The Case Study - Seylan Bank

Seylan Bank PLC Annual Report 2009 99The board focused much of their attentionon the following during 2009 in order to revive theBank’s operations and bring it to a point of stabilityas well as to promote and promulgate a productivework culture within the Bank:(A) Re-evaluation of lending criteria in terms ofcredit appraisals, approvals, collateral, singleborrower limits, monitoring and follow up.(B) Non-performing loan classification andincome recognition: Strict compliancewith CBSL guidelines, reversal of interestrecognised, revaluation of collateral and loanloss provisions etc.(C) Reviewing and revising delegated authority ofline Management for lending based on pastloan failures and officers’ credit expertise.(D) Setting out delegated authority for procurement,supplies and administration.(E) Human resources areas - comprehensiverevamping of HR policies includingimplementation of Disciplinary Code, StaffPromotion and Transfer and Rotation Policy,Retention Policy, Recruitment Policy andother policies on performance, training andsecondment.(F) Strategic Plan and reorganisation.All the board subcommittees were reconstitutedviz. Audit Committee, Credit Committee, IntegratedRisk Management Committee and NominationsCommittee. Terms of reference for each of theCommittees were formulated/revised and approved bythe new board.New committees were also formed viz. StrategicPlanning, Sustainability and Marketing and ProductDevelopment Committees which commenced theiractivities in 2010.All subcommittees have met for a minimumof two meetings for the year except for theNominations Committee. The Audit Committee hasmet 7 times during the year.Upon the completion of the Central Bankassisted re-capitalisation process of the Bank, fouradditional directors were appointed to the board inNovember 2009 and one director in January 2010.With the appointment of the additional directors,the board restructured the board subcommittees.A Strategic Planning Committee of the board wasalso formed to give further impetus to the effectiveimplementation of the Strategic Plan. All directorsare members of this Committee which had its firstmeeting in January 2010.OTHER ACTIONS TAKEN /IMPROVEMENTSto be EFFECTED IN FUTUREAll new appointments made to the board in 2009were as a result of the re-capitalisation processundergone by the Bank which concluded in November2009 and as such the Nominations Committee hasnot focused its attention during 2009 towards havinga formal board approved procedure for the selectionof/recommendation of new directors to the board.This will be put in place in 2010.Further, in carrying out the board’sresponsibility of implementing succession strategyfor the CEO and Key Management Personnel(KMPs), the Nominations Committee is currently inthe process of working out a succession plan forthe CEO and the KMPs of the Bank.