Corporate Governance

Prudential Group Summary Anti-Bribery and Corruption Policy: covering the giving and acceptance of bribes

Introduction

Prudential values its reputation for ethical behaviour and for financial probity and reliability. It recognises that over and above the commission of any crime, any involvement in bribery will also reflect adversely on its image and reputation. Its aim therefore is to limit its exposure to bribery by:

• Setting out a clear Anti-Bribery & Corruption Policy;

• Training employees so that they can recognise and avoid the use of bribery by themselves and others;

• Encouraging its employees to be vigilant and to report any suspicion of bribery, providing them with suitable channels of communication and ensuring sensitive information is treated appropriately;

Prudential plc absolutely forbids corruption and the paying or receipt of bribes for any purpose.

The Policy

Bribery – Bribery is the offering, promising, giving, solicitation or the receipt or agreement to receive any financial or other advantage, or any other inducement from any person or company, (wherever they are situated and whether they are a public official or body, or a private person or company), by an individual employee, agent or other person or body acting on another’s behalf.

Corruption – Corruption is the abuse of entrusted power for a private gain.

The Group prohibits:

Bribery of or by any person or company, in any jurisdiction, wherever they are situated and whether they are a public official or body or private person or company or by any individual employee, agent or other person or body acting on the Group's behalf in order to

1. gain any commercial, contractual or regulatory advantage for the Group in a way which is unethical or

2. gain any personal advantage, pecuniary or otherwise, for the individual or anyone connected with the individual or

3. induce the improper performance of any function that is of a public nature, connected with a business, performed by a body or performed by a person in the course of their employment.

When acting for the Group, political contributions are not allowed and charitable contributions are allowed only within agreed Corporate schemes and guidelines.

Facilitation payments are any payment made (except where comprised in a lawful and published tariff of general application) as an inducement to secure or expedite the performance of a routine or necessary action to which the payer of the facilitation payment has a legal entitlement. These are not permitted or condoned by the Group.

Further clarification

The Group recognises that market practice varies across the territories in which it does business and what is normal and acceptable in one place may not be in another.

This policy is not meant to prohibit the following practices providing they are customary in a particular market, are proportionate and are properly recorded:

• normal and appropriate hospitality

• the giving of a ceremonial gift on a festival or at another special time

• the use of any recognised fast-track process which is available to all on payment of a fee.

The prevention, detection and reporting of bribery or corruption is the responsibility of all persons within or associated with the Group. Reports can be made confidentially via the confidential reporting hotline of the Group (+44 (0)20 7548 2999) or sent in writing to:

Director of Group Resilience

Prudential plc

12 Arthur Street

London EC4R 9AQ

UNITED KINGDOM

Thailand

Website: www.prudentialspeakout.ethicspoint.com

Toll Free: 1800-014-522

Email: pcahelpline@prudential.com.hk

Enterprise Risk Management: ERM

Risk Management is an essential process of the Company to protect, maintain and support the Company to maximize risk-adjusted returns and to provide a competitive rate of return that supports the profitable growth of its business, while safeguarding the Company’s financial strength. Therefore, management is able to effectively manage the uncertainty according to the situation and reduce the impact and uncertainty on the Company direction, strategies, decision and operation.

The Company implements the Risk Management Policy to promote the effectiveness and efficiency of the Enterprise Risk Management, ensure a sufficient resource allocation and meet insurance obligations. It also helps promote good corporate governance and trustworthiness within the organization and industry.

The risk management process of the Company is comprised of risk identification, risk measurement and assessment, risk management and control, and risk monitoring and reporting.

Asset Liability Management: ALM

Asset and liability management is one of the key responsibilities of Asset and Liability Committee (ALCO), whose role is to monitor, review, and analyze risks that could impact the Company’s capital adequacy, with consideration of risk appetite, economic outlook, implicit product guarantees, policyholders' reasonable expectation and profitability to the Company.

The Company manages duration matching by setting asset duration target to be approximately in line with liability duration to manage sensitivities against future market interest rate movements, and manage the investment cash flows to ensure that they will meet contractual obligations of policyholders.

Underwriting risks

The Company underwrites risks based on the principle of both medical and financial health of customers. There may be other factors to be considered as part of the underwriting process based on occupation and lifestyle of the risks being underwritten. The Company would also apply risk aggregation rules where deemed appropriate. The processes of underwriting are also in line with the reinsurance arrangements of the Company.

Reinsurance management

Reinsurance management is defined as a process of retention versus ceding of risks to the reinsurer. The Company enters into reinsurance arrangements based on risk appetite and to ensure adequate capital management. Risks considered include large risks (individual and portfolio level), concentration risk and emerging health risks. The Company reviews its panel of reinsurers from time to time as well as with the creation of new customer solutions.

Directors’ Selection and appointment

The Company recruits and selects capable candidates based on qualifications by law and regulations, skills, experience, and functional expertise, to replace Directors, who have completed their term, resigned or have been discharged and propose for the approval of Prudential Corporation Asia Officers, the Board of Directors and/or in a shareholders’ meeting as stipulated in the Company’s regulation.

Executive’s Selection and appointment

As for the principles for the hiring of “Senior Management” members for the Company, “Senior Hiring” is defined as the search and recruitment activities for the CEO and CEO’s direct reports. The evaluation and assessment process must be finalized by 2 managers such as the CEO and the Regional Officer. The leadership assessment and/or any additional assessment instrument will be designed by Regional Human Resources and the formal Employment Screening is the responsibility of the Company.

The following standards present a consolidated view of Group Governance Manual requirements in relationship to the Code of Business Conduct applicable to all employees. They are subject to personal attestation each year.

Standard 1 – Financial Crime

• Protecting the business against financial crime is the responsibility of all employees. Employees must complete training on financial crime topics (i.e. anti-bribery & corruption, anti-money laundering & sanctions and fraud prevention).  Failure of employees to meet their requirements outlined in the training or policies (e.g. declaration of gifts and hospitality, offering or accepting a bribe) may result in disciplinary action or even dismissal.

• Employees who know of or suspect money laundering or terrorist financing activities must inform the Money Laundering Reporting Officer (MLRO); for bribery or corruption matters they must inform the Anti-Bribery and Corruption Officer (ABCO); or for fraud matters they must inform the Financial Crime Team.

• Employees must protect the business against tax crimes.

Standard 2 – Conflicts of Interest

• Employees must seek to identify and where possible avoid situations that could result in apparent, potential or actual conflicts of interest.

• Employees are required to complete relevant training on conflicts of interest, notifying their line manager or other relevant parties if they identify a potential conflict so that steps can be taken to manage the situation.

Standard 3 – Information & Dealing

• Employees must adhere to any restrictions imposed upon their securities dealing activities.

• Employees who wish to deal in Prudential securities must follow the Securities Dealing Rules.

• Financial Reporting Employees cannot deal in a closed period. Restricted Employees cannot deal in a closed period and must obtain permission to deal in an open period.

• Employees must escalate breaches relating to information barriers procedures and inside information to CEO.

• Employees should adhere to the Group Information Security Policy. This will help safeguard the information used in all aspects of our business operations, defend the Group from potential impacts and liabilities resulting from unauthorised activity and protect our customer, partners, and fellow employees by preventing others from inappropriately accessing and misusing their personal and business information.

Standard 4 – Communication

• Employees must obtain permission from the relevant communications team before communicating externally on business matters or in any professional capacity through any public medium, including social media channels, and before accepting invitations to speak at conferences or other speaker events. Any form of media enquiry must be immediately referred to the relevant communications team.

• The Group's policy is not to provide endorsement to any third party, and any such requests must be referred to the relevant communications function.

• Employees must not issue internal communications unless authorised by the relevant internal communications function.

• Social media – If employees discover any inaccurate, accusatory or negative comments about the Group online, they are not to respond or engage in the conversation, but report those comments to the relevant communications function.

• Employees must not communicate with City institutions and investors regarding the Group, and any contact from them must be referred immediately to the Director of Investor Relations.

• Employees must not share confidential or competitively sensitive information about the Group, its customers or suppliers with our peers or competitors. If employees receive competitively sensitive information about the Company’s peers or competitors (other than for legitimate purposes), they must immediately tell the Legal team.

Standard 5 – People

• To ensure diversity and inclusion are embedded in the culture of the workplace, eliminating any form of discrimination, employees are expected to provide equality of opportunity for all fellow employees, irrespective of sex, race, age, ethnic origin, marital status, pregnancy and maternity, civil partnership status, any gender re-assignment, religion or belief, sexual orientation, disability or part-time/fixed-term work.

Speak Out

Employees have an individual responsibility to promote appropriate behaviour and corporate values in the workplace.  If employees believe colleagues are not meeting the standards set out in this Code, they should not hesitate to use our Speak Out confidential reporting facility, training for which is mandatory.  Employees can raise potential concerns with the knowledge that such matters will be treated in confidence.  The Group adopts a zero tolerance stance over retaliation against reporters of any concerns through Speak Out.

Reports can be made confidentially via the confidential reporting website or hotline or sent in writing via email per details shown below:

Website: www.prudentialspeakout.ethicspoint.com
Toll Free: 1800-014-522
Email: pcahelpline@prudential.com.hk

The Company establishes standard operating procedures with clear goals and objectives, setting out roles and responsibilities with pre-defined authority limits where necessary, to ensure effective operations of the business. These are reviewed, monitored and assessed regularly to maintain sufficiency of the internal controls. Group-wide Internal Audit provides the independent assessment at least annually to the Audit Committee and Board of Directors.

Board of Directors

The Board has the duty and responsibility to establish good Corporate Governance Framework, strategy and important policies and to ensure that the Company has effective mechanism to control, supervise and monitor the operation of the Company on a regular basis and to ensure that the Company is operated with fairness, transparency and accountability to the stakeholders under the concept of corporate governance and creating long-term value to the Company. The Board of Directors meeting shall be scheduled at least quarterly. Additional meetings may be called to examine and consider such other matters related to the Board of Directors’ responsibilities as the Committee may consider desirable.

Board of Directors consists of 7 members as follows:

_{For more information about Board of Directors, please visit our website https://www.prudential.co.th/corp/prudential-th/en/about-prudential-thailand/management-team/}

Executive Committee

Management team has the duty and responsibility to do the strategic planning and decision-making for the organizations according to the mission, vision and values of the organization, to manage and regular review of operational and financial performance of the business by presenting proposals for the business plans and the achievement, to be responsible for compliance with the Company’s policies and relevant regulations by establishing and monitoring of internal controls and risk management throughout the business. The Executive Committee meeting shall be scheduled at least monthly. Additional meetings may be called to examine and consider such other matters related to the Executive Committee’s responsibilities as the Committee may consider desirable.

Management Team consists of 7 members as follows:

_{For more information about our management structure, please visit our website https://www.prudential.co.th/corp/prudential-th/en/about-prudential-thailand/management-team/}

The Board has established the following Board Approved Committees to assist in the management of the Company’s business and discharge of its duties:
1. Audit Committee
2. Risk Committee
    - Information & Technology Risk Management Committee
3. Asset Liability Committee
4. Investment Committee
5. Customer Committee
6. Product Steering Committee
7. Digital Technology Steering Committee 

1. Audit Committee

The Board of Directors has delegated authority to the Audit Committee to review financial reporting, risk management, compliance and governance frameworks and internal controls to ensure compliance with laws and regulations and meet Group standards. Furthermore, the Audit Committee oversees the assurance work carried out by Group-wide Internal Audit and external audit. A review of the effectiveness of internal controls is carried out by Group-wide Internal Audit, with recommendations provided to the Audit Committee. In turn, the Audit Committee provides oversight over processes developed to address these recommendations in a timely manner. The Audit Committee meeting shall be scheduled at least quarterly. Additional meetings may be called to examine and consider such other matters related to the Audit Committee’s responsibilities as the Committee may consider desirable.

The Audit Committee consists of 4 members including the representatives appointed by the Board of Directors as follows:

2. Risk Committee

The Board of Directors has delegated authority to the Risk Committee to  assist the Board of Directors in providing direction and oversight of the Company overall risk appetite, risk tolerance and strategy, overseeing and advising the Board of Directors on the current and potential future risk exposures of the Company (including regulatory risk), reviewing and approving the risk framework, monitoring its effectiveness and adherence to the various risk policies.The Risk Committee meeting shall be held not less than four times a year. The Chair or Committee members may convene additional meetings at any time to deal with matters within the remit of the Committee.

The Committee shall consist of not less than 5 members, at least 2 of whom, including the Chair, must be independent non-executive directors as follows:

     - Information & Technology Risk Management Committee

The Board of Directors has delegated authority to the Information & Technology Risk Management Committee as a sub-committee of the Risk Committee,  to oversee and ensure the Company manages IT risk, IT security and data security in line with the Company’s direction and regulatory framework, including instances where third-party IT service providers are used.

The Committee consists of 4 members as follows:

3. Asset Liability Committee

The Board of Directors has delegated authority to the Asset Liability Committee (“ALCO”) to exercise direction and oversight over the asset and liability position and its management, including investment management, capital and liquidity management, reinsurance and aspects of inforce product management. The ALCO meeting shall be scheduled at least four times per year. Additional meetings may be called to examine and consider such other matters related to the ALCO’s responsibilities as the Committee may consider desirable.

The Committee consists of at least 3 members as follows:

4. Investment Committee

The Board of Directors has delegated authority to the Investment Committee, reporting directly to the Board of Directors, to establish the Company’s investment framework by setting investment policy and guideline and proposing to be approved by the Company’s Board of Directors. The committee reviews and approves investment plans and investment risk management policies, as well as supervises and monitors the Company’s investment to ensure that they are in line with the overall investment and risk policies, and the provisions of related laws. The committee is also responsible in the areas of governance, transparency and conflicts of interests that may arise from investment activities, as well as to ensure that the Company has adequate system, personnel and information for investment management. The committee shares report the investment performance to the board at least once a year. 

The Investment Committee meeting shall be scheduled at least quarterly. Additional meetings may be called to examine and consider such other matters related to the Investment Committee’s responsibilities as the Committee may consider desirable.

The Committee consists of members as follows:

5. Customer Committee

The Board of Directors has delegated authority to the Customer Committee, to make strategic direction and to manage to elevate customer experience and to build a culture of fair treatment of customers as part of its business operations, and to drive customer-centricity across PLT, which ultimately lead to business growth and sustainability.

The Committee consists of 8 members as follows:

6. Product Steering Committee

The Board of Directors has delegated authority to the Product Steering Committee, to make strategic direction and decisions, and provide oversight and governance on product development and approval process, and ensure business practices, policies and guidelines, and local regulatory requirements are adhered to the product development and approval process.

The Committee consists of 8 members as follows:

7. Digital Technology Steering Committee

The Board of Directors has delegated authority to the Digital Technology Steering Committee, to oversee the uses of  information technology (IT) that is appropriate to its business strategies and the IT usage is flexible as it can respond to any changes in IT and business operations in the future and cyber threat.

The Committee consists of 7 members as follows:

Director’s Remuneration

The Company has established a set of well-defined procedures for setting the directors’ remuneration. Each year, the appropriateness of the remuneration is reviewed with respect to the scope of responsibilities of each director to ensure that the Company’s remuneration is comparable to that of other companies in the same industry. The proposed remuneration is then tabled at the General Meeting of Shareholders for approval. Once approved this will remain effective until a General Meeting of Shareholders determine otherwise. The approved remuneration will only be payable to Non-Executive Directors.

Remuneration for Directors who are also employees is considered on a yearly basis in line with the Company’s employee remuneration policy and principles. The remuneration is aligned with the Company’s objectives in order to support the delivery of the Company’s business plans and strategies; and, complies with the related legislative and regulatory requirement.

Executive’ Remuneration

Total compensation includes salary, short-term and long-term bonus and other benefits that are competitive in the local environment. This is to ensure that senior management remuneration is appropriately positioned against external market salary information. The remuneration policy is geared towards rewarding contribution to the business and must be conscious of internal equity. Rewards should be underpinned by a thorough, involving a detailed annual performance appraisal where the achievements against targets over the prior financial reporting period.