Implementation of GCG Guidelines

APPLICATION OF CORPORATE GOVERNANCE ASPECTS AND PRINCIPLES IN LINE WITH THE OTORITAS JASA KEUANGAN REGULATIONS

Based on OJK Regulation No. 21/POJK.04/2015 concerning Implementation of Corporate Governance Guidelines for Public Companies and OJK Circular Letter No. 32/SEOJK.04/2015 concerning Corporate Governance Guidelines for Public Companies, contain 5 (five) aspects, 8 (eight) principles, and 25 (twenty-five) governance recommendations recommended by OJK. CIMB Niaga applies such aspects, principles and recommendations based on the “comply or explain” approach as follows:

Aspect Principle Recomendation Explanation
Public Company Relationship with Shareholders in ensuring the Right of the Shareholders Principle 1
Improve the Management Value of the General Meeting of Shareholders (GMS)
1.1. The Public company has technical voting procedure either open or closed that promotes independency and the interest of shareholders Comply

As an effort to improve independence, freedom and confidentiality of shareholders in the voting process, CIMB Niaga has policy to conduct voting in the GMS in a closed and electronic manner (e-voting) for each agenda of the GMS. This policy is set out in the GMS Rules.

Since 2018, the voting mechanism in AGM and EGM was conducted in a closed and electronic manner, through touch screen devices provided by CIMB Niaga, smartphones or other mobile devices (tablets, ipad, etc.) owned by the Shareholders or their proxies . This made CIMB Niaga the first public listed company in Indonesia to hold voting for shareholders electronically (e-voting). The vote counting results are conducted by an independent party namely the Share Registrar of PT Bima Registra and Notary Ashoya Ratam, SH. Thus the independence and interests of shareholders can be maintained in the voting process.

The GMS Rules have been uploaded on the Bank's website 28 (twenty one) days before the GMS and distributed to shareholders when entering the GMS room, and read out by the Corporate Secretary before the GMS begins.
1.2 All members of the Board of Directors and the Board of Commissioners are present at the Annual GMS Comply

All members of the Board of Directors and the Board of Commissioners of CIMB Niaga were present at the AGM on 15 April 2019. Members of the Board of Directors and the Board of Commissioners present at the AGM can represent the Bank to provide explanations to shareholders on each agenda of the AGM to be carried out properly.
1.3 Summary of GMS minutes is available on the public company’s website at least for 1 (one) year Comply

CIMB Niaga uploaded the summary of the GMS minutes on the same day after the adjournment of the GMS on the CIMB Niaga’s website (www.cimbniaga.co.id). The summary of the minutes of the GMS since 2013 up to the present day are available on the Bank's website, both in Bahasa Indonesia and English.
Public Company Relationship with Shareholders in ensuring the Right of the Shareholders Principle 2
Improving the Communication Quality of the Public Company with Shareholders or Investors
2.1 The Public Company has a communication policy with the shareholders or investors Comply

CIMB Niaga has Policy of Communication with the Shareholders or Investors No. M.02 which has been uploaded to the CIMB Niaga’s website (www.cimbniaga.co.id).

The communication carried out by the Bank are through the implementation of the GMS, Public Expose, Analyst Presentation, publication of Quarterly and Annual Financial Reports, as well as conducting accurate and timely disclosure of information. CIMB Niaga also provides information on head office and branch location address, e-mail addresses and telephone numbers both on the website and the Annual Report, access to Social Media (Facebook, Twitter, Instagram) and Call Center as a means for shareholders and investors to easily communicate with Bank.
2.2 The Public company discloses its communication policy with the shareholders or investors on the website Comply

Policy of Communication with Shareholders or Investors of CIMB Niaga No. M.02 has been uploaded to the CIMB Niaga’s website (www.cimbniaga.co.id).
Board of Commissioners’ Function and Role Principle 3
Strengthen the Board of Commissioners Membership and Composition
3.1 Determination of the number of Board of Commissioners’ members shall consider the condition of the Public Company Comply

CIMB Niaga has a Policy and Procedure for the Nomination, Appointment, Replacement and/or Dismissal of Members of the Board of Commissioners, the Board of Directors and the Committees under the Board of Commissioners as a guideline for the Nomination and Remuneration Committee in the nomination process of the members of the Board of Commissioners of CIMB Niaga by considering the needs,conditions and abilities of the Bank.

As of December 2019, the Board of Commissioners of the Bank consists of 8 (eight) people, where 4 of them (50%) were Independent Commissioners. Total members of the Board of Commissioners does not exceed the total members of the Board of Directors.
3.2 Determination on the composition of the members of the Board of Commissioners considers the diversity, expertise, knowledge and experience required. Comply

The Board of Commissioners of CIMB Niaga has a diverse backgrounds in terms of expertise/education, knowledge, experience and citizenship that aims to support the development of the Bank's business. This shown in the profiles of each member of the Board of Commissioners.
Principle 4
Improve the Quality of the Board of Commissioners Duties and Responsibilities performance
4.1 The Board of Commissioners has a self-assessment policy to evaluate its performance. Comply

The performance assesment policies of the Board of Commissioners and the Committees under the Board of Commissioners are set out in the Appendix of the Nomination and Remuneration Committee Charter, which can be accessed through the CIMB Niaga’s website (www. cimbniaga.co.id).
4.2 The self-assessment policy on the Board of Commissioners performance is disclosed in the Annual Report of the Public Company Comply

The performance assesment policy of the Board of Commissioners is set out in the Appendix of the Nomination and Remuneration Committee Charter, and the results of the assessment is disclosed in the Corporate Governance Report section of this Annual Report.
4.3 The Board of Commissioners has a policy related to resignation of the Board of Commissioner’s members if such member is involved in financial crimes Comply

The Board of Commissioners of the CIMB Niaga’s Charter (point XI.4.) has stipulated that members of the Board of Commissioners who are involved in financial crimes and/ or other criminal offenses are required to resign from their positions.
4.4 The Board of Commissioners or the Nomination and Remuneration Committee shall prepare the succession policy in the nomination process of the Board of Directors’ members Comply

The succession policy has been stipulated in the Nomination and Remuneration Committee Charter and the Policy of Nomination of Members of the Board of Commissioners, the Board of Directors and Committees under the Board of Commissioners as well as disclosed in the Nomination and Remuneration Committee's Report in this Annual Report.
Board of Directors Function and Role Principle 5
Strengthen the Board of Directors Membership and Composition
5.1 Determination of the number of Board of Directors’ members shall considers the Public Company condition and effectiveness of decision making Comply

CIMB Niaga has a Policy and Procedure for the Nomination, Appointment, Replacement and/or Dismissal of Members of the Board of Commissioners, the Board of Directors and the Committees under the Board of Commissioners as a guideline for the Nomination and Remuneration Committee in the nomination process of the members of the Board of Directors of CIMB Niaga by considering financial condition and ability of the Bank as well as organizational needs and complexity of the Bank as the second largest private bank in Indonesia.

As of December 2019, the Board of Directors of the Bank consists of 11 (eleven) people. The total members of the Board of Directors is more than the total members of the Board of Commissioners.
5.2 Determination on the composition of the members of the Board of Directors’ considers the diversity, expertise, knowledge, and experience required Comply

The Board of Directors of CIMB Niaga has a diverse background in terms of expertise/education, knowledge and experience. This shown in the profiles of each member of the Board of Directors. The diversity and number of Board of Directors are required in order to provide the best possible solution for the Bank, according to the Bank’s needs, size and business complexity.
5.3 Members of the Board of Directors responsible for accounting or finance have accounting expertise and/or knowledge Comply

The Director of Finance & SPAPM of CIMB Niaga who is in charge of accounting and finance is Mr. Lee Kai Kwong. He holds a Bachelor of Science (Fin) from the University of Pennsylvania, USA and previously served as Senior Managing Director - Regional Head of Consumer Business Planning & Analysis at CIMB Bank Malaysia, and has held various positions in the field of Finance. Mr. Lee Kai Kwong meets the criteria of having expertise and/or knowledge in accounting and/or finance.
Principle 6
Improve the Quality of the Board of Directors Duties and Responsibilities performance
6.1 The Board of Directors has a self- assessment policy to evaluate its own performance. Comply

The performance assesment policies of the Board of Directors is set out in the Appendix of the Nomination and Remuneration Committee Charter, which can be accessed through the CIMB Niaga’s website (www.cimbniaga.co.id).
6.2 The self-assessment policy on the Board of Directors performance is disclosed in the Annual Report of the Public Company Comply

The performance assessment policy of the Board of Directors is set out in the Appendix of the Nomination and Remuneration Committee Charter, and the results of the assessment is disclosed in the Corporate Governance Report section of this Annual Report.
6.3 TThe Board of Directors has a policy related to resignation of the Board of Directors’ members if such member is involved in financial crimes Comply

The Board of Directors of CIMB Niaga’s Charter of the CIMB Niaga Directors (point XI.4.) has stipulated that members of the Board of Directors who are involved in financial crimes and/or other criminal offenses are required to resign from their positions.
Stakeholders Participation Principle 7
Improving Corporate Governance through Stakeholders Participation
7.1 The Public company has a policy to prevent insider trading Comply

To prevent Insider Trading, CIMB Niaga has Conflict Management Policy that has been uploaded to the CIMB Niaga’s website (www.cimbniaga.co.id).

This policy establishes the rules, identify, reduce and manage any potential conflicts of interest that may arise within the Bank as a result of activities carried out by the Bank's business units that enable them to obtain information about the Bank, Bank’s customers and the CIMB Group
7.2 The Public Company has an anti- corruption and antifraud policy Comply

CIMB Niaga has Anti-Corruption Policy No. M.11 and Anti-Fraud Policy No. E.07 uploaded to the CIMB Niaga’s website (www.cimbniaga.co.id).

The Anti-Corruption Policy is intended to provide information and guidance for those working for and on behalf of the Bank, on how to recognize, raise concern and deal with corruption issues.

The Anti Fraud Policy regulates the framework, governance and implementation of anti-fraud strategy which are implemented through 4 pillars namely prevention, detection, investigation and supervision.

Further explanation regarding the Anti-Corruption Policy and Anti-Fraud Policy is disclosed in this Annual Report.
7.3 The Public Company has a suppliers or vendors selection and capability improvement policy Comply

CIMB Niaga has a Goods and Services Procurement Policy No. E.04.A.06 and Goods and Services Procurement Procedure No. E.04.A.06.P.01 which has been uploaded to the CIMB Niaga’s website (www.cimbniaga.co.id) and disclosed further in this Annual Report.

The CIMB Niaga Code of Ethics & Conduct also regulates relationships with suppliers, vendors and consultants (partners) in collaboration with the Bank, including objective evaluations, prohibitions on receiving compensation from partners, partner compliance with the Bank's Code of Ethics & Conduct and consultation and lobbying with partners.
7.4 The Public Company has a policy on the fulfillment of creditor’s rights Comply

CIMB Niaga has a Policy of the Fullfillment of Creditor Rights No. M.05 which has been uploaded on the CIMB Niaga’s website (www.cimbniaga.co.id) and disclosed further in this Annual Report.

This policy regulates that CIMB Niaga shall apply and respect to the rights of creditors through equal treatment to all creditors, exercising their rights and obligations in a timely manner with no hidden information by the Bank.
7.5 The Public Company has a whistleblowing system policy Comply

CIMB Niaga has a Whistleblowing System Policy No. E.08 which has been uploaded on the CIMB Niaga’s website (www.cimbniaga.co.id) and disclosed further in this Annual Report.
7.6 The Public Company has a long-term incentive policy for the Board of Directors and employees Comply

CIMB Niaga has a Risk-based Remuneration Policy which stipulated the a long-term incentive policy for the Board of Directors and employees considered as Material Risk Taker (MRT)

Futher explanation regarding the Remuneration Policy is disclosed in this Annual Report.
Information Disclosure Principle 8
Improvement on the Information Disclosure
8.1 The Public Company benefits from the use of broader information technology other than website as information disclosure channel. Comply

In addition to website, CIMB Niaga also utilizes other information technology such as phone banking, radio, printed media and social media (such as Instagram, Facebook, Twitter, Youtube dan Google+) as media channels for information disclosure.

Further information regarding the Information and Corporate Data Access is disclosed in this Annual Report.
8.2 The Annual Report of the Public Company discloses share ownership of at least 5% (five percent), other than disclosure of ultimate shareholders of the Public Company through major and controlling shareholders Comply

CIMB Niaga has no shareholders own 5% of the shares other than Ultimate Shareholders (CIMB Group) as disclosed in the Corporate Profile section in this Annual Report.