SBN HOLDINGS LIMITED Annual Report 2022

OUR ACCOUNTABILITY 34 34 SBN HOLDINGS LIMITED Annual report 2022 Namib Desert- Namibia Corporate governance report The board operates on the understanding that sound governance practices are fundamental to earning the trust of stakeholders, which is critical to sustaining performance and preserving shareholder value. The group's governance framework enables the board to balance its role of providing risk oversight and strategic counsel and ensuring adherence to regulatory requirements and risk tolerance. The board is committed to upholding the fundamental tenets of governance, which include discipline, independence, responsibility, fairness, social responsibility, transparency and accountability of directors to all stakeholders. The board's approach to governance is to embrace relevant local and international best practice. The principles of the Namcode inform the governance framework and practices of the group and its subsidiaries. SBN Holdings board Board committees Board audit committee Board credit committee Board risk committee Board IT committee Board people and culture committee Management committees Board corporate social investment committee EXCO PROJECT EXCO ALCO HRC CRMC RMC CC IFC NPC TBC EXCO: Executive committee ALCO: Asset and liquidity management committee HRC: High risk committee CRMC: Credit risk management committee RMC: Risk management committee CC: Credit committee IFC: Internal financial control committee NPC: New product approval committee TBC: Tender board committee Governance framework Codes, regulations and compliance Complying with all applicable legislation, regulations, standards and codes is integral to the group's culture. The board delegates responsibility for compliance to management and monitors this through the compliance function. Oversight of compliance risk management is delegated to the audit committee, which reviews and approves the compliance mandate submitted by the head of compliance, who reports on a quarterly basis on, among others, the status of compliance risk management in the group, significant areas of non-compliance, as well as feedback on interactions with regulators. The compliance function, as well as the compliance policy and governance standards are subject to review and audit by the internal audit function. Material regulatory issues are escalated to the board risk committee. Board and directors The board of directors is the group's highest decision-making body and is ultimately responsible for governance. The group has a unitary board structure, and the roles of chairman and chief executive are separate. The chairman is an independent non-executive director, as are the majority of directors on the board. The split of executive, non-executive and independent directors ensures a balance of power on the board, so that no individual or group can dominate board processes or decision- making and ensures the appropriate level of challenge. Director composition (%) Independent non-executive Non-executive Executive 2021 2022 2022 2021 6220 60 20 20 Independent non-executive directors The board annually reviews and confirms the classification of non-executive directors as independent. Six non-executive directors are independent. Succession planning Succession planning is a key focus, and the board considers the composition of the board and its committees on an ongoing basis. The group aims to retain board members with considerable experience to ensure that appropriate levels of management oversight are maintained. The board is satisfied that the current talent pool available within the group and the work being done to strengthen it provides adequate succession depth over the short and long term. The board is also satisfied that there is a clearly articulated talent strategy which focuses on creating a strong talent pool for key roles, and that the group is building capability on core areas to enable business strategy and ensure regulatory compliance. The board is further pleased to note that the employee value proposition (EVP) has now been implemented. Skills, knowledge, experience and attributes of directors The board ensures that directors possess the skills, knowledge and experience to fulfil their duties. The directors bring a balanced mix of attributes to the board, including: ■domestic and international experience ■ operational experience _ understanding of macroeconomic and microeconomic factors affecting the group ■ financial, legal, information technology, human capital, entrepreneurial and banking skills ■expertise in risk management and internal financial control. The board regularly considers board members individually and collectively to ensure the board remains strategically, demographically and operationally appropriate. Access to information and resources Executive management and the board interact regularly. This is encouraged and the executive committee attends all board meetings. Directors have unrestricted access to management and company information, as well as the resources to carry out their roles and responsibilities. This includes external legal advice at the group's expense. Strategy The board is responsible for determining the group's strategic direction. Management presents the group's strategy annually and discusses and agrees it with the board. The board ensures the strategy is aligned with the group's values, performance and sustainability objectives, and addresses the associated risks. Financial performance is monitored through quarterly management reports. In line with banking regulations, the board agrees the group's corporate governance and risk management objectives for the year ahead. The board and the relevant risk committees monitor performance against governance and risk objectives respectively. Board responsibilities The general powers of the directors are set out in the group's articles of association. They have further unspecified powers and authority, in respect of matters, which may be exercised and dealt with by the group, which are not expressly reserved for the members of the group in general meeting. The main responsibilities of the board as set out in the board mandate are as follows: ■approval of the strategic plan and the annual business plan, the setting of objectives and the review of key risks and performance areas ■ monitoring the implementation of board plans and strategies against a background of economic, environmental and social issues relevant to the group and international political and economic conditions, as well as the mitigation of risks by management appointment of the chief executive and maintenance of a succession plan ■appointment of directors, subject to election by the members in general meeting ■ determination of overall policies and processes to ensure the integrity of the group's management of risk and internal control. Delegation of authority The board retains effective control through a well-developed governance structure that provides a framework for delegation. Board committees facilitate the discharge of board responsibilities and provide in-depth focus on specific areas. The board reviews the mandate of each committee at least annually. The board delegates authority to the chief executive and executive directors to manage the business and affairs of the group. The executive committee assists the chief executive when the board is not in session, subject to statutory parameters and the board's limits on the delegation of authority to the chief executive. The company secretary monitors board-delegated authorities. 35