Cenbank allows bank audit committees to run NRC activities

The Audit Committee of the banks will be able to conduct operations of the Nomination and Remuneration Committee (NRC) from now on, according to a central bank circular issued today (13 May).

As per the Bank Company Act, 1991, there is no scope to form temporary committees or subcommittees except an executive committee, an audit committee and a risk management committee.

Hence, the NRC activities should be ratified by the audit committee in the next board meeting, the Bangladesh Bank said in a circular sent to the chairman, board of directors and all managing directors of all scheduled banks.

The NRC is a specialised committee usually found within the structure of a corporate board of directors.

It plays a crucial role in ensuring that the company's leadership is both well-qualified and fairly compensated, which is essential for the company's long-term success and the interests of its shareholders.

As per the Corporate Governance Code 2018 issued by the Bangladesh Securities and Exchange Commission, the formation of an NRC was specified for the capital market and registered companies.

According to the code, the NRC shall assist the board in formulating the nomination criteria or policy for determining qualifications, positive attributes, experience and independence of directors and top-level executives. It shall also form a policy for the formal process of considering the remuneration of directors and top-level executives.

Appointment or recruitment, determining responsibilities, salary and allowances where applicable, bonus and other benefits will be as per central bank circulars for top officials – bank or company director, independent director, managing director or chief executive officer etc.

But any official below these ranks will have their duties, salaries and other benefits determined per the bank's NRC.