Commercial Bank

Management

PRACTICAL 1 – Corporate Governance

Ram Prasath PGP/23/224

Vishwath S PGP/23/248
Prem Chandar S PGP/23/408
Introduction:
India is a nation on the move. The aspirations and efforts of over 135 crore Indians drive the
Indian growth story. At ICICI Bank, we have a rich legacy of partnering the nation and our fellow
citizens in their growth and progress. As a large provider of financial services, we endeavor to enable
the dreams of every Indian by constantly innovating our products and services. As a responsible
corporate citizen, we enable underprivileged Indians to transform their lives, conduct our operations
in an environment-friendly manner and maintain the highest standards of corporate governance in our
business.

Structure:

Governance Philosophy:
At ICICI Bank, we are committed to maintain the highest standards of governance in the
conduct of our business and continuously strive to create lasting value for all our stakeholders. We
focus on maintaining comprehensive compliance with the laws, rules and regulations that govern our
business and promote a culture of accountability, transparency and ethical conduct across the Bank.

Competency and Diversity Matrix of the Board of Directors:

 The corporate governance framework at ICICI Bank is based on an effective independent
Board, the separation of the Board’s supervisory role from the executive management and the
constitution of Board Committees to oversee critical areas.
 Independent Directors constitute an overwhelming majority on most Board Committees.
 The Chairman of the Board is an Independent Director. Most Board Committees are chaired
by Independent Directors too.
 Composition of the Board and Committees fulfil all applicable regulatory and legal
requirements
“Anchor Role of the Board Governance, Remuneration and Nomination Committee
(BGR&NC) in Preserving and Enhancing Governance

Beyond the critical role played in recommending Board nominations including

selection of Independent Directors, supporting optimal Board and Senior Management composition
and other statutory duties that it performs and delivers, the distinctive feature of the BGR&NC of the
Bank is its focus to achieve alignment of compensation philosophy with prudent risk taking. Under its
guidance, a regulatorily aligned Compensation Policy has been implemented, which is intended to
drive meritocracy within the framework of prudent risk management. This approach has been
incorporated in the Compensation Policy.

The key elements of the Policy are:

 Effective Governance of Compensation

 Alignment of compensation philosophy with Prudent Risk taking

Effective Governance of Compensation:

Key Performance Indicators (KPIs) for Whole time Directors (WTDs) and equivalent positions, along
with the organizational performance norms for bonus based on the financial and strategic plan, are
approved by the Board. The KPIs include both quantitative and qualitative aspects. The BGR&NC
assesses organizational performance and based on its assessment, it makes recommendations to the
Board regarding compensation for WTDs, senior management and equivalent positions and bonus for
employees, including senior management and key management personnel.

Alignment of compensation philosophy with prudent risk taking:

The Bank seeks to achieve a prudent mix of fixed and variable pay, with a higher
proportion of variable pay at senior levels and no guaranteed bonuses. Compensation is
sought to be aligned to both financial and non-financial indicators of performance including
aspects like risk management and customer service. In addition, the Bank has an employee
stock option scheme aimed at aligning compensation to long term performance through stock
option grants that vest over a period of time.
The Board approves the risk framework for the Bank. The business activities of the Bank are
undertaken within this framework to achieve the financial plan. The risk framework includes
the Bank’s risk appetite, limits framework and policies and procedures governing various
types of risk. KPIs of WTDs and employees incorporate relevant risk management related
aspects. For example, in addition to performance targets in areas such as risk calibrated core
operating profit (profit before provisions and tax excluding treasury income), performance
indicators include aspects such as asset quality. The BGR&NC takes into consideration all
these aspects while assessing organisational and individual performance and making
compensation-related recommendations to the Board.

Framework:

The Bank is committed to socially responsible conduct and ensure highest standards of integrity and
ethics in its engagement with stakeholders, including customers, shareholders, employees and society.
The Bank follows a no-discrimination policy towards employees and has a strong mechanism for
dealing with complaints on harassment or discrimination. It has special policies for its women
employees extending support to meet their life-stage needs. The Bank’s relationship with customers is
based on the principle of “Fair to Bank, Fair to Customer” and strives to ensure fair features and
pricing in the products and follows strong governance standards in addressing customer complaints
and redressal.
Skills/expertise/competence of the Board of Directors:
The Bank has identified the core skills/expertise/ competence of the Board of Directors as
required under Section 10A(2)(a) of the Banking Regulation Act, 1949 in the context of its
business(s) and the sectors(s) for it to function effectively and has been in compliance with the same.
The details of the core skills/expertise/competence possessed by the existing directors of the Bank is
detailed as under: Name of Directors
 Girish Chandra Chaturvedi - Agriculture and rural economy, Banking, Economics and
Business Management
 Hari L. Mundra - Banking, Finance, Corporate Law, Business Strategy, Economist, General
Management, Legal, Management and Taxation
 Lalit Kumar Chandel - Banking, Insurance, Capital Markets, External Assistance, Agriculture
and Rural Development, Power, Irrigation and Health
 S. Madhavan - Accountancy, Economics, Finance, Law, Information Technology, Human
Resources, Risk Management and Business Management
 Neelam Dhawan - Information Technology and Business Management
 Radhakrishnan Nair -Accountancy, Agriculture and Rural Economy, Banking, Law, Co-
operation, Risk Management, Business Management Economics & Finance
 Rama Bijapurkar - Business Management and Marketing
 B. Sriram - Banking and Finance Uday Chitale Accounts, Finance and Alternate Dispute
Resolution (ADR) Specialist
 Anup Bagchi - Retail & Rural and Inclusive Banking
 Sandeep Bakhshi - Finance, Banking and Insurance
 Vishakha Mulye - Banking and Finance

ICICI Bank has a broad-based Board of Directors, constituted in compliance with the
Banking Regulation Act, 1949, the Companies Act, 2013 and the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in accordance with
good corporate governance practices. The Board functions either as a full Board or through various
committees constituted to oversee specific operational areas. The Board of the Bank at March 31,
2020 consisted of twelve Directors, out of which eight were Independent Directors, one was a
Government Nominee Director and three were Executive Directors. There were eight meetings of the
Board during the year – May 6, June 28, July 27, September 19 and October 26 in 2019 and January
25, March 6 and March 12 in 2020. There were no inter-se relationships between any of the Directors.