Good Governance
Good governance is the core to manage Bayon Credit Plc. to be transparent and to have strong business operations and market competition. Based on the understanding of the importance of this kind of good governance, Bayon Credit Plc. has paid close attention to the quality and promote good governance to strengthen the quality of internal control management.
1. Working Culture
Working culture is a key factor in driving the business operations of the organization towards achieving the strategic plan which has already been set by the Board of Directors. All employees must have the knowledge, skills, ethics, professional skill, and standards of working behavior of employees at all levels following the requirements of the institution. The institution has set specific quality standards to provide services to customers both inside and outside the institution as a priority and must respond to customers quickly. To achieve the above aspirations, the institution has established a coordinated internal process arrangement between each relevant department on the provision of systematic mutual support services that ensures efficiency and effectiveness. Less time-consuming work, state of the art technology by focusing on the use of digital instead of using manual processing and providing good results, which within the institution is called Ecosystem.
Training and strengthening risk management and compliance remain a priority to maintain a good work culture unless all executives within the institution who work in the same department have the same mindset (It means on the same page) has the same mode of operation and smooth operation. To be effective and have good governance in risk management, the Human Resource Department has developed a year-round training plan focusing on training as follows:
- Mandatory Training: This training is required for all staff to participate in the training and organized annually on the training of risk management, professional ethics, and compliance with the regulation (Code of Conduct) that is set by the institution.
- Continuous Professional Development (CPD) training is provided to regular staff at least twice times a year.
Integrated Approach and Work Consistency are work approaches that the organization adopts and is a tradition of work that is always practiced in the organization. All relevant departments are invited to suggest or initiate any ideas in line with their respective functions in any meeting or discussion to select the best solution or idea. In addition, compliance and risk management culture is the most important element in maintaining success in risk management and compliance. The institution believes that if there’s no compliance and risk management culture, the institution will face serious problems, especially institution will have difficulty in making the risk management and execution work successful.
2. The core of Good Governance
The elements that determine the success of improving good governance in Bayon Credit Plc. have identified the following key elements:
- Efficiency : All departments have clear work plans, goals, and use the available resources to achieve the goals and plans set. It is the commitment of the institution as well as all employees who are related.
- Participation The institution encourages employees at all levels in the business workflow of institution to participate, advise and improve in this regard, the institution has implemented the Speak up the culture of communication and to communicate between the management team and staff to raise awareness of issues that are happening from all parts in the institution. Intimidating or discouraging employees from expressing their opinions are strictly prohibited. For who misbehaves or infringe are punished by the existing policies of the institution.
- Transparency It defines as a clear mechanism for providing and sharing information related to risk management in the institution with relevant staff so that they’re understanding of current issues as well as measures to address those issues.
- Accountability It means to create and motivate employees to be responsible in their work and earn their job satisfaction as well as take the initiative to work. For this purpose, Human Resources Department plays an active role in attracting and motivating employees to have the highest level of accountability in their work that is they dare to dedicate extra time to work and have a strong passion to complete a plan which they have set.
- Consensus It means to encourage a lively discussion from all relevant staff to conduct comparative studies and find new ideas or solutions that have better and acceptable results from all stakeholders to avoid coercion and manage who are employees in the relevant department.
- Equity The institution encourages all employees to participate in the work with all their physical and mental strength and to evaluate their work results by the actual work results.
- Responsiveness The institution encourages and requires all employees to serve customers with high attention and accountability to work at all times. Employees aren’t allowed to leave their work undone, which causes obstruction and unable to achieve the plan set.
I. Framework
Bayon Credit Plc. has adopted an appropriate framework by the regulatory requirement of the National Bank of Cambodia. Role structure and functions are organized as follows:
1. Board of Directors
The overall responsibilities of the Board of Directors, as defined in the Terms of Reference of the Board of Directors and other responsibilities include: Defined in specific policies, such as operational risk management policy, liquidity, internal control, credit, etc. To manage effectively and perform the functions of the Board of Directors and to comply with the regulations of the National Bank of Cambodia, the institution has established the Audit Committee in charge of the audit work, including internal and external audit work. The other committee is the Risk Committee, which is responsible for risk management.
2. Senior management
The senior management leads by the Chief Executive Officer and appointed by the board of directors of the institution. The Chief Executive Officer appoints and leads the executive committee and is responsible for the important duties in the following:
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- Define strategies and performance orientations to achieve results by the strategies set out.
- Monitor performance is the mobilization and makes use of the available resources to carry out the work.
- Risk management is the identification, evaluation, provision of mitigation mechanisms or risk mitigation measures of which the institution is facing the challenge or consequence.
- Compliance is to ensure that the institution complies with all laws and regulations related to its business operations.
3. General Department of Risk and Compliance
The General Department of Risk and Compliance is headed by Chief Risk and Compliance Officer (CRCO) and is appointed by the Risk Committee, which acts as a secretariat for the Risk Committee to oversee the performance of the Executive Committee. A Chief Risk and Compliance Officer is a person who reports directly to the Risk Committee quarterly. At the same time, CRCO shall report to the Executive Committee about the results of the report, as well as convene meetings with the relevant departments to determine the appropriate mechanism or framework or governance for the issues identified.
4. Separation of roles and responsibilities
Monitoring functions included Risk management and compliance functions under the control of the Chief Risk and Compliance Officer. The organization and function of these two functions are not under the control and control of the Executive Committee. For this purpose, to strengthen the efficiency of internal management in the institution, the distinction between executive and control functions is clearly defined as defined by the institution’s policy.
5. Executive Committee
For this purpose, the Executive Committee is headed by a Chief Executive Officer and a member of the director or director of all relevant departments that oversee the business operations of the entire institution (First Line of Defense). The Executive Committee shall ensure that the provision of customer service, both internal and external, promptly and by the technical standards set in Policies and Procedure. In addition, the institution has established management-level committees to provide additional technical assistance to the Executive Committee on key tasks to ensure quality and efficiency. These committees included:
- IT Steering Committee-ITSC
- Credit Committee
- Risk and Compliance Committee
- Human Resource Committee
These committees are formed per the terms of reference of the institution. The main roles and functions of those committees are clearly defined. In addition, each committee has the right to request the establishment of a working group consisting of professional staff from all inter-departmental experts to conduct detailed and technical studies to assist in the implementation of the work to provide technical assistance to those committees. That committee will be dissolved when the work is completed. The establishment of the working group shall be made by the decision of the Chief Executive Officer based on all director’s requests and by the spirit of the meeting.
6. Control Function (Second Line of Defense)
As mentioned above, the process of managing and controlling the business operations is carried out by two different organs, in which the execution and management of the business process, including the provision of customer service, is under the responsibility of the executive committee. To oversee, monitor, and advise on standards and governance is under the General Department of Risk and Compliance. In this context, Chief Risk and Compliance Officer shall perform its function by preparing an annual inspection plan based on the results of the risk assessment to measure and evaluate the performance of the entire Executive Committee independently and impartially. By the professional standards by local and international professional institutions or associations, especially the guardianship authority. The performance of this oversight function is carried out in good faith and without any indication or order from the Executive Committee.
7. Periodic Monitoring Function (Third Line of Defense)
The audit function is the review or periodic monitoring function which provides the final and objective assurance that the executive function and control function (Second line of defense) is performing their job and their duties by policies and procedures regularly. In case, there are some faults in both organs, an audit function will report the findings and make recommendations for improvement to the relevant stockholders. The audit function will assess and identify high-risk areas and constitute an annual appropriate auditing plan on the performance of stakeholders.
8. Check and Balance Principle
The concepts of adapting the three lines of defenses are designed to ensure a balance of authority and role performance in a transparent, equitable, and efficient manner. The Principle of Check and Balance further promotes the quality of good governance in the institution to be more efficient and effective.
9. Board Policy
In addition, to improve the efficiency of management, the institution has established and promulgated key policies to set standards and to improve guidelines of the risk management and compliance practice. These policies have already been approved by the Board of Directors, including credit policy, internal control policy, compliance policy, operational risk management policy, and liquidity risk management policy.
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