Board’s Conduct of Its Affairs
The Company is headed by an effective Board which oversees the business affairs of the Group. The Board carries out this oversight function by assuming responsibility for effective stewardship and corporate governance of the Company and the Group.
Its principal role and responsibilities include the following:
providing entrepreneurial leadership, setting the overall business strategy, policies and direction for the Company and the Group;
ensuring that the necessary financial and human resources are in place for the Company to meet its objectives;
establishing a framework of prudent and effective controls which enables risks to be assessed and managed, including safeguarding of shareholders’ interests and the Company’s assets;
reviewing Management’s performance;
identifying the key stakeholder groups and recognizing that their perceptions affect the Company’s reputation; and
considering sustainability issues including environmental and social factors as part of the Company’s overall strategy
The Board also sets the Company’s values and standards which are being emphasized regularly to serve as constant reminders to its executives. The Company has a strong corporate culture exemplified by its core values which are set out in the Company’s intranet system and readily accessible by employees.
The Board exercises independent judgment in dealing with the business affairs of the Group and objectively discharges its duties and responsibilities in the interest of the Group. To assist the Board in executing its duties, the Board has delegated specific functions to the following Board committees:
Audit and Risk Committee ("ARC")
Nominating Committee ("NC")
Remuneration Committee ("RC")
Each Board committee reviews the matters that fall within its respective terms of reference and reports its decisions to the Board which endorses and accepts ultimate responsibility on such matters.
In addition, the Company has an Executive Committee (“EXCO”) which is entrusted with the conduct of the Company’s businesses and affairs, in line with the overall strategy set by the Board; and an Executives’ Share Option Scheme (“ESOS”) Committee which assists the Board in administering the Company’s ESOS.
The Company has in place a Corporate Policies and Procedures Handbook which sets out the framework of internal guidelines on matters which require the Board’s approval. During the year, the Board reviewed and approved the business plan and budget, major investments and divestments.
Meetings of the Board and its Committees are scheduled one year ahead. The Board meets at least on a quarterly basis to review, inter alia, the Company’s quarterly results. Additional meetings may be convened on an ad-hoc basis as and when necessary. Where appropriate, decisions are also taken by way of Directors’ Circular Resolutions. As provided in the Company’s Articles of Association, Directors may convene Board meetings by teleconferencing or videoconferencing. During the financial year ended 30 June 2016, the Board held four meetings. The attendance of Directors at meetings of the Board and the Board Committees as well as Annual General Meeting (“AGM”) is set out in the table.
During the year, the Board appointed Mr Raymond Choong as Executive Director and Group President & Chief Executive Officer (“CEO”) with effect from 1 September 2015. Upon his appointment, Mr Choong was furnished with an induction package comprising meeting schedules of the Board and its Committees, the Company’s latest annual report, Corporate Policies and Procedures Handbook, materials on corporate overview such as corporate structure, strategic business units, etc. Visits to operational units of the Group were organised and briefings were provided by the various functional heads. Mr Choong was also given a letter of appointment.
When a Director is appointed to a Board Committee, it is the Company’s practice to provide such Director with a copy of the relevant Terms of Reference and Guidebook for the Committee. New Directors will also be encouraged to attend the Listed Company Director programmes (where appropriate) conducted by the Singapore Institute of Directors (“SID”); and Director Financial Reporting Essentials co-organised by SID and the Institute of Singapore Chartered Accountants and supported by Accounting and Corporate Regulatory Authority (“ACRA”), where relevant.
All Directors are provided with relevant information on the Company’s policies, procedures and practices relating to governance matters, including disclosure of interests in securities, dealings in the Company’s securities, restrictions on disclosure of price sensitive information and declaration of interests relating to the Group’s businesses.
Training for Directors
Directors are updated regularly on key regulatory and accounting changes and risk management at Board meetings. During the financial year ended 30 June 2016, Directors attended training programmes and seminars organised by SID such as “ASEAN Corporate Governance Scorecard Briefing Session”, “Raising the Bar for Financial Reporting and Audit”, “Governance, Risk Management & Compliance Training and Certification” and “Of Enron, Entanglement and Enlightenment ”. Directors also attended training on the use of eBoard software to access Board and Committee Meeting Reports via electronic devices as part of the Group’s green initiative and sustainability efforts for the environment. Directors are also
informed of other training programmes and seminars organised by Singapore Exchange Securities Trading Limited (“SGX-ST”), ACRA and KPMG. The NC has reviewed the training and professional development programmes attended by Directors, which were funded by the Company.
Board Composition and Guidance
On an annual basis, the NC determines the independence of the Directors based on the definition of independence and guidance on relationships which would deem a director not to be independent as set out in Code 2012 e.g. relationship with the Company, its officers, related corporations and major shareholder(s). For the year under review, all Directors had made declarations on their respective status of independence which were submitted to the NC for review.
The NC has determined that Mr Moses Lee, Mr Timothy Teo, Mr Francis Siu, Mr Abdullah Bin Tarmugi, Ms Lim Suat Jien and Ms Jennie Chua are independent. Based on the NC’s review of independence, the Board is satisfied that there is a strong and independent element on the Board with more than 50% of the Board being independent.
The NC has also determined that there is currently no Director who has served beyond nine years on the Board nor the existence of a relationship as stated in Code 2012 which would deem any Independent Director of the Company not to be independent.
The Board, having taken into account the review by the NC, considers its present size to be appropriate to facilitate effective decision making for the current nature and scope of the Group’s business operations.
The NC conducted its annual review on the composition of the Board which comprises well-qualified members with diversified skills, gender, experience, knowledge and providing core competencies in the areas of accounting, financial, banking, legal, business management and industry experiences such as hotel operations. To enhance the Board’s competencies, induction program will be conducted for newly appointed Directors as in the case for Mr Raymond Choong, described under Principle 1 above.
The Board considers its current composition with a balanced mix of skills as appropriate for the existing needs and demands of the Group’s businesses. During the financial year, the Company supported the Board Diversity Pledge, an initiative jointly conducted by SGX-ST and SID with the support of ACRA and MAS.
Non-executive Directors are encouraged to constructively challenge and help develop proposals on strategy. During the financial year ended 30 June 2016, non-executive Directors had met without the presence of Management.
Chairman and Chief Executive Officer
Separate Role of Chairman and CEO
The Board Chairman, Mr Moses Lee is an Independent Director. There is clear division of responsibilities in the respective roles and functions of the Chairman, Mr Lee and the CEO, Mr Raymond Choong. There is no familial relationship between Mr Lee and Mr Choong.
The Chairman leads the Board and ensures its smooth and effective functioning.
The CEO is responsible for the vision and strategic direction of the Group, implementing the policies and decisions of the Board, initiating business ideas and corporate strategies to create competitive edge and enhancing shareholder wealth, setting the benchmark and targets for operating companies, overseeing the day-to-day operations and tracking compliance and business progress.
Lead Independent Director
As the Chairman is independent from the Company’s officers, related corporations and major shareholder(s); and the Directors and Management are accessible to the Company’s shareholders, the appointment of a lead independent director is deemed to be not necessary.
The NC comprises the following three Directors, all of whom are non-executive with the majority, including its Chairman, being independent:
Abdullah Bin Tarmugi, Chairman
(Independent and Non-Executive)
Timothy Teo Lai Wah, Member
(Independent and Non-Executive)
Kwek Leng Hai, Member
(Non-Independent and Non-Executive)
The terms of reference of the NC are set out in the Company’s own Code of corporate governance and includes, inter alia, the following:
reviews and recommends to the Board all new Board appointments and re-appointments (including alternate directors, if applicable) and re-election of Directors at annual general meetings;
determines annually whether or not, a director is independent;
evaluates the performance of the Board as a whole, the Board Committees and individual Directors (including the Chairman); and
reviews training and professional development programmes for Directors.
Selection of Directors
The Company has in place a process for the selection and appointment of new Directors to the Board which has been followed by the NC. Factors considered by the NC include the relevant skills that the Company sought such as strategic planning, business and management experience, industry knowledge e.g. real estate, hotel operations, etc.
In the selection and appointment of a new Director, candidates may be put forward or sought through internal promotion, contacts and recommendations from Directors/substantial shareholders or external sources, when appropriate. The NC will review the profile of the candidate proposed for appointment, having regard to the competencies, skills, professional expertise, experiences, background and track record, and make recommendation to the Board on the appointment of new Director. The NC is also tasked to review succession and renewal plans for Board continuation. During the year, the NC has reviewed and recommended the appointment of Mr Raymond Choong as an Executive Director and Group President & CEO , of which the Board has approved.
As prescribed by the Company’s Articles of Association and recommended by Code 2012, one-third of the Directors for the time being are required to retire from office and are subject to re-election by shareholders at the Company’s AGM. Every Director is required to retire from his/her office and is subject to re-election at least once in every three years. The NC will review the contributions and performance of the Directors who are retiring at the AGM to determine their eligibility for re-nomination.
The NC also took into consideration Directors’ number of listed company board representations and other principal commitments, and is satisfied that each Director is able to and has been adequately carrying out his/her duties as a Director of the Company. The Board has reviewed and is satisfied that Directors’ current directorships in other listed company boards and their other principal commitments did not affect their time commitment to the Board of the Company and has accordingly not made a determination of the maximum number of board representations a Director may hold.
Directorship/Chairmanship of Directors
Key information of each member of the Board including date of first appointment as a Director, date of last re-appointment/ re-election, academic and professional qualifications, background and experience, directorships or chairmanships in other listed companies and principal commitments, and other relevant information can be found in the “Board of Directors” section of this Annual Report.
Evaluation of Board Chairman, Individual Directors and Board Committees
On an annual basis, the NC reviews the assessment of effectiveness and performance of each individual Director, the Board Chairman, the Board as a whole and its Committees.
The assessment of individual Director was carried out based on evaluation criteria such as his/her contributions to the functions of the Board, participation and attendance at Board Meetings, his/her competency, expertise and skills as well as knowledge of the business and the industry in which the Group/Company operates in.
The assessment of the Chairman was carried out with particular emphasis on his role and responsibilities as a Chairman based on criteria drawn from the guidelines as set out in the SID’s NC Guide, including conduct of meetings of the Board and Shareholders, leadership, communication and interaction with Directors, Shareholders and other stakeholders, possession of high level of ethics/values, etc.
Each Board Committee Chairman evaluated his respective Board Committees, taking into account the respective Board Committees’ roles and responsibilities as well as the contributions of members to the functions of these Committees.
All Directors participated in the assessment process and submitted their respective completed and signed assessment forms to the Company Secretary for collation and presentation to the NC for evaluation.
Evaluation of the Board as a Whole
The NC had assessed and evaluated the collective Board performance, taking into account the assessment of individual Directors and the Board Chairman as well as the performance of each Board Committee. In assessing the Board’s performance as a whole, the NC had considered the Board’s integrity, competency, responsibilities, governance and organization as well as team dynamics. The NC also carried out an evaluation and review of the contributions of Directors at meetings of the Board and Board Committees and Directors’ participation in the affairs of the Company, including a review of matters such as the independence of Directors, their individual skills, experience and time commitment, in particular for Directors who served on multiple boards as well as the overall Board size and composition.
On the basis of the aforesaid evaluation, the NC is satisfied that for the financial year ended 30 June 2016, the Board and its Committees had been effective in the conduct of their respective duties and the Directors have each contributed to the effectiveness of the Board and its Committees (as applicable). The results of the NC’s assessment had been communicated to and accepted by the Board.
Access to Information
In order to enable the Directors to make informed decisions in the discharge of their duties and responsibilities, Management recognizes the importance of providing the Board with relevant, complete and adequate information in a timely manner.
Management furnished the Board with reports of the Company’s operations and performance, financial position and prospects for review at each Board meeting. Management also keeps the Board apprised of the Company’s operations and performance through separate meetings and discussions. To facilitate participation at meetings, Directors are provided with electronic devices to enable them to read reports/materials in real time once these are being uploaded to a secured system accessible by all Directors.
Directors have separate and independent access to the Company Secretary, whose role includes, inter alia, ensuring that Board procedures as well as applicable rules and regulations are complied with. The incumbent Company Secretary is Ms Mary Goh who was appointed in June 2015. She has more than two decades of corporate secretarial experience in professional consultancy firms and public listed companies. Ms Goh is a Fellow of the Chartered Secretaries Institute of Singapore. She holds a Master of Business Administration Degree from the University of South Australia and a Master of Laws in Commercial Law from the Singapore Management University.
The Company Secretary attends all Board and Board Committee meetings; and ensures that board procedures are followed and that applicable rules and regulations prescribed by, inter alia, the Companies Act and the SGX-ST Listing Manual are complied with. She also advises the Board on all governance matters, as well as assisting with the co-ordination of training and professional development for Board members.
Directors have access to independent professional advice at the Company’s expense, in consultation with the CEO of the Company