NTUC Income AR 2019

CORPORATE GOVERNANCE The HRRC met four times during the year. The key areas reviewed were the remuneration framework, remuneration of the senior management team, development plans for senior management, alignment to corporate governance and review of the social impact indicators and staff engagement programs. During the course of the year, the HRRC also conducted interviews of candidates for senior management appointments. The Corporate Governance Guidelines advocate the adoption of the Principles for Sound Compensation Practices and Implementation Standards issued by the Financial Stability Board (FSB) which aim to reduce incentives that encourage excessive risk taking. The HRRC has reviewed the Co-operative’s compensation practices to ensure that compensation is aligned with prudent risk taking, effective supervisory oversight and is market competitive . Digital & Technology Committee The Digital & Technology Committee (DTC) comprises five members as follows: Chairperson Choong Tuck Oon Members Han Soon Lang (external member) Grace Ho (external member) Chak Kong Soon (external member) Jixun Foo (external member) The key duties and responsibilities of the DTC are to: • Provide oversight on major IT programs and investment • Provide advice on strategies related to digital transformation, technology architecture and technology- related innovations • Monitor and review emerging trends in digitisation and technologies that may affect Income’s strategy, including new developments in fintech and insurtech • Review specific technology risks as requested by the RMC. These will include cyber, IT resilience and IT security. The outcome of the review will be updated to the RMC. • Highlight and bring to the attention of the Board any matters as the DTC deems appropriate. RELATED PARTY TRANSACTIONS POLICY AND PROCESS The Related Party Transactions Policy of the Co-operative provides guidance and direction on the identification and approval of related party transactions. The policy prohibits all related party transactions, unless approved or ratified by the Board, or considered pre-approved as outlined in the policy. On a quarterly basis, the management reports to the AC and Board any significant related party transactions that are identified and these transactions are reviewed at the AC and Board meetings. REMUNERATION POLICY Employees’ Remuneration The Co-operative’s policy is to remunerate its employees at competitive and appropriate levels, commensurate with their performance and contribution. It seeks to attract, motivate, reward and retain quality employees and foster a performance-oriented culture across the organisation. The total compensation package for employees comprises basic salary, fixed and variable bonuses, as well as other staff benefits. The approximate mix of remuneration of fixed and variable is, on average, 85% – 15% for employees and managers. For senior management, the approximate mix is about 53% – 47%. In addition, a retention plan is provided for eligible senior management members. In order to ensure that its remuneration package is competitive, the Co-operative regularly reviews its base salary ranges and benefits package versus market data. Each job is graded and base salary ranges are established (by using the market median as a midpoint guide) for each respective grade. ANNUAL REPORT 2019 27