1. © Asian Institute of Chartered Bankers 2014. All rights reserved. The Board’s Role in Human Capital Management and Talent Management Presented by: Rita Benoy Bushon Chief Executive Officer Minority Shareholder Watchdog Group (MSWG)

2. 2 NEED TO SEARCH FOR OPPORTUNITIES IN CHALLENGING LANDSCAPE Stricter banking regulations post GFC Higher capital requirements Higher scrutiny by regulators & stakeholders Talent shortage Lack of domain expertise Challenging economic conditions Rapid changes in technology Higher shareholder expectations More sophisticated customers More mobile workforce Changing demographic structure Complex product offerings Emergence of new wave New product offerings New ways of doing work New businesses emerging Enhanced risk oversight role

3. 3  To act in the best interest of the company with a duty of care and diligence  To ensure company’s prosperity and sustainability for the longer term  To protect company assets  To oversee key risks areas  To oversee talent management, human resource development & succession planning  To manage conflicts of interests and establish clear roles and governance structure

4. 4 ManpowerGroup’s ninth annual Talent Shortage Survey found 36% of employers globally report talent shortages in 2014— the highest percentage in seven years. 1 Finance professionals have ranked among the top 10 hardest jobs to fill for each of the past eight years. 2 In this climate of change, banking and financial institutions need to restructure their workforce as they seek to build the kind of flexibility needed to quickly adapt to economic changes. 1 - ManpowerGroup, The Talent Shortage Continues (2014) 2 - ManpowerGroup – Why Financial Institutions Need A Workforce Strategy

5. 5 Shortage mainly in the Middle and Specialist levels Impact of losing talent at Middle level is significant as substantial amount of time & money invested in training Shortage in Specialist level is critical – areas identified are risk management, IT and Islamic banking Source: IBBM Study on talent and skills requirements for the banking sector in Malaysia June 2014

6. 6 Source: MSWG MALAYSIA-ASEAN CG SURVEY 2014 ItemsTop 5Top 10 Average Board Size10 directors9 directors ED:NINED:INED10%:40%:50%10%:38%:52% INEDs: Average tenure INEDs ≥ 9 years 5 years 12% 6 years 24% Diversity: Non-Malaysian directors Women on Board 15% 12% 13% 12% Skillsets: Professional accountants Finance-related Legal Engineering/Sciences Others 28% 37% 10% 12% 13% 30% 37% 12% 10% 11% Average ED remunerationRM7.2 millionRM5.9 million Average NED remunerationRM338KRM318K Average Chairman remuneration (excluding founders)RM732KRM621K 65% 67%

7. 7 Board Board Succession C-Suite Planning Workforce Planning NRC  Align talent & business strategy  Play active oversight over talent  Set the right tone  Oversee talent-related risks  Gaps & benchmarking  Ensure processes are in place  Monitor talent pipeline to attract, develop & retain talent  Clear & transparent nomination framework  Annual board assessment  Identify gaps & needs  Board diversity (including gender diversity) crucial  Monitor & assess C- Suite talent pipeline  Assess leadership capabilities required in future vs current capabilities  Ensure co has a robust HRD & talent mgt processes  Trends in workforce demographics e.g. diversity, gen differences

8. 8  Talent management is an industry issue  The Board’s oversight role is critical in talent management  Develop a broad talent pool for the industry  Pipeline of accredited professionals for the industry boards and senior management  High-quality continuous education  Your talent strategy is your competitive advantage! THANK YOU