meets periodically and as required and operates as a general management function under the auspices of the Board.

Composition of the Executive Committee

Daniel Tsai Ming Chung (Chairman)

Richard Tsai Ming Hsing

Simon Chung Kwok Keung

Executive Committee - Terms of Reference

Executive Credit Committee

Executive Credit CommitteeThe Executive Credit Committee comprises the Non-Executive Chairman, one Non-Executive Director and the Executive Director of the Bank. It has the delegated authority to approve credit proposals, credit policies and other credit-related matters which require the approval of the Board. The Executive Credit Committee meets regularly and as required.

Composition of the Executive Credit Committee

Daniel Tsai Ming Chung (Chairman)

Peter Pang Sing Tong

Simon Chung Kwok Keung

Executive Credit Committee - Terms of Reference