 |
DBS considers good corporate governance to be the cornerstone of
a well-managed organisation. The promotion of corporate fairness,
transparency and accountability is led by a diversified and highly
qualified Board, aided by a seasoned and experienced management
team. We believe that good corporate governance goes beyond
the output of transparent, timely and full financial disclosures to a
gamut of decisions and structures manifested by board composition,
structure and decision making powers, risk management governance
to instilling the right corporate culture across the organisation. We
welcome two major industry initiatives in 2005 to improve corporate
governance standards in Singapore.
In 2005, the Singapore Council on Corporate Disclosure and
Governance (CCDG) introduced enhancements to its Code of
Corporate Governance which sets the corporate governance
benchmark for companies listed on the Singapore Exchange (SGX).
SGX-listed companies must describe their corporate governance
practices with respect to the recommendations in the Code and
explain reasons for any deviations.
Also in 2005, the Monetary Authority of Singapore (MAS) issued
new corporate governance regulations and guidelines for financial
institutions. Singapore banks must comply with the MAS regulations
by 2007.
DBS has taken steps to comply with the new MAS corporate
governance regulations ahead of the 2007 effective date as well as
abide by the MAS and CCDG guidelines, where applicable.
|
|
| |
Board composition
The present board size of 12 members is appropriate for the current
size of the DBS Group and the scope of its operations.
|
|
|
Board appointments and independence
Under our internal policy, directors are appointed to the Board for
a maximum of three two-year terms, although their terms may
be extended when considered appropriate by the Nominating
Committee and approved by the Board. Directors retire by rotation
and any re-election of directors is approved by shareholders at the
annual general meeting.
The Board’s Nominating Committee (NC) reviews and recommends
all director appointments. The candidates?qualifications and
experience are benchmarked against the criteria set out in
statutory regulations and in DBS?Articles of Association to help
the NC make an assessment as to the candidates?suitability and
potential contribution to the DBS Group. The NC also ensures that
the composition of the board brings a diverse range of industry
expertise and experience, both private and public sectors, which
will allow management to draw on the insights, expert knowledge
and alternative views of board members. The current Board includes
industry captains drawn from a wide range of industry sectors within
and outside banking. Five of our directors (Mr Andrew Buxton, Mr
Jackson Tai, Mr CY Leung, Mr Narayana Murthy and Mr John Ross)
are neither Singapore citizens nor Singapore permanent residents.
DBS recognises the importance of a carefully constructed succession
planning programme for the Board and its senior management team.
Mr S Dhanabalan retired as Chairman at the end of 2005 after more
than seven years of distinguished service. He is succeeded by Mr Koh
Boon Hwee.
The NC assesses the independence of the directors based on the
criteria set out in the MAS regulations and the Code. The NC
considers a director independent if he is not related to a substantial
shareholder or to senior management, and if he does not have
significant business relationships with companies in the DBS Group.
Seven directors ?Mr Ang Kong Hua, Mr Andrew Buxton, Mr Goh
Geok Ling, Mr Leung Chun Ying, Mr Narayana Murthy, Mr John
Ross and Mr Wong Ngit Liong (Mr NL Wong) ?are considered
independent by the NC.
Mr Ang, Mr Buxton, Mr Goh, Mr Leung, Mr Murthy and Mr NL
Wong are directors of companies that engage in business dealings
with the DBS Group. However, the NC has assessed the nature
and scope of the business relationships and determined that
these relationships do not undermine the independence of these
directors. Mr Ang, Mr Buxton, Mr Goh, Mr Leung and Mr NL Wong
are also directors of companies linked to Temasek Holdings, DBS?
substantial shareholder. Their appointments are non-executive in
nature and they are not involved in the day-to-day conduct of these
companies?businesses. The NC has therefore determined that their
independence is not compromised by their directorships in these
Temasek-linked companies. Mr Ross is not a director of any company
having business dealings with the DBS Group. Neither is he a director
of any Temasek-linked companies.
The other five directors (Mr Tai, Mr Frank Wong, Mr Koh, Mr Kwa
Chong Seng and Mr Peter Ong) are considered by the NC to be
non-independent under the MAS regulations. Mr Tai and Mr Frank
Wong are executive directors. Mr Koh and Mr Kwa are non-executive
directors of Temasek Holdings. Mr Ong is a senior civil servant
within the Singapore government and the Singapore government is
Temasek’s ultimate owner.
|
|
| |
Chairman and Chief Executive Officer
DBS had already separated the Chairman and Chief Executive Officer
(CEO) positions ahead of the Code requirement. The responsibilities
of the Chairman and CEO have been formalised by the Board.
The Chairman manages and leads the Board in its oversight over
management. He facilitates and ensures active and comprehensive
board discussions on matters brought up to the Board, and steers
the Board in making sound decisions. Members of the board have
free access to management and vice versa. The Group Management
Committee members are also invited to attend all Board meetings.
At annual general meetings and other fora, the Chairman plays a
pivotal role in fostering constructive dialogue between shareholders,
the Board and management. Shareholders?questions and concerns
are adequately attended to and addressed at its annual general
meetings.
The CEO oversees the execution of the Group corporate and
business strategy and is responsible for the day-to-day management
of the Group operations.
|
|
| |
Board conduct and responsibilities
The Board is responsible for setting the strategic vision, direction,
and long-term goals of the DBS Group.
It is also responsible for the selection and appointment of key senior
executives and ensuring that a succession planning program is in
place to prepare for contingencies, as well as to facilitate a smooth
management transition.
Matters that require Board approval include the Group’s annual
budget and strategic three-year plan, the Group’s strategic
acquisitions and divestments, any fund-raising exercise, the Group’s
risk governance framework and limits and any major decisions that
may have an impact on the Group’s reputation.
The Board emphasises professionalism, integrity and honesty as
key to the Group’s image and reputation. These core values and
principles to which all DBS staff must adhere to are set out in the
DBS Staff Code of Conduct and govern all dealings by DBS staff with
internal and external counterparts.
|
|
| |
Board meetings
Five scheduled Board meetings are conducted a year. At these
meetings, the Board reviews the Group’s financial performance,
business plans, potential strategic acquisitions or alliances, significant
strategic or operational issues requiring the Board’s approval or
attention, and matters attended to by the other Board committees.
In addition to the scheduled meetings, ad hoc meetings are also held
when necessary.
When exigencies prevent a Board member from attending meetings
in person, he can participate by tele- or video-conference. Board
approval for less critical matters may be obtained via written
resolutions by circulation.
|
|
| |
Attendance at Board and Committee Meetings |
|
| |
No. of meetings |
No. of meetings |
No. of meetings |
No. of meetings |
Held@ |
Attendance |
Held@ |
Attendance |
Held@ |
Attendance |
Held@ |
Attendance |
5 |
5 |
– |
– |
– |
– |
3 |
3 |
5 |
5 |
– |
– |
– |
– |
3 |
3 |
5 |
5 |
– |
– |
– |
– |
3 |
2 |
2 |
2 |
3 |
3 |
2 |
– |
2 |
2 |
2 |
2 |
– |
– |
2 |
2 |
2 |
1 |
2 |
2 |
– |
– |
– |
– |
– |
– |
4 |
4 |
2 |
2 |
2 |
2 |
– |
– |
|
5 |
4 |
5 |
5 |
– |
– |
3 |
1 |
|
|
|
| |
No. of meetings |
No. of meetings |
No. of meetings |
No. of meetings |
Held@ |
Attendance |
Held@ |
Attendance |
Held@ |
Attendance |
Held@ |
Attendance |
4 |
3 |
2 |
2 |
1 |
1 |
5 |
5 |
4 |
2 |
2 |
2 |
– |
– |
– |
– |
4 |
4 |
2 |
2 |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
3 |
3 |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
1 |
1 |
– |
– |
4 |
4 |
2 |
2 |
– |
– |
2 |
2 |
@ |
the number of meetings held during the period the director was a member of the Board and/or relevant Committee |
** |
Executive Committee was dissolved on 29 July 2005 and re-constituted into two committees to enable the Board to better focus on two key areas of its responsibilities, namely, the Board Credit Committee and the Board Strategy and Planning Committee. |
|
|
|
| |
Attendance at Board and Committee Meetings (Cont’d) |
|
| |
No. of meetings |
No. of meetings |
No. of meetings |
No. of meetings |
Held@ |
Attendance |
Held@ |
Attendance |
Held@ |
Attendance |
Held@ |
Attendance |
| 3 |
2 |
– |
– |
2 |
1 |
– |
– |
| 5 |
5 |
– |
– |
4 |
4 |
3 |
3 |
| 5 | 5 |
– | – |
– |
– |
– |
– |
| 5 | 5 |
– |
– | – |
– |
– |
– |
| 5 |
4 |
5 |
3 |
4 |
3 | – |
– |
| 5 |
4 |
– |
– | 4 |
4 | – |
– |
| 2 |
2 |
– | – |
– |
– |
– | – |
|
5 | 5 |
– | – |
– |
– | – |
– |
|
|
|
| |
No. of meetings |
No. of meetings |
No. of meetings |
No. of meetings |
Held@ |
Attendance |
Held@ |
Attendance |
Held@ |
Attendance |
Held@ |
Attendance |
| 4 |
2 |
2 |
1 |
– |
– |
2 |
1 |
4 |
3 |
2 |
2 |
– |
– |
2 |
2 |
– |
– |
– |
– |
1 |
1 |
5 |
5 |
– |
– |
– |
– |
1 |
1 |
2 |
2 |
– |
– |
– |
– |
– |
– |
– |
– |
| – |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
3 |
3 |
|
– |
– |
– |
– |
1 |
1 |
5 |
5 |
@ |
the number of meetings held during the period the director was a member of the Board and/or relevant Committee |
** |
Executive Committee was dissolved on 29 July 2005 and re-constituted into two committees to enable the Board to better focus on two key areas of its responsibilities, namely, the Board Credit Committee and the Board Strategy and Planning Committee. |
|
|
|
| |
Board training and information access
Directors undergo comprehensive orientation and training
programmes. A new director, on appointment, is provided with
guide-notes on a director’s role and responsibilities, and is also
briefed by the CEO and key business and support heads on the
Group’s operations.
Management ensures that the Board receives regular reports on the
Group’s financial performance and operations, and that the Board
is provided with relevant information and comprehensive analysis to
facilitate Board discussions on specific matters and issues. The Board
is also regularly briefed on accounting and regulatory changes, as
well as major industry and market developments.
Each business and support unit head certifies to the CEO and the
Chief Financial Officer (CFO) every quarter that, as far as he/she is
aware, there are no circumstances that would render the Group’s
financial statements misleading. The CEO and CFO in turn provide
an official undertaking to the Board Audit Committee and to the
external auditors, Ernst & Young, confirming that the financial
statements have been properly drawn up.
Directors have unrestricted access to all DBS employees. If directors
require external professional advice, the Group will at its own
expense make the necessary arrangements.
The Company Secretary attends Board meetings and ensures that all
relevant regulations and established procedures with regard to the
conduct of the Board are complied with.
|
|
| |
Board performance
A process is in place to assess the performance and effectiveness of
the Board as a whole and of each individual director.
For the collective appraisal, each director assesses the Board’s
performance and provides feedback to the Chairman of the Board
and the Chairman of the Nominating Committee. Both chairmen
consolidate the feedback and present the results to the Board
annually. The Board has found the collective assessment useful in
evaluating its own effectiveness, as directors have provided helpful
suggestions for improvement.
Currently, the Board’s performance is judged on the basis of
accountability as a whole, rather than strict definitive financial
performance criteria such as return on equity or return on assets.
For individual assessments, each director is evaluated on the basis
of his attendance at board meetings and contribution to Board
discussions. Each director completes a self and peer evaluation
form, which is seen only by the Chairman of the Board. The results
of a director’s appraisal are communicated to him when feedback
indicates that his contribution to the Board could be enhanced by
further professional development.
|
|
| |
The Board has established six committees to increase its
effectiveness. Two of them ?the Board Credit and Board Strategy
and Planning Committees ?were constituted in July 2005 following
the dissolution of the Executive Committee to enable the Board to
better focus on two key areas of its responsibilities.
|
|
| |
Audit Committee
The Audit Committee comprises Mr Ang (Chairman), Mr Goh and
Mr Ong.
The Committee reviews the Group’s financial statements before
submission to the Board. The Committee is briefed on significant
changes to accounting standards and policies and its impact on
the Group’s reported results. The Committee also assesses the
effectiveness of the Group’s internal controls and procedures.
The Group’s external auditors are accountable to the Committee. The
external auditors present its audit plan of the Group, their evaluation
of the Group’s internal accounting controls and its long form audit
report to the Committee for approval. The terms of the external
auditors?appointment, their effectiveness, independence and
objectivity, and the amount of non-audit services provided during the
year, are reviewed by the Committee.
The heads of Group Audit and Group Legal and Compliance as well
as the Group’s external auditors attend all committee meetings. The
Committee also holds separate meetings with the external auditors
without the presence of management at each committee meeting.
The Committee has reviewed the financial statements with
management and the external auditors and is of the view that the
Group’s financial statements for 2005 are presented in conformity
with generally accepted accounting principles in all material aspects.
The Committee has considered the business relationship between
the Group and the external auditors for 2005, taking into account
the amount of non-audit services provided and has satisfied itself
that the nature and extent of such services will not prejudice the
external auditor’s independence and objectivity. It is satisfied that the
external auditors can be considered independent.
The Committee also reviewed and is satisfied with whistle-blowing
arrangements instituted by the Group in 2005 to protect employees
when they report in confidence suspected or known improprieties of
their colleagues.
The Committee also performs an annual assessment of the
effectiveness of the Group’s Internal Audit function and ensures that
Internal Audit is adequately resourced to fulfil its mandate.
|
|
| |
Board Credit Committee
The Board Credit Committee comprises Mr Koh (Chairman), Mr Tai,
Mr Frank Wong, Mr Goh and Mr Kwa. All credit exposures exceeding
the limit delegated by the Board to management are approved by
this Committee.
|
|
| |
Board Strategy and Planning Committee
The composition of the Board Strategy and Planning Committee is
the same as the Board Credit Committee. This Committee serves as
a forum where members deliberate on strategic matters, including
potential mergers and acquisitions, alliances, fund-raising exercises,
before these matters are raised to the full Board for discussion and/
or approval.
|
|
| |
Board Risk Management Committee
The Board Risk Management Committee comprises Mr Kwa
(Chairman), Mr Ang, Mr Koh, Mr Ong and Mr Ross.
The Committee is responsible for oversight of risk governance, risk
framework and limits for the Group. It approves the overall risk
governance framework as well as the framework for credit, market
and operational risks, including the applicable limits.
The key matters deliberated last year included review of the Group’s
risk profile, the approval of an overall Risk Governance Target
Framework and the governance framework for credit risk, market
risk, liquidity risk and operational risk. It also reviewed significant risk
incidents of the Group.
|
|
| |
Compensation Committee
The Compensation Committee comprises Mr Kwa (Chairman),
Mr Goh, Mr Koh, Mr Leung, Mr Murthy and Mr NL Wong.
The Committee reviews and approves the remuneration of each
executive director, as well as provides oversight on the Group’s senior
management level compensation, the statistics and trends of the
compensation, as well as the aggregate performance-related cash
bonuses and performance share grants to be paid to DBS employees
each year. It also oversees management development and succession
planning for key positions. The work of the Compensation
Committee is described in greater detail under “Remuneration
Matters?
|
|
| |
Nominating Committee
The Nominating Committee comprises Mr Leung (Chairman),
Mr Ang, Mr Koh, Mr Murthy and Mr NL Wong.
Details of the terms of reference of the Nominating Committee
are discussed in the section under “Board appointments and
independence?above.
|
|
| |
Remuneration Policy
DBS?remuneration policies are integral to its corporate strategy.
The Group pays special attention to rewarding and developing
employees, recognising that they are not only a key stakeholder
but also its most important resource. The Group believes that a
transparent appraisal and remuneration system is a crucial driver of
employee performance and retention.
|
|
| |
The Group’s remuneration policy seeks to attract and retain talented
and skilled employees; motivate them to perform their best so
that the Group’s financial objectives can be attained; and develop
a strong performance-oriented culture across the Group by clearly
linking performance with reward. The Group’s remuneration
framework seeks to foster an ownership culture that aligns the
interests of employees with those of shareholders.
The total compensation of each employee is benchmarked to the
market and consists of three components: base pay, cash bonuses
and long-term share incentives comprising DBSH performance shares
and share options. The remuneration of senior executives is reviewed
by the Compensation Committee.
|
|
| |
The Group believes that executive directors?remuneration and nonexecutive
directors?fees should appropriately reflect the extent of a
director’s responsibilities and obligations, and be competitive against
industry benchmarks.
|
|
| |
Directors receive basic directors?fees. Members of certain Board
committees also receive fees.
Directors are encouraged to invest half of their fees in DBSH shares
and to hold not less than 50% of these shares for the duration of
their respective terms. Directors?fees are approved by shareholders
at the annual general meeting (AGM) of DBSH.
The current fee structure is as follows:
|
|
| |
Board Chairman:
|
$85,000 |
| Director: |
$50,000 |
|
| Committee |
Chairman |
Committee Member |
| Audit Committee |
$35,000 |
$20,000 |
| Board Risk Management Committee |
$35,000 |
$20,000 |
| Board Credit Committee |
$35,000 |
$20,000 |
|
|
|
| |
No fees have been paid to the Compensation Committee (CC) since
its establishment on 15 September 1999. However, considering that
the CC has been very active in the last two years, meeting about
five times a year, the Board proposes that, with effect from 2005,
the fees of the CC be aligned to the AC and the BRMC. No fees
have been paid to the NC since its establishment on 3 September
1999 despite the responsibilities accorded to the NC under statutory
regulations. The Board proposes that, with effect from 2005, the NC
Chairman be paid $17,500 and a member be paid $10,000 per year.
These fees will be put to shareholders at the forthcoming annual
general meeting.
|
|
| |
Remuneration of the Executive Directors
In determining the remuneration for executive directors, the
Compensation Committee takes into account certain principles.
The remuneration should motivate the executive directors to
achieve DBS Group’s performance targets, both annual and longterm,
and the performance-related elements of remuneration
should form a significant part of their total remuneration package.
Executive directors?interests should be aligned with shareholders?
interests, and remuneration should be linked directly to DBS Group
performance and individual performance. The Compensation
Committee’s recommended remuneration package for an executive
director is endorsed by the Board.
Executive directors are recruited by DBS under standard employment
terms which include provisions for basic salary, performance and
incentive bonus. No special arrangements are in place for early
termination of services in their capacity as director.
|
|
| |
Breakdown of Directors?Remuneration
The following table shows the composition (in percentage terms) of
the remuneration of directors, including those who were appointed
or who resigned or retired during the year. They are grouped in
bands of $250,000 for the year ended 31 December 2005.
|
|
| |
Breakdown of DBSH Directors?Remuneration (1 Jan 2005 ?31 Dec 2005)
Frank Wong Kwong Shing |
15 |
77 |
1(3) |
3 |
4 |
Jackson Tai
|
34 |
57 |
1(3) |
4 |
4 |
|
|
|
|
|
| S Dhanabalan (4) |
0 |
0 |
80 |
0 |
20 |
| Koh Boon Hwee (5) |
– |
– |
100 |
– |
– |
| Ang Kong Hua (6) |
– |
– |
100 |
– |
– |
| Bernard Chen Tien Lap (7) |
– |
– |
100 |
– |
– |
| Fock Siew Wah (7) |
– |
– |
100 |
– |
– |
| Gail Fosler (Ms) (7) |
– |
– |
100 |
– |
– |
| Goh Geok Ling |
– |
– |
100 |
– |
– |
| Kwa Chong Seng |
– |
– |
100 |
– |
– |
| Leung Chun Ying |
– |
– |
100 |
– |
– |
| Narayana Murthy |
– |
– |
100 |
– |
– |
| Peter Ong Boon Kwee |
– |
– |
100 |
– |
– |
| John Ross |
– |
– |
100 |
– |
– |
| Thean Lip Ping (7) |
– |
– |
100 |
– |
– |
| Wong Ngit Liong |
– |
– |
100 |
– |
– |
Frank Wong Kwong Shing |
100 |
53,500 |
$15.07 |
1 March 2015 |
Jackson Tai |
100 |
53,500 |
$15.07 |
1 March 2015 |
|
|
|
|
| S Dhanabalan (4) |
100 |
– |
– |
– |
| Koh Boon Hwee (5) |
– |
– |
– |
– |
| Ang Kong Hua (6) |
– |
– |
– |
– |
| Bernard Chen Tien Lap (7) |
– |
– |
– |
– |
| Fock Siew Wah (7) |
– |
– |
– |
– |
| Gail Fosler (Ms) (7) |
– |
– |
– |
– |
| Goh Geok Ling |
– |
– |
– |
– |
| Kwa Chong Seng |
– |
– |
– |
– |
| Leung Chun Ying |
– |
– |
– |
– |
| Narayana Murthy |
– |
– |
– |
– |
| Peter Ong Boon Kwee |
– |
– |
– |
– |
| John Ross |
– |
– |
– |
– |
| Thean Lip Ping (7) |
– |
– |
– |
– |
| Wong Ngit Liong |
– |
– |
– |
– |
(1) |
Valuation based on Binomial model
|
(5) |
Appointed on 15 June 2005 |
(2) |
Refers to the number of unissued DBSH ordinary shares under
the DBSH Share Option Plan |
(6) |
Appointed on 21 March 2005 |
(3) |
Fees are not retained by directors |
(7) |
Resigned on 29 April 2005 |
(4) |
Resigned on 31 December 2005 |
|
|
|
|
|
| |
Key Executives Remuneration
The Code recommends that the remuneration of at least the top five key executives who are not also directors be disclosed within bands of
$250,000. However the Board believes that disclosure of the remuneration of individual executives is disadvantageous to the DBS Group’s
business interests, given the highly competitive industry conditions, where poaching of executives is commonplace.
|
|
| |
Immediate Family Member of Director
The following table shows the breakdown (in percentage terms) of the annual remuneration of employees who were/are immediate family members of directors for 2005:
|
|
| |
Sister(3) of Mr Peter Ong |
40 |
24 |
3 |
33 |
Daughter of Mr S Dhanabalan |
63 |
29 |
2 |
6 |
Sister(3) of Mr Peter Ong |
100 |
3,500 |
$15.07 |
Lapsed |
Daughter of Mr S Dhanabalan |
100 |
900 |
$15.07 |
1 March 2015 |
(1) |
Valuation based on Binomial model |
(2) |
Refers to the number of unissued DBSH ordinary shares under the DBSH Share Option Plan |
(3) |
Resigned on 30 September 2005
|
|
|
|
| |
Long-term Share Incentives ?Performance Share Plan, Share
Option Plan and Share Ownership Scheme
The Group has put in place share-based remuneration programmes
allowing employees to share in its growth and success. These plans
comprise a DBSH Performance Share Plan (“PSP?, a DBSH Share
Option Plan (“SOP? and a DBSH Share Ownership Scheme (“SOS?.
Managing Directors, Senior Vice Presidents and Vice Presidents are
eligible to participate in the PSP and SOP. Select high-performing
Assistant Vice Presidents are eligible to participate in the SOP. The
awards made under the PSP and SOP are part of the annual incentive
remuneration, which comprises cash bonuses and share-based
awards. The share portion (i.e. PSP and SOP) of an employee’s annual
incentive remuneration increases correspondingly with the amount
of the employee’s total annual incentive remuneration. Employees
with higher annual incentive remuneration receive a larger portion
of their compensation in share-based awards.
|
|
| |
Shares & Options Issued
Details of the DBSH Performance Share Plan and the DBSH Share Option Plan (the “Plan? appear in pages 104 and 106 of the Directors?
Report. In compliance with listing requirements, the following participants in the Plan received the following number of options:
|
|
| |
| Jackson Tai (Director) |
53,500 |
440,175 |
| Frank Wong Kwong Shing (Director) |
53,500 |
448,050 |
| Jackson Tai (Director) |
0 |
440,175 |
Frank Wong Kwong Shing
(Director) |
0 |
448,050 |
* |
DBSH has no controlling shareholders and no disclosure is made in this respect |
# |
The options granted were in accordance with the terms of the Plan
|
|
|
|
| |
In compliance with listing requirements, share options issued by the
Group in 2005 to any participant in the SOP (including any director
or employee) were less than 5% of the total number of options
available under the SOP.
No options were issued at a discount in 2005.
The aggregate number of options granted to the directors and
employees of the DBS Group in 2005 was 2,815,600. The aggregate
number of options granted to the directors and employees of the
DBS Group since the commencement of the Plan to the end of the
financial year under review is 62,796,690.
|
|
| |
For PSP and SOP, vesting periods are imposed. The number of
shares eventually awarded upon vesting under the PSP is based on
DBS Group’s performance for a three-year performance period as
measured by the Group’s return on equity (ROE). The aggregate total
number of new DBSH ordinary shares that may be issued under the
SOP and the PSP may not exceed 7.5% of the issued ordinary shares
of DBSH.
We are in the process of reviewing the alignment of the objectives
of the PSP with our business strategies.
Employees who are not eligible for the SOP or PSP are eligible
to participate in the SOS. The SOS is a market purchase plan
administered by DBS Trustee Ltd, a wholly-owned subsidiary
company of DBS Bank. Under the SOS, all confirmed employees with
at least one year of service can subscribe up to 10% of their monthly
base pay to buy units of DBSH ordinary shares, with DBS contributing
an additional 50% of the amount the employee contributes.
|
|
| |
The Group has procedures to comply with the existing regulations
governing related party transactions for banks and listed companies.
These regulations include the Banking Act, MAS directives and
the guidelines on interested person transactions in the SGX Listing
Manual. New directors are briefed on the relevant provisions that
they need to comply with. If necessary, existing credit facilities to
related parties are adjusted prior to a director’s appointment, and all
credit facilities to related parties are monitored on an on-going basis.
|
|
| |
The Group has granted credit facilities to the following related parties in the ordinary course of business on normal terms and conditions.
The outstanding amounts of these credit facilities and the estimated values of collateral as at 31 December 2005 are as follows:
|
|
| |
| Granted to/received from : |
|
|
| DBSH Directors and their related entities |
34 |
# |
| Companies with DBSH Directors represented on their boards |
853 |
20 |
| Bank-related companies(1): |
|
|
| ?engaged in financial activities |
691 |
5 |
| ?engaged in non-financial activities |
279 | |
| Granted to/received from : |
|
|
| DBSH Directors and their related entities |
93 |
– |
| Companies with DBSH Directors represented on their boards |
223 |
?/div> |
| Bank-related companies(1): |
|
|
| – engaged in financial activities |
1,607 |
1,016 |
| – engaged in non-financial activities |
411 |
6 |
(1) |
Excludes transactions between subsidiary companies and their own subsidiary companies. |
# |
Amount under $500,000 |
|
|
|
| |
As required under the SGX Listing Manual, the following are details
of interested person transactions in 2005:
|
|
| |
Personalisation/despatch of cheque books/ printing of security documents |
$1,591,002 |
Subscription of telecom services |
$14,000,000 |
System support and maintenance |
$655,000 |
Travel expenses |
$5,553,272 |
Hotel accommodation |
$378,558 |
Renewal of leases for Branches/ATMs |
$1,893,400 |
Renewal of leases for ATMs |
$216,000 |
Renewal of lease for Treasures Centre |
$763,067 |
Supply of electricity (DBS Bank Ltd) |
$5,662,895 |
Supply of electricity (DBS China Square Ltd) |
$1,551,005 |
Advisory services with respect to the sale of DBS Building |
$1,725,000 |
|
|
|
| |
DBS has adopted more stringent “black-out?policies than advised
under the Best Practices Guide issued by the SGX. DBS employees
are prohibited from trading in DBS shares and securities one month
before the release of the half-year and full-year results and three
weeks before the release of the first quarter and third quarter results.
In addition, directors and employees are prohibited at all times from
trading if they are in possession of material non-public information.
Employees with access to price-sensitive information in the course of
their duties must obtain prior approval to trade in any securities listed
in Singapore and Hong Kong. Such employees are also instructed to
trade through the Group’s stockbroking subsidiaries.
|
|
| |
Dissemination of Information
The Group maintains an active dialogue with shareholders. It holds
in-person briefing sessions or telephone conference calls with the
media and analysts in connection with quarterly results releases. All
press statements and quarterly financial statements are published
on the DBS and SGX websites. A dedicated investor relations team
supports the CEO and CFO in maintaining close dialogue with
institutional investors.
During the year, management met more than 170 local and foreign
investors in more than 300 meetings. Management also participated
in seven investor conferences and roadshows comprising two each
in the US and Europe, and one each in Tokyo, Hong Kong and
Singapore.
The Group embraces and commits to fair, transparent and timely
disclosure policy and practices. All price sensitive information or data
are publicly released, prior to individual sessions held with investors
or analysts.
|
|
| |
Shareholder meetings
The Group views the annual general meeting as an opportune forum
for retail investors to meet the Board and senior management. The
CFO presents the Group’s preceding year’s financial performance to
all shareholders present ahead of formal proceedings of the general
meeting. The Group’s external auditors are also available to answer
shareholders?queries.
In accordance with the recommendations of the Code of Corporate
Governance, resolutions requiring shareholder approval are
tabled separately for adoption at the AGM unless the matters for
consideration are closely related and would more appropriately be
considered together.
Shareholders can vote in person or by proxy.
|
|
| |
Internal Audit
Group Audit is an independent function that reports directly to
the Audit Committee and the CEO. Group Audit meets or exceeds
the Standards for Professional Practice of the Institute of Internal
Auditors in all key aspects. The professional competence of our
internal auditors is maintained or upgraded through training
programmes, conferences and seminars that provide updates on
auditing techniques, regulations and banking products and services.
An annual audit plan is developed under a structured risk assessment
approach that examines all of the Group’s activities and entities, their
inherent risks and internal controls. Audit assignments are identified
based on this approach and audit resources are focused on the
activities deemed to carry higher risks.
The progress of corrective actions on outstanding audit issues is
monitored monthly through a centralised Group-wide tracking
system. Information on outstanding issues is categorised according
to severity and monthly reports are sent to the Audit Committee
Chairman, the Chairman of the Board, senior management and all
Group heads.
All audit reports which are rated as requiring attention are copied to
the Audit Committee, the external auditors and senior management.
The regulators are also apprised of all relevant audit matters and may
request for further information on audit matters at any time.
The head of Group Audit is Edmund J Larkin, who has more than
20 years of experience in internal audit, risk management and
operations with global financial institutions and public accounting
firms. Mr Larkin has full access to the Audit Committee and senior
management, and his appointment is approved by the Committee.
Group Audit works closely with the external auditors and meets
regularly with them to discuss matters of mutual interest, to
strengthen working relationships and to co-ordinate audit efforts.
The external auditors review the effectiveness of the Group’s internal
controls and risk management during an annual statutory audit.
Material non-compliances with established practices and procedures
and regulations, as well as internal control weaknesses noted during
the audit, together with recommendations, are reported to the Audit
Committee, which ensures that high risk outstanding issues are dealt
with in a timely manner.
|
|
| |
Internal controls
A sound system of internal controls requires a defined organisational
and policy framework. The Group has a management framework
that clearly defines the roles, responsibilities and reporting lines of
business and support units. The delegation of authority, control
processes and operational procedures are documented and
disseminated to staff. The Group Audit, Group Risk and Group
Legal and Compliance functions provide independent oversight over
controls and risks within the Group.
The Audit Committee and the Board Risk Management Committee
have reviewed the adequacy of DBS?control environment. The
Board believes that the system of internal controls in place up to the
date of this report, is adequate for the current business scope and
operations of the Group.
|
|
| |
We see strong risk management capabilities as vital to the success
of any well-managed bank. The Group Risk Management function
is the central resource for driving such capabilities in DBS, and
it complements the risk and control activities of other functions
including Group Legal and Compliance and Group Audit. More on
risk management can be found in the following section.
|
|
| |
|
|