As one of India’s leading housing finance companies, we acknowledge our responsibility to set the right example in the industry as a transparent and pragmatic enterprise. We work to conform with global standards of ethics and integrity to protect stakeholder value over the long term.
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BOARD COMPOSITION AND COMMITTEES OF THE BOARD
The Board comprises 11 members, including six Independent Directors, 4 Non-Executive Directors and one Managing Director as on 31st March 2022.
The Board functions through seven Committees, which have been assigned specific responsibilities. These are the Audit Committee, Risk Management Committee, Credit Committee of the Board, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee and IT Strategy Committee. The Committees except Credit Committee are chaired by an Independent Director.
Our Board of Directors comprises renowned professionals with diverse experience and expertise in banking, financial markets, risk management, regulatory affairs, finance, credit, information technology, human resource management and other domains. We also have IT experts on the Board as Non-Executive/ Independent Directors, given our focus on digitalisation and the associated risks related to cybersecurity, data privacy and infrastructure.
The Board has in-depth understanding of the business model, business processes and business environment. The Board members are regularly updated on relevant topics of interest relating to the Company’s business environment and operations, such as the current state of affairs of the Company and industry growth and outlook, impact of new guidelines issued by the RBI/ SEBI/ MCA.
Board members also participate in seminars on relevant subjects conducted by reputed organisations. Newly appointed Independent Directors undergo a structured orientation/ familiarisation process and also engage with the functional heads to familiarise themselves with their roles and the Company’s operations and the business model.
DIVERSITY IN THE BOARD
We have a well-diversified Board in terms of expertise, domain, academic qualification and industry experience. The Board has one female Independent Director. The average age of the Board is 60 years. The Company has in place a Board Diversity policy, which views performance through the lens of inclusivity.
RESPONSIBILITIES OF THE BOARD
The Board meets as often as necessary, at least quarterly, and as and when requested. The Board is also apprised of the decisions of the Committees on a regular basis. The Board and the Senior Management meet on a quarterly basis, or whenever required. Key discussion points include updates on business, financials, credit appraisal, human resources, regulations, enterprise risk management, and strategy. In addition, the Board meets annually to discuss and approve the business plan of the Company. The Board also engages with the Senior Management through its committees for matters related to delegated areas.
Separate meeting of Independent Directors without the management was also held during the last financial year.
The Risk Management Committee also meets the CRO, and the Audit Committee meets the Internal Audit Head without the presence of the management to ensure the independence of their roles. During the pandemic and even during the last financial year, the Board met virtually. The average attendance at the Board meetings in FY22 was 89%. All Board meetings are attended by all members of the Executive Management. In addition, members of the Senior Management participate in Committee meetings as well in relation to their respective responsibilities.
POLICIES AND FRAMEWORKS FOR ETHICAL CONDUCT
The Board has adopted a Code of Conduct which is applicable and binding on all the Non-Executive Directors, including Independent Directors. The Code of Conduct for Non-Executive Directors is in compliance with Regulation 25 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Code provides guidance on matters related to professional conduct, ethics and governance, while discharging obligations as Directors of the Company. The Board has also adopted a separate Code of Conduct for Executive Directors and the Senior Management.
To ensure a pervasive culture of ethical behaviour, the Board has approved and adopted policies and frameworks that encourage appropriate business conduct. These policies are communicated regularly to the management, employees and other stakeholders. Our corporate governance policies include:
RISK MANAGEMENT FRAMEWORK
Global events have challenged nearly every company, leading to a rethink of assumptions and adaption of strategies to a new operating environment that involves managing major risks with a renewed focus on the safety of people. Our Risk Management Framework, enabled by the effective use of new technologies, has enhanced the organisation’s readiness in responding to COVID-19. The framework helps to identify, assess, respond to and monitor, on a real-time basis, risks that impact business objectives. Risk management is an integral component of the Company Management System. Effective risk management with enhanced use of technology has improved the quality of business decisions.
We have a well established three lines of defense approach.
The key risks that the organisation is exposed to in the course of its business are - Credit Risk, Market Risk and Operational Risk. Given the evolving lending landscape, Liquidity Risk and Cyber Security Risk are also vital. These risks not only have a bearing on our financial strength and operations but also on our reputation. Keeping this in mind, we have put in place Boardapproved risk related policies, whose implementation is supervised by the Executive Risk Monitoring Committee. The Committee monitors the compliance of risk parameters/aggregate exposures with the appetite set by the Board. It ensures that frameworks are established for assessing and managing various risks faced by the Company. Systems are developed to relate risk to the Company‘s capital level. Methods have been instituted to monitor compliance with internal risk management policies and processes. The Committee guides the development of policies, procedures and systems for managing risks. It ensures that these are adequate and appropriate to changing business conditions, the structure and needs of Company and its risk appetite.
We give due importance to prudent lending practices and have put in place suitable measures for risk mitigation, which include verification of credit history from credit information bureaus, personal verification of customer’s business place and residence, inhouse technical and legal verification, conservative loan to value parameters, and insurance coverage. Our Risk Management Framework seeks to minimise adverse impact of risks on the key business objectives and enables us to leverage market opportunities effectively. The Risk Management Committee reviews on a quarterly basis various risks faced by the Company and monitors the measures undertaken to mitigate the same.
ADDITIONAL POLICIES
We have a Whistle-blower policy, which allows all employees to raise concerns on any serious irregularities or violations within the organisation. Through this policy, employees have direct access to the Chairperson of the Audit Committee. We have also put in place a grievance redressal mechanism for customers. There is a robust system to address shareholders’ grievances, wherein they can send their complaints to the Company through dedicated email IDs: investor.services@pnbhousing. com and investor.relations@ pnbhousing.com.
The Compliance and Investor Relations Team keeps track of these emails and resolve shareholders’ complaints accordingly. These email addresses are posted on the Company website and are shared in releases to the stock exchanges. In addition, shareholders can directly approach the registrar and transfer agent (RTA), Link Intime India Pvt. Ltd. We have a Board approved succession planning policy, outsourcing policy, anti-corruption and anti-bribery policy, information security policy, cyber crisis management plan and other statutory policies.
ANTI-MONEY LAUNDERING (AML)
We have a comprehensive Know Your Customer and Anti Money Laundering (AML) policy (based on RBI guidelines/provisions of the Prevention of Money Laundering Act, 2002) duly approved by the Board and incorporating the key elements of Customer Acceptance Policy, Customer Identification Procedures, Risk Management and Monitoring of Transactions. Adherence to the guidelines prescribed in the policy is monitored by us at various stages of the customer lifecycle. We have developed a training module for focused and effective training on anticorruption and AML.
