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Corporate Governance

Company’s Corporate Governance Philosophy

Corporate governance refers to the manner in which a corporation is governed, directed and managed. Corporate governance essentially involves balancing interest of all the stakeholders, Board of Directors, management team, employees, customers, suppliers, financial advisors, bankers, government and the community. Sound corporate governance rests on basic principles of transparency, accountability, integrity, reliability, independence and security. Corporate governance facilitates effective, entrepreneurial and prudent management which can deliver sustainable business results over a long term. Good corporate governance creates a mechanism of checks and balances to ensure that the decision-making powers vested in the executive management are used with care and responsibility to meet stakeholders’ aspiration and societal expectations.

We at Nepal Life, continuously strive to adopt and implement the best in class governance practices. Responsible corporate conduct is integral to the way we do our business. Our action are governed by our values and principles, which are reinforced at all high levels within the Company. The Company’s governance framework enjoins the highest standard of ethical and responsible conduct of business to create values for all the stakeholders. We firmly believe, that for our continued success, we will need to adhere to highest standard of corporate behavior towards every stakeholder and the society at large. Over the years, we have strengthened our governance practices, and it is our endeavor to achieve the best in class governance standards benchmarked globally.

Corporate Governance Guidelines

 

The Board of Directors (‘the Board’) has adopted the Beema Samiti Guidelines on Board Effectiveness to help fulfil its corporate governance responsibility towards its stakeholders. These guidelines provide for the composition and role of the Board and ensure that the Board will have the necessary authority and processes in place to review and evaluate the Company’s operations.

Board of Directors

The Board of Director is the primary stakeholder influencing corporate governance. An active, well informed and independent board safeguard and maintains sound corporate governance across all the functions. The Board oversees how the management safeguards interest of all the stakeholders. The Board of Director is entrusted with the ultimate responsibility of the management, general affairs, direction and performance of the company and has been vested with requisite powers, authorities and duties. The Board of Director provide a long term vision and policy approach which improves the quality of governance. It sets out the overall corporate objectives and provides direction and independence to the management to achieve these objectives for value creation through sustainable profitable growth.

Size and Composition of the Board

Our policy is to have an appropriate mix directors (Non Executive & Independent) with adequate skills and knowledge in various fields like trade commerce, insurance industry, legal, government affairs, human resource management. As on Asad 32, 2077, the Board comprised of seven members, six NEDs and one IDs, including a Woman Director. The Board periodically evaluates the need for change in its composition and size. Detailed profile of our Directors is available on our website www.nepallife.com. The list of directors is as follows:-

Table A: List of Directors with designation and expertise

S.No

Name of Director

Designation

1

Mr. Govind Lal Sanghai

Chairman

2

Mr. Kamlesh Kr Agrawal

Independent Director

3

Mr. Ram Awatar Agrawal

Non-Executive Director

4

Mr. Vivek Agrawal

Non-Executive Director

5

Mr. Prakash Mundara

Non-Executive Director

6

Mr. Bimal Prasad Dhakal

Non-Executive Director

7

Mrs. Parul Dhakal

Non-Executive Director

 

Key Board Qualifications, Expertise and Attributes

The Directors are committed to ensuring that the Board is in compliance with the highest standards of Corporate Governance. The table below summarizes the key qualifications, skills and attributes which are taken into consideration by the NRC while recommending appointment of Directors to the Board.

Table B: Director qualifications, skills, expertise, competencies and attributes desirable in Company’s business and sector in which it functions

Skills & Attributes

Description

Alignment with Company culture and value system

Exhibit high levels of integrity and be appreciative of the core values of the Company

Experience in managing large corporations

Experience in leading and managing large corporations and have an understanding of the business environment, complex business processes, strategic planning, risk management, etc.

Understanding of industry and operations

Experience and knowledge of the functioning, operations, growth drivers, business environment and changing trends in the insurance industry

Understanding of trade & Commerce

Experience in financial management of large corporations with understanding of capital allocation & funding and financial reporting processes

Knowledge of Human Resource Management

Understanding of emerging trends in human resource management that may have an impact on the current business and have the ability to guide future development in career development.

Knowledge of Governance and Law

Understanding of the legal ecosystem within which the Company operates and possess knowledge on matters of regulatory compliance, governance, internal controls. Experience in policy advocacy at national and international level

 

Board Committees

The committees of Board include Audit Committee, Risk Management and Investment Committee, Human Resource Committee, Strategic Planning Committee. These committees assist the Board in discharging its specific function in which more focused and extensive discussions are required.

The role, composition and other details of the aforesaid committees are given below:

Audit Committee

The primary objective of the Audit Committee is to monitor and provide an effective supervision of the Management’s financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity, and quality of financial reporting. The Committee oversees the work carried out in the financial reporting process by the Management, the internal auditor, the statutory auditor and the cost auditor and notes the processes and safeguards employed by each of them. The Committee further

Risk Management & Investment Committee

Risk Management is crucial to achieve the company’s objective in strengthening its financial position, safeguarding interests of stakeholders, enhancing its ability to continue as a going concern and maintain a consistent sustainable growth. The Company has constituted a Risk Management Committee (‘RMC’) for framing, implementing, and monitoring the risk management policy of the Company. The Committee assists the Board in fulfilling its oversight responsibility with respect to Enterprise Risk Management (‘ERM’). The terms of reference of the RMC are: a) Overseeing key risks, including strategic, financial, operational, IT (including cyber security) and compliance risks. b) Assisting the Board in framing, implementing and monitoring the risk management plan for the Company and reviewing and guiding the Risk Policy. c) Developing risk management policy and risk management system/framework for the Company. The Board has adopted a Charter for RMC Committee on May 20, 2015. 3 meetings of the Committee were held during the year ended March 31, 2019 on May 15, 2018, August 13, 2018 and November 13, 2018.

Human Resource Committee

The purpose of the Human Resource Committee (‘HRC’) is to oversee the Company’s nomination process including succession planning for the senior management and the Board and specifically to assist the Board in identifying, screening and reviewing individuals qualified to serve as Executive Directors, Non-Executive Directors and Independent Directors consistent with the criteria as stated by the Board in its Policy on Appointment and Removal of Directors.

The NRC also discharges the Board’s responsibilities relating to compensation of the Company’s Executive Directors and Senior Management. The Committee has formulated Remuneration Policy for Directors, KMPs and all other employees of the Company.

The remuneration policy and the criteria for making payments to Non-Executive Directors is available on our website www.nepallife.com The Committee has the overall responsibility of approving and evaluating the compensation plans, policies and programmes for Executive Directors and the Senior Management. The Committee reviews and recommends to the Board, the base salary, incentives/commission, other benefits, compensation, or arrangements for the Executive Directors for its approval. The Committee coordinates and oversees the annual self-evaluation of the performance of the Board, Committees and of individual Directors.

Strategic Planning Committee

The Committee’s primary purpose is to review and evaluate the business strategy and recommend to the Board on the Nepal Life strategic direction, capabilities and strategic objectives including prioritization and monitoring the progress of the business strategy and resulting actions and projects against milestones and budget.