Corporate governance

GOVERNANCE FRAMEWORK

SBM Holdings Ltd (SBMH or the Company) operates within the best practices of good corporate governance appropriate to the Company. The Board of Directors of SBMH (the Board) believes that good corporate governance emanates from the application of the best and sound management practices and compliance with the in-country laws and regulations coupled with adherence to the highest standards of transparency, trust and business ethics.

The Board ensures that its governance framework is anchored on competent leadership, effective internal controls, strong risk culture, accountability to stakeholders and that major decisions taken are ethical, transparent and prudent. 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 Board Charter which sets out its functions, objectives, roles and responsibilities. The Board Charter is an extension of the Constitution of SBMH and should be read in conjunction therewith. It was reviewed during FY 2023, to keep abreast of developments in law, regulations and governance practices.

The Board Charter can be viewed on this link.
 

•    Accountability Statement

SBMH is headed by an effective and committed Board which oversees its business performance and affairs, while being also entrusted with the responsibility to lead, control and provide guidance to the Management Team to ensure its long-term sustainable success, reputation and governance. The Board, assisted by its specialised 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, with the objective of ensuring that all legal and regulatory requirements are fulfilled.
 

•    Statement of Compliance

The Statement of Compliance as per Section 75(3) of the Financial Reporting Act 2004 can be found in our Integrated Annual Report 2023 and is also accessible as per this link.
 

2.    BOARD COMMITTEES

The Board is supported by the below-listed 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 is responsible for the oversight of the Company's financial reporting and audit functions and also ensures that appropriate policies, processes and internal controls are in place for the prevention and identification of fraud. It is responsible for creating an environment that accommodates an open discussion in a culture of integrity, respect and transparency between Management and the External Auditors. It also oversees the audit reviews performed by the Internal and External Auditors and ascertains that the latter exercise their duties with professional scepticism.

Business Review Committee

Members
•    Mr Jean Paul Emmanuel Arouff (Chairperson)
•    Ms Shakilla Bibi Jhungeer
•    Dr Subhas Thecka

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 subsidiary operating entities from a financial, risk and strategy perspective.

Corporate Governance, Conduct Review & Sustainability Committee

Members
•    Ms Shakilla Bibi Jhungeer (Chairperson)
•    Mr Jean Paul Emmanuel Arouff
•    Dr Subhas Thecka

Role and Responsibilities
The Corporate Governance, Conduct Review & Sustainability Committee (CGCRS Committee) keeps abreast with the current environmental, social and governance trends to ensure that the Group develops and maintains a healthy and effective corporate governance framework, culture and stays compliant with the applicable legislations and best practices. It ensures that the Directors, Management and employees act in an ethical and responsible manner. It also bears the responsibility of handling any governance related breaches or issues as reported or highlighted during the year.  Additionally, it oversees and monitors progress of the implementation of the Group Sustainability Agenda.

Nomination & Remuneration Committee

Members
•    Mr Jean Paul Emmanuel Arouff (Chairperson)
•    Ms Shakilla Bibi Jhungeer
•    Mr Visvanaden Soondram

Role and Responsibilities
The Nomination & Remuneration Committee (‘REMCO’), having regard to applicable legislation and sound corporate governance, provides guidance and support to the Board in fulfilling its responsibilities to shareholders, employees and other stakeholders by ensuring that: (a) the right resources are onboarded, (b) the employees of the Company are appropriately and equitably compensated for their services to the Company and (c) the employees are motivated to perform to the best of their ability in the interests of all stakeholders. The REMCO assists the Board in overseeing the establishment of appropriate human resource strategies and policies of SBMH. In concert with the CGCRS Committee, it also formulates criteria to determine the expertise, qualifications and independence of Directors so that the composition of the Board and its Committees have the appropriate balance, diversity of experience and skills to operate in the best interests of the shareholders and more so, are adequately remunerated.

Projects Assessment Committee

Members
•    Ms Shakilla Bibi Jhungeer (Chairperson)
•    Mr Jean Paul Emmanuel Arouff
•    Ms Sharon Ramdenee

Role and responsibilities
The Projects Assessment Committee provides an oversight on strategic projects having an impact across the SBM Group’s operating entities. It oversees 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 Visvanaden Soondram
•    Dr Subhas Thecka

Role and responsibilities
The Risk Management Committee (RMC) assists the Board in fulfilling its corporate governance oversight responsibilities with regards to the identification, evaluation and mitigation of strategic, financial (credit, market and liquidity/funding), non-financial (operational, reputational, legal and compliance) and external environmental risks amongst others, facing the SBM Group. It reviews the Group’s overall risk appetite and makes recommendation to the Board. It also assists the Board in establishing a sound risk management framework, including policies, processes and practices geared towards managing the risks faced by the Group.

Strategy Committee

Members
•    Mr Abdul Sattar Adam Ali Mamode Hajee Abdoula (Chairperson)
•    Mr Raoul Claude Nicolas Gufflet
•    Ms Sharon Ramdenee

Role and responsibilities
The Strategy Committee is responsible to (i) review, validate and recommend the Group strategic plan to the Board, (ii) monitor and appraise the progress made with respect to the execution of selected strategic initiatives at the Group and entity levels, (iii) discuss and recommend strategic endeavours that are likely to have a meaningful impact on the Group’s positioning and performance and (iv) assess the operating environment in which the Group is operating.

3.    MANAGEMENT COMMITTEE

Group Executive Committee

The SBMH Board established the Group Executive Committee (Group ExCo), under the leadership of the Group Chief Executive Officer (Group CEO) and having as members, the: (i) Group Chief Investment Officer, (ii) Chief Financial Management Officer of SBM Bank (Mauritius) Ltd, (iii) Group Chief Operations and Transformation Officer, (iv) Group Chief Risk & Compliance Officer, (v) Group Chief Strategy Officer, (vi) Group Chief Sustainability Officer and (vii) Group Chief Financial Officer. The Group ExCo assists to: (a) implement the Group’s strategy, operational plans, policies, procedures and budgets, (b) provide support to the entities, (c) assess and manage risks and (d) improve synergy and alignment across the Group.

Group Functional Forums

Group Functional Forums have been established at the Management level of SBM Holdings Ltd to continuously ensure adequate oversight, effective control, solidify the governance principles and improve synergy across all entities of the Group. The Group Functional Forums, as depicted in the table below, discharge their responsibilities as defined in their respective TORs, which are reviewed annually and approved by the Group CEO in his capacity as Chairperson of the Group ExCo and as mandated by the SBMH Board.

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
•    Company Secretary

Both 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, while nurturing a culture in which the Board works harmoniously for the long-term benefit of the Company and all its stakeholders. In line with good governance practice, there is a clear and effective division of accountability and responsibility between the Chairman and the Group CEO. Each plays a distinctive role but complementing each other 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 2023 and can be accessible by clicking here.

The biography of the Company Secretary could be accessible on this link.

DIRECTOR NOMINATION AND APPOINTMENT PROCESS

All appointments are made on a 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. Appointment of Directors at SBMH is subject to a pre-determined formal, rigorous and transparent process implemented by the Board, supported by the CGCRS Committee and the REMCO, which are also responsible for reviewing the composition of the Board and its Committees and for assessing whether the right balance of skills, experience, knowledge and diversity is appropriate to operate effectively. The appropriate recommendations are then made to the Board of SBMH.

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, the Code and other applicable legislations and guidelines, in terms of the board balance. Moreover, when appointing new Directors, the Board carefully considers the needs and strategy of the Company and several components such as, but not limited to, previous experiences, independence and conflict of interest.

In line with the SBMH Constitution, all Directors are elected/re-elected on the Board by way of separate resolutions by the shareholders at the Annual Meeting of Shareholders (Annual Meeting) and hold office until the next Annual Meeting.

The Directors’ selection and appointment process is detailed under Principle Three of the Corporate Governance Report and is depicted 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 recognises the importance of identifying its stakeholders and is committed to continually strengthening its relationship with all of them by responding to their needs and expectations. On a regular basis, SBMH upholds clear, balanced, meaningful and transparent communications with them, through multiple communication channels such as the Annual Reports, Shareholders’ Meetings, Website, Social Medias, Communiqués, amongst others, to facilitate their understanding of the Group’s performance, its prospects and the market environment in which it operates. The stakeholders of the SBM Group are usually involved with respect to matters pertaining to the organisational position, performance of the Group and the outlook.

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 is available on the website on the following link.

The voting results for the 14^th Annual Meeting of the Shareholders can be viewed here.
 

(ii) Other Reports/Documents

Besides the Annual Meeting, 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.    Integrated Annual Report (2023)
b.    Previous Annual Reports (2022, 2021, 2020)
c.    Previous Sustainability Reports (2022, 2021, 2020)*
d.    Latest Communique
e.    Annual Meeting Presentation (2024, 2023, 2022)
f.    Investors’ Presentation

* As from its FY 2023, the Company has adopted the Integrated Reporting Framework and hence, the Sustainability Report has been included in the Integrated Annual Report 2023.

INTERNAL AUDIT 

The Internal Audit (IA) function provides independent, objective assurance and consulting activity designed to add value and improve the Group’s operations. It helps the SBM Group to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.

•    IA 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

* The Senior Officer – Investigation Cluster has been leading the Investigation Cluster at SBM Bank (Mauritius) Ltd since 2023.