In Bank Asia, corporate governance means increasing the stakeholders value by being efficient

& professional to the organization, transparent and accountable to the shareholders and
responsible to the society and the environment. The board of directors plays a key role in
corporate governance. It is their responsibility to endorse the organizations strategy, develop
directional policy, appoint and supervise senior executives and to ensure accountability of the
organization to its owners and regulatory authorities. This enables the banks to undertake, in an
effective manner, the prudent risk-taking activities which are the basis of its business. Bank Asia
Limited, as a publicly listed company, is a highly regulated company where Bangladesh Bank,
Bangladesh Securities and Exchange Commission (BSEC) play a very significant role in
establishment and adherence to norms and regulations.

4.1 BOARD OF DIRECTORS

Composition of the Board: Directors are accountable to the shareholders for the banks
performance and governance. Bank Asia always complies with the direction of the regulatory
authorities regarding the appointment of directors. Bangladesh Bank circulars, BSEC
notification, Bank Company Act and Company Act are strictly followed. The Constitution
provides that there will be a minimum of one-fifth Independent Directors of the board and
maximum 20and minimum 5 Directors on the Board. The Board currently comprises of 16
Directors as of December 31, 2014 including the Managing Director. The Chairman and 13 other
Directors are Non-Executive Directors from which 4 are independent directors and only the CEO
(Managing Director) is an Executive Director. The Chairman has been independent to CEO. All
the Directors except independent directors & CEO were elected by the shareholders of the
company & CEO is selected by the board of directors with the approval of the Bangladesh Bank.
Independent directors are appointed by the board and approved by the shareholders in the AGM.
All the Directors are well qualified, experienced professionals and add tremendous value to the
overall management capability. Most of the Directors are successful businessmen in their own
right with long experience in banking industry and they also hold very responsible positions in
public life. The details qualifications about board of directors can be found in Directors profile

Board of Directors Selection Mechanism and Independence: Bank Asia complied with
relevant guidelines of Bangladesh Bank and other rules and regulations of the Bank Companies
Act, 1991 Bangladesh Securities and Exchange Commission while forming its board of directors.
While appointing new directors Bank Asia assesses the size & formation of the board and mix of
knowledge, skills, condition, experience legal proceedings and perception. The directors are
elected by the shareholders in AGM. In case of nomination, removal, causal vacancy, deposit
directors & alternate Directors, Bank Asia follows all relevant rules and regulations day to day
business of the bank. The Banks Non-Executive corporate governance 153 www.bankasia-
bd.com annual integrated report 2014 Directors are independent of management and free from
day to day business of the bank

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Independent director: As part of good governance in the organization participation of
independent opinion in the Board is considered as an important instrument. Independent
directors in the Board exert an independent view on the policies and decisions of the Board and
ensure that the policies and decisions are for the best interest of the whole bank. Bank Asia has
appointed 4 (four) independent directors in the Board. They are Mr. A M Nurul Islam, a
renowned bureaucrat and three renowned retired bankers Mr. Mohammed Lakiot ullah, Mr. Shah
Md. Nurul Alam and Mr. Mashiur Rahman. The Independent Directors are also member of the
sub-committees of the Board. One of them is the members of the Executive Committee, two of
them are the members of the Audit Committee where one is acting as chairman of audit
committee and three of them are the members of the Risk Management Committee.

Delegation of Authority: The Board has delegated to the CEO and, through the CEO, to other
senior executives, responsibility for the day-to-day management of the banks business and
implementation of the banks strategy and policy initiatives. The CEO and other senior
executives operate in accordance with a comprehensive set of management delegations under the
banks Delegation of Authorities framework.

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4.2 BOARDS OWN STRUCTURE AND PRACTICE
The board structure is maintained in terms of leadership, size and the use of committees so as to
effectively carry out its oversight role and other responsibilities. This includes ensuring that the
board has the time and means to cover all necessary subjects in sufficient depth and have a
robust discussion of issues. The board continuously maintaining and periodically updating
organizational rules, by-laws, or other similar documents setting out its organization, rights,
responsibilities and key activities. To support its own performance, the board carry out regular
assessments alone or with the assistance of external experts of the board as a whole, its
committees and individual board members.

Chairman of the Board; Roles & Responsibilities: The Chairman of the Board is elected to the
office of chairman by the directors. The Chairmans primary responsibility is to lead the Board,
to ensure a
common purpose, effectiveness as a group and at individual Director Level and that it upholds
and promotes high standards of integrity, probity and corporate governance. The Chairman has
the link between the Board and the Company.

Roles and Responsibilities:

Appropriate Accounting Standards, Policy and regulatory compliance

Overseeing the financial reporting process

Accounting policy & procedures

Reviewing significant related party transactions

Going concern assumption

Checking the financial statements completeness and concreteness

Reviewing the financial statements prepared in according to existing rules & regulations
and standards enforced in the country and as per relevant prescribed accounting standards
set by Bangladesh Bank

Discussing with management and the external auditors to review the financial statements

before submission to the Board for approval.
Dealing with Significant changes of accounting policies and practices

Reviewing the content and accounts to advise the Board for the understandable and fair

presentation of the annual report
Quarterly & Half yearly review of the financial statements

Financial Reporting:

Review the annual financial statements and determine whether they are complete and
consistent with the accounting standards set by the regulatory authority

Meet with management and the external auditors to review the financial statements
before their finalization
Other Responsibilities:

Submit compliance report to the Board on quarterly basis on regularization of the
omission, fraud and forgeries and other irregularities detected by the internal and external

auditors and inspectors of regulatory authorities
Perform other oversight functions as desired by the Board of Directors and evaluate the
committees own performance on a regular basis.

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4.3 EXECUTIVE COMMITTEE

The Executive Committee (EC) of the Board of Bank Asia was first constituted in January 2010
to ensure efficient, competent, compliant and secured structure for approval of credit proposals
and business decisions. The number of members in executive committee is 7 (seven) nominated
by the Board from directors. The EC time to time reviews policies and guidelines issued by
Bangladesh Bank regarding credit and other operations that are customized and adopted by the
management after approval of the Board of directors. EC approves credit proposals as per
approved policy of the Board.

4.4 RISK MANAGEMENT COMMITTEE

To minimize risk while implementing the policies and business plan of the Bank, the Board has
formed a Risk Management Committee as per the guidelines of Bangladesh Bank. The
Committee will supervise whether the risks arise from credit, foreign exchange, internal control
and compliance, money laundering, information technology, operation, interest rate, liquidity
and other sources are identified, and measured and adequate systems are in place to minimize
such risks. Currently 5 (five) members are in the Risk Management Committee. They set risk
appetite; formulate risk identification & control policy, deciding on recommended changes to the
risk management framework and internal capital adequacy assessment process and monitoring
the operation and effectiveness of the risk management framework, policies and standards. The
Risk Committee assists the Board in relation to the oversight of risk including the risk appetite
and risk management strategy

4.5 CORPORATE GOVERNANCE TRAINING AND ITS OBJECTIVES

Bank Asia is very serious about Corporate Governance. For this purpose, high quality
training was arranged regarding this matter. A daylong workshop on Corporate Governance was
organized to create a strong risk management culture on October 18, 2014 where our senior
management participated. Among them, Mr. A Rouf Chowdhury, Chairman of Bank Asia; Md.
Mehmood Hussain, President and Managing Director; Vice Chairmen Mr. A M Nurul Islam, Mr.
Mohammed Lakiotullah, Directors of the company Mr. Mashiur Rahman, Mr. Rumee A
Hossain, Mr. Shah Md. Nurul Alam, Mr. Mohd. Safwan Choudhury; Deputy Managing Directors
and Head of other departments were present. Board of Directors and Senior Management
participated at an exclusive workshop on Corporate Governance conducted by IFC Corporate
governance training offers tangible benefits for Board directors committed to playing a key role
in guiding their companys success. Governance training puts one in touch with the latest best
practice research and offers evaluation of best practice Boards. Therefore, the main objective of
these training programs is:

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To help to identify Boards route to success. This includes strategic appointment to

leverage Board member competencies as well as effective structures and processes.
To determine the best practices suited to your organization through structured

assessment.
To develop broad-spectrum insights into best practices to understand how they improve
coherence in business direction and strategy, drive corporate responsibility, and improve

company accountability for stakeholder confidence
To shed light on Board-specific strategies to mitigate risk and maximize opportunities by
paving the skills, tools and frameworks for action plans to address challenges and boost

Boards performance.
To help the Board members develop the right strategies for change management and
create advance plans for seamless change in order to identify internal and external

opportunities and challenges, manage change or implement new approaches.
To drive positive Board culture such as skills and leadership style.
4.6 REMUNERATION

Bank Asia compensation program focuses on individual short-term goals vis--vis long-term
success and overall profitability of the Bank. Both our short-term annual incentive and long-term
compensation plans promote our pay-for-performance philosophy, as well as our goal of having
a meaningful amount of pay at-risk, and we believe both plans provide them a competitive
advantage in talent acquiring and retaining. A summary of Short-term and Long-term
compensation plan are given below:

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4.7 RELATION AND COMMUNICATION WITH THE SHAREHOLDERS AND
OTHER STAKEHOLDERS

While maintaining investors relation proper communication and equitable treatment of every
shareholder are given the highest priority by Bank Asia. Bank Asia always share information to
the concern party and publish integrated operational and financial output and takes initiative to
enrich the ability of future assessment of bank of shareholders. Bank always provides quarterly
and half-annually financial statements and Annual Report to provide balanced and clear
assessment of its performance. Bank Asia also provides copies of annual report to the related
regulatory parties and it can also be found on Bank Asia website www. Bankasia-bd.com with
other related information.

4.8 SHARE HOLDING STRUCTURE

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