© Asian Institute of Chartered Bankers 2014. All rights reserved.

The Board’s Role in Human Capital Management and Talent Management

Presented by: Rita Benoy BushonChief Executive Officer

Minority Shareholder Watchdog Group (MSWG)

CHALLENGES & OPPORTUNITIES IN BANKING LANDSCAPE

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NEED TO SEARCH FOR OPPORTUNITIES IN

CHALLENGING LANDSCAPE

Stricter banking

regulations post GFC

Higher capital requirements

Higher scrutiny by regulators &

stakeholders

Talent shortage

Lack of domain

expertise

Challenging economic conditions

Rapid changes in technology

Higher shareholder expectations

More sophisticated

customers

More mobile

workforce

Changing demographic

structure

Complex

product

offerings• Emergence of new wave

• New product offerings

• New ways of doing work

• New businesses emerging

Enhanced risk oversight role

KEY BOARD RESPONSIBILITIES IN LEADERSHIP AND GOVERNANCE

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To act in the best interest of the company with a duty of care and diligence

To ensure company’s prosperity and sustainability for the longer term

To protect company assets

To oversee key risks areas

To oversee talent management, human resource development & succession planning

To manage conflicts of interests and establish clear roles and governance structure

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GLOBAL TALENT SHORTAGE

• ManpowerGroup’s ninth annual Talent

Shortage Survey found 36% of employers globally report talent shortages in 2014— the highest percentage in seven years. 1

• Finance professionals have ranked among the top 10 hardest jobs to fill for each of the past eight years. 2

• In this climate of change, banking and financial institutions need to restructure their workforce as they seek to build the kind of flexibility needed to quickly adapt to economic changes. 1 - ManpowerGroup, The Talent Shortage Continues (2014)

2 - ManpowerGroup – Why Financial Institutions Need A Workforce Strategy

TALENT SHORTAGE AREAS ACROSS BANKING SECTOR IN MALAYSIA

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• Shortage mainly in the Middle and Specialist levels

• Impact of losing talent at Middle level is significant as substantial amount of time & money invested in training

• Shortage in Specialist level is critical – areas identified are risk management, IT and Islamic banking

Source: IBBM Study on talent and skills requirements for the banking sector in Malaysia June 2014

No shortage

Specialist level

Entry level

Middle level

Senior level

0% 5% 10%15%20%25%30%35%40%

4%

31%

9%

34%

21%

3%

31%

7%

34%

25%

% of respondents highlighting future talent shortage% of respondents highlighting current talent shortage

KEY BOARD STATISTICS OF TOP 5 & TOP 10 BANKS IN MALAYSIA (BY MARKET CAP)

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Source: MSWG MALAYSIA-ASEAN CG SURVEY 2014

Items Top 5 Top 10

Average Board Size 10 directors 9 directors

ED:NINED:INED 10%:40%:50% 10%:38%:52%

INEDs:• Average tenure• INEDs ≥ 9 years

5 years12%

6 years24%

Diversity:• Non-Malaysian directors• Women on Board

15%12%

13%12%

Skillsets:• Professional accountants• Finance-related• Legal• Engineering/Sciences• Others

28%37%10%12%13%

30%37%12%10%11%

Average ED remuneration RM7.2 million RM5.9 million

Average NED remuneration RM338K RM318K

Average Chairman remuneration (excluding founders)

RM732K RM621K

65%

67%

BOARD’S ROLE IN TALENT MANAGEMENT

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Board

NRC

Board Succession C-Suite Planning Workforce Planning

Align talent & business strategy

Play active oversight over talent

Set the right tone

Oversee talent-related risks Gaps & benchmarking Ensure processes are in place Monitor talent pipeline to

attract, develop & retain talent

Clear & transparent nomination framework

Annual board assessment

Identify gaps & needs Board diversity

(including gender diversity) crucial

Monitor & assess C-Suite talent pipeline

Assess leadership capabilities required in future vs current capabilities

Ensure co has a robust HRD & talent mgt processes

Trends in workforce demographics e.g. diversity, gen differences

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Talent management is an industry issue

The Board’s oversight role is critical in talent management

Develop a broad talent pool for the industry

Pipeline of accredited professionals for the industry boards and senior management

High-quality continuous education

Your talent strategy is your competitive advantage!

THANK YOU

CONCLUSION