CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2021 CORPORATE GOVERNANCE 38 39 Principle 2: Board Composition and Guidance Board Independence (Provisions 2.1, 2.2 and 2.3) The Board currently comprises nine members. All members of the Board, except for the Board Chairman, the Group CEO and Mr Philip Yeo Liat Kok, are IDs. Based on the NC’s recommendation, the Board has determined six of them, being more than half of the Board, to be independent (“6 IDs”), thus providing for a strong and independent element on the Board capable of exercising objective judgement on the corporate affairs of the Company. No individual or small group of individuals dominate the Board’s decision-making. No alternate Directors have been appointed in respect of any of the Directors. When reviewing the independence of the 6 IDs, the NC has considered the applicable Listing Rule 210(5)(d) and the guidelines for independence set out in Provision 2.1 of the 2018 Code. As part of the consideration, the NC also took into account the 6 IDs’ other directorships, annual declarations regarding their independence, disclosures of interest in transactions in which they have a direct/ indirect interest, their ability to avoid any apparent conflicts of interests especially by abstaining from deliberation on such transactions and their ability to maintain objectivity in their conduct as Directors of the Company. Mr Ong Lian Jin Colin, an ID, is a director of Summervale Properties Pte. Ltd. (“Summervale”) which had entered into an Asset Management and Marketing Agreement with Trentwell Management Pte Ltd (“Trentwell”), a wholly-owned subsidiary of the Company, for Trentwell to manage and market Summervale’s residential units at Nouvel 18. Mr Ong is not involved in the daily operations of and does not hold any executive position in Summervale or its holding company, CORPORATE GOVERNANCE Green 18 Pte. Ltd. other than being a board member of both companies and a shareholder of Green 18 Pte. Ltd. holding less than 5% shareholding. The Board has concurred with the NC’s determination that Mr Ong’s independence is not affected by this relationship between Trentwell and Summervale. In accordance with Listing Rule 210(5) (d) , none of the 6 IDs are currently employed or have been employed at any time during the past three financial years by the Company or any of its related corporations. None of the 6 IDs have immediate family members who are currently employed or have been employed at any time during the past three financial years by the Company or any of its related corporations, and whose remuneration is determined by the RC. For purposes of determining independence, the 6 IDs have also provided confirmation that they are not related to the Directors or to any shareholders holding 5% interest in the Company. The NC is satisfied that there is no other relationship which could affect their independence. The Directors undertook a review of their independence, with each ID abstaining from participating in his/her own review by the Board and had concurred with the NC’s determination of the independence of the 6 IDs. Pursuant to Listing Rule 210(5)(d)(iii), Mr Philip Yeo Liat Kok who has served the Board for more than nine years has ceased to be independent with effect from 1 January 2022. The Company did not seek the requisite approval for Mr Yeo’s continued appointment as an ID at the 2021 AGM of the Company. Notwithstanding the Company’s earlier announcement of Mr Yeo’s intention to step down from the Board before 31 December 2021, the NC, upon further consideration, had recommended and the Board had concurred, with Mr Yeo abstaining from the recommendation, that Mr Yeo remain on the Board to maintain a balance of experienced and new IDs on the Board. Mr Yeo consented to the appointment and in this regard, he has been re-designated from an Independent non-Executive Director to a non-Independent non-Executive Director (“NED”) with effect from 1 January 2022. Board Composition, Size and Diversity (Provision 2.4) Board Diversity Pledge The Board welcomes the push for greater diversity in the boardroom which can provide a more diverse approach to business decisionmaking and the Company had, on 28 August 2015, supported the Board Diversity Pledge initiated by SID and SGX-ST where the Company pledged its commitment to promote “diversity as a key attribute of a wel l-functioning and effective Board” and shared the view “that a diverse Board will enhance decision-making by harnessing the variety of skills, industry and business experiences, gender, age, ethnicity and culture, geographi cal background and nationalities, tenure of service, and other distinguishing qualities of the members of the Board.” The NC reviews the size and composition mix of the Board and the Committees annually. At the recommendation of the NC, the Board adopted a formal Board Diversity Policy in 2017, setting out its policy and framework for promoting diversity on the Board. The Board Diversity Policy is available on the Company’s corporate website. The Board recognises that a diverse Board is an important element which will better support the Company’s achievement of its strategic objectives for sustainable development by enhancing the decision-making process of the Board through the perspectives derived from the various skills, business experience, industry discipline, gender, age, ethnicity and culture, geographical background and nationalities, tenure of service and other distinguishing qualities of the Directors. When reviewing and assessing the composition of the Board and making recommendat ions to the Board for the appointment of Directors, the NC will consider all aspects of diversity in order to arrive at an optimum balanced composition of the Board. The Board has adopted the NC’s initial recommended target to achieve a level of at least 20% female representation on its Board by 2020. With Mrs Carol Fong and Mrs Wong Ai Ai on the Board currently, it has continued to achieve its target of 20% female representation. Mrs Wong Ai Ai has also been appointed as a member of the NC. The NC noted the recommendation of the Council for Board Diversity for listed companies to have 25% female representation on their boards by 2025 and 30% by 2030. In this regard, the NC will try to ensure that: (a) if external search consultants are used to search for candidates for Board appointments, the brief will include a requirement to present female candidates; (b) when seeking to ident i fy a new Director for appointment to the Board, the NC will request female candidates to be fielded for consideration; (c) female representation on the Board be continually improved over time based on the set objectives of the Board; and (d) at least one female Director continues to be appointed to the NC. The final decision on the selection of Directors will be based on merits against objective criteria that complement and Board Composition, Diversity and Balance expand the skills and experience of the Board as a whole, and having regard to the overall balance and effectiveness of a diverse Board. The Board currently comprises business leaders and professionals with real estate, hospitality, financial (including audit, accounting, tax and investment), legal, risk management, fund management and business management qualifications and backgrounds. When reviewing candidates for future Board appointment, the NC wi l l be considering candidates from other disciplines such as information technology and digital transformation, in order to provide more diverse viewpoints and introduce additional skill sets to the Board. The Board has two female members, and Directors with ages ranging from the mid40s to early-80s, who have served on the Board for different tenures. The members of the Board wi th the i r combined business, management and professional experience, knowledge and expertise, provide the core competencies to allow for diverse and objective perspectives on the Group’s business and direction. Further information on the individual Directors’ background, experience and skills can be found in the ‘Board of Directors’ section in the Annual Report 2021 (“AR”). Independence 66.7% 11.1% 77.8% 22.2% 22.2% Gender Diversity Independent Non-Executive Directors Male Directors Executive Directors Non-Executive Directors Female Directors Directors’ Age Group As of 21 March 2022 3 1 1 2 2 40s 50s 60s 70s 80s Independent Directors’ Length of Service As of 21 March 2022 1 5 <1y <2y
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