SBN HOLDINGS LIMITED Annual Report 2022

OUR ACCOUNTABILITY 38 SBN HOLDINGS LIMITED Annual report 2022 39 Board people & culture (BPC) committee The role of the BPC subcommittee is to: ■provide oversight on the compensation of senior management and other key personnel and ensure that compensation is consistent with the group's culture, objectives, strategy and control environment ■ perform other duties related to the bank's compensation structure in accordance with applicable laws, rules, policies and regulations. The term 'compensation' includes salaries, allowances, long-term incentives, bonuses, severance arrangements and other benefits, rights or remuneration received under the group's policies. The goal of the subcommittee is to maintain compensation policies, which will attract and retain the highest quality senior managers, which will reward the senior managers for the group's progress and enhancement of shareholder value. Another objective of the subcommittee is to consider and evaluate nominations made for the appointment of independent, non-executive and/or executive directors to sit on the board of directors and to recommend fees for the directors. BPC COMMITTEE ATTENDANCE 2022 H Maier (chairperson) J Muadinohamba¹ N Bassingthwaighte² M Dax 21 February 2022 Q1 20 May 2022 Q2 19 August 18 November 2022 2022 Q3 Q4 N/A N/A N/A N/A ✓ N/A ✓ ✓ Attended N/A Not available 1 Retired 22 April 2022. 2 Appointed May 2022. Going concern Board corporate social investment (CSI) committee The role of the board CSI committee is to: ■ratify the group CSI strategy, policy and guidelines ■ratify alignment of the CSI strategy to the business strategy ■ratify proposed amendments to the focus area of CSI policy from time-to-time ■ note the CSI decisions made by the relevant social investment committees of SBN ■take overall accountability for the reputation management of all CSI initiatives that impact the Standard Bank brand. BOARD CSI COMMITTEE ATTENDANCE 2022 M Dax (chairperson) Dr N Hamunime J Muadinohamba¹ I Tjombonde 9 February 2022 Q1 ✓ Attended N/A Not available Community upliftment N/A 9 November 2022 Q4 N/A Retired 22 April 2022. SBN Holdings pledges 1% of net profit after tax generated by its business operations to CSI initiatives through its SEE strategy. The strategic focus is to invest in entrepreneurship development, education, environmental matters, and health and wellness. Company secretary The role of the company secretary is to ensure the board remains cognisant of its duties. In addition to guiding the board on discharging its responsibilities, she keeps the board abreast of relevant changes in legislation and governance best practices. The company secretary also oversees the induction of new directors, including directors of subsidiary companies, as well as the ongoing education of directors. To enable the board to function effectively, all directors have full and timely access to information that may be relevant to the proper discharge of their duties. This includes information such as corporate announcements, investor communications and other developments which may affect the group and its operations. All directors have access to the services of the company secretary. On the recommendation of the BAC, the board considers and assesses the going concern basis in the preparation of the annual financial statements annually at year end. At the interim reporting period, a similar process is followed to enable the board to consider whether or not there is sufficient reason for this conclusion to be affirmed. Relationship with stakeholders Regular, pertinent communication with stakeholders is part of the group's fundamental responsibility to create shareholder value and improve stakeholder relationships. In addition to the ongoing engagement facilitated by the company secretary, the chairman encourages shareholders to attend the annual general meeting (AGM) where interaction is welcomed. The chairmen of the BAC and BPC committees are available at the meeting to respond to questions from shareholders. The group proposes separate resolutions on each issue put forward to shareholders. Connecting with our stakeholders SBN Holdings' relevance to the markets and society in which it operates depends on continued and meaningful engagement with all stakeholders. Stakeholder management involves the optimal employment of the organisation's resources to build and maintain good relationships with stakeholders. This helps the group to manage the expectations of society, minimise reputational risk and form strong partnerships, which all underpin business sustainability. Sustainability The Namcode recommends that a company integrates financial and non-financial reporting. This means that the annual report to stakeholders must reflect how economic, social and environmental issues impact on the company's business strategy and, in turn, how these are considered when making business decisions. This evolution in reporting stems from the growing realisation that environmental and social issues have material costs impacts and could directly impact a company's long-term viability. Building on the group's previous non-financial disclosure in its annual reports, this year the group has improved its reporting to include more information on the issues that are material to stakeholders and the group's long-term sustainability which can be found in the SBN Holdings Limited ESG report. Ethics and organisational integrity The group's code of ethics is designed to empower employees and enable effective decision-making at all levels of the business according to defined ethical principles. It also aims to ensure that, as a significant organisation in the financial services industry, the group adheres to the highest standards of responsible business practice. The code interprets and defines the group's values in greater detail and provides value-based decision-making principles to guide its conduct. It is aligned with other SBN Holdings policies and procedures and supports the relevant industry regulations and laws. The code specifies acceptable and unacceptable practices and assists in making ethical infringements easy to identify. It also promotes awareness of, and sensitivity to, ethical issues. The chief executive and ethics officer are the formal custodians of the group code of ethics and ultimately responsible for its implementation. Ethics incidents are reported via the ethics and fraud hotline, human resources department, risk department, financial crime control department and the ethics officers. Reported incidents include fraud, harassment, ethical dilemmas in procurement and abuse of authority. Quarterly ethics reports are presented to the BAC. Conflict of interest The board has a detailed process in place to ensure that outside business interests and conflicts of Interest are declared by all directors on the board. We are comfortable that during the period under review there were no conflicts of interests declared which would have an impact on any of the decisions made in relation to matters put before the board for discussion and/or approval. Remuneration Remuneration philosophy The group's remuneration philosophy aligns with its core values, including growing our people and delivering value to our shareholders. The philosophy continues to emphasize the fundamental value of our people and their role in ensuring sustainable growth. This approach is crucial in an environment where skills remain scarce. The group's board of directors sets the principles for the remuneration philosophy in line with approved business strategy and objectives. The philosophy aims to maintain an appropriate balance between employee and shareholder interests. A key success factor for the bank is its ability to attract, retain and motivate the talent it requires to achieve its strategic and operational objectives in Namibia. Remuneration governance The following key factors have informed the implementation of reward policies and procedures that support the achievement of business goals: ■the provision of rewards that enable the attraction, retention and motivation of employees and the development of a high-performance culture ■ maintaining competitive remuneration in line with our markets, trends and required statutory obligations ■rewarding people according to their contribution allowing a reasonable degree of flexibility in remuneration processes and choice of benefits by employees ■ educating employees on the full employee value proposition. Board remuneration structure Non-executive directors Terms of service All independent non-executive directors are provided with a letter of appointment setting out the terms of their engagement. Directors are appointed by the shareholders at the AGM and interim board appointments are allowed between AGMs. One-third of the longest serving, non-executive directors are required to retire at each AGM and may offer themselves for re-election. If recommended by the directors and supported by the board, the board then proposes their re-election to shareholders. Fees The remuneration of board members is reviewed by the board of directors and approved and ratified at the AGM. Non-executive directors receive fixed fees for service on boards and board committees. This includes a retainer that has been calculated in line with market practices. There are no contractual arrangements for compensation for loss of office. Non-executive directors do not receive short-term incentives, nor do they participate in any long-term incentive schemes. The fees for non-executive directors are reviewed on an annual basis to ensure that such fees at all times remain market-related. Executive directors Executive directors receive a remuneration package and qualify for long-term incentives on the same basis as other employees. The components of a remuneration package are as follows: guaranteed remuneration - based on market value and the role they play Transformation annual bonus and pension incentive - used to incentivise the achievement of group objectives share-based incentives - rewards the sustainable creation of shareholder value and aligns behaviour to this goal pension - provides a competitive post-retirement benefit in line with group employees executive directors are not subject to retention agreements The group through the Bankers Association of Namibia is a signatory to the Namibia Financial Sector Charter. The group is committed to achieving full compliance with the minimum targets set out in the Charter. This is tracked by the board and management at the highest level. Details of non-executive directors' fees can be found in Annexure C.