Page 54 - CCB_Annual Report_2022

54 Corporate Governance Statement
During 2022, the Committee reviewed
regular reports from management
assessing the adequacy of the allowance
for credit impairment losses. These
reports assessed the adequacy of historic
provisions against subsequent recoveries,
the planned recovery strategies for
individual bad debt cases, reviewed
management’s governance arrangements
over the adequacy of provisions as well as
the governance over impairment models
and benchmarked the Bank’s metrics
against other banks.
The Committee also reviewed and
challenged the Bank’s effective interest
rate assumptions and model outputs
considering the Bank’s approach to
early repayment charges as well as
reviewing historic performance against
future forecasts.
The Audit Committee appraises the
performance of the internal audit function
and their continued independence. The
Committee has assessed internal audit
resources and is satisfied that these are
appropriate to fulfil their responsibilities.
The Committee reviews the Bank’s
external audit strategy including the
appointment of the external auditors and
approval of the audit fees.
The Audit Committee also considered the
output of work undertaken to embed a
Regulatory Reporting Framework within
the Bank that established a more mature
framework for governance and oversight
of regulatory reporting undertaken by
the Bank.
The Bank’s external auditors,
PricewaterhouseCoopers LLP (PwC),
were appointed in 2022 following a
tender process. The Audit Committee
has received a report from PwC
confirming their independence, which
the Audit Committee has considered and
concluded that PwC remain independent
and effective as the external auditor.
PwC verified the Bank’s 2022 interim
earnings and provided an opinion on
our country-by-country reporting.
These processes were audit related
non-audit services. These services were
approved by the Audit Committee albeit
the threat to audit independence is
clearly insignificant.
Performance
& Remuneration
Committee report
Membership and operation of
the Committee
The Performance & Remuneration
Committee is chaired by Caroline Fawcett
and its members in 2022 included Patrick
Newberry (Chair of Board), Tim Harvey-
Samuel (Shareholder Representative),
Christiane Wuillamie (Shareholder
Representative) and Nick Treble (Chair
of Risk Committee). The Chair of the
Audit Committee attends meetings of the
Performance & Remuneration Committee
from time to time to ensure alignment
between the work of the Performance &
Remuneration Committee and the Audit
Committee. Performance & Remuneration
Committee meetings are also attended
by the Chief Executive Officer, the Chief
People Officer and the Company Secretary.
The Chief Risk Officer attends annually
to present his views on the Executives’
management of risk and performance
against the Senior Management Regime
requirements and company framework.
No members or attendees participate in the
discussion of issues directly affecting their
own remuneration. The Committee invites
specialist external advisors to attend at least
annually to support their work and educate
on best practice.
The Committee is responsible for
reviewing and approving the remuneration
and performance arrangements at the
Bank, including reviewing the Bank’s
remuneration policy to ensure that it
remains up to date and consistent with
the relevant requirements of the Financial
Conduct Authority (FCA) remuneration
code (SYSC 19D) and the Prudential
Regulation Authority (PRA) rulebook,
as well as supporting the business
strategy and values of the Bank. In doing
this, it oversees the performance and
remuneration of the Chair and members
of the Executive. Remuneration of NEDs
is the responsibility of the Shareholders in
consultation with the Chair of Board.
The Performance & Remuneration
Committee met three times during 2022.
55
Remuneration package were able to review and confirm the Bank’s
risk-focused remuneration approach,
The annual pay review for all staff in
which holds individuals to account for
2022 made increases totalling 3% of total
their conduct and competence. ESG
salaries. In February 2022 the Committee
and Diversity metrics had been included
agreed to change the benefits package
in variable schemes for 2022 and the
to make it fairer across all levels in the Committee agreed to add additional
Bank, resulting in the same benefits being requirements to the performance
available to all colleagues from the start balanced scorecard, including linking
of their employment regardless of their remuneration to embedding the Consumer
grade or job type. At the same time, the Duty principles.
Bank was able to offer additional salary
sacrifice schemes for pension contributions Socio‑economic Impact
and electric car hire as well as increasing
annual holiday entitlement to 30 days The Committee has been mindful
for everyone. throughout 2022 of the socio-economic
climate and its impact on staff’s wellbeing,
Variable Pay working arrangements and performance.
Supporting the Bank’s hybrid working
During the year, the Committee reviewed model with colleagues dividing their
and approved payment of the Bank’s profit time between office and home working,
share scheme, sales and executive bonus the Committee has pledged to ensure
schemes based upon agreed metrics and that there is no bias in remuneration
performance criteria, as well as upon decisions based on individual’s working
advice from the Bank’s Risk function. arrangements and to ensure that lower
In total, it approved payment equalling
£2,214k under these schemes; £711k being paid colleagues are supported during
paid under the profit share scheme which periods of high inflation. In July 2022, the
most colleagues are part of, £270k under Committee awarded a one-off cost of
the Sales bonus scheme and £1,233k under living payment of £1,000 for all colleagues
the executive bonus scheme. It approved below Executive Committee members.
continuation of these schemes, agreeing In September 2022, the Committee
participants and additional requirements for supported a pyramid approach to 2023
2023 to the performance criteria required annual pay review process, which means
for each scheme. that the Bank’s lowest paid colleagues will
receive the highest percentage increases
Regulatory Requirements in April 2023. The levels within the pyramid
range from 5–11% and this means that
The Committee’s review of the FCA letter 40% of colleagues will get an increase
to the Chair of Remuneration Committee equal to 11%.
confirmed alignment between the FCA’s The Bank’s remuneration policy is included
and the Bank’s areas of focus around on pages 61 – 69.
remuneration, and as such, the Committee