Principle 2: Board Composition and Guidance Board Independence (Provisions 2.1, 2.2 and 2.3) The Board currently comprises ten members. Based on the NC’s recommendation, the Board has determined seven of them, being more than half of the Board, to be independent, 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. The non-independent Directors are the Board Chairman, the Group CEO, both holding executive appointments in the Company, and Mr Philip Yeo Liat Kok who is an NED. When reviewing the independence of the 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 CG Code and its accompanying Practice Guidance (collectively, the “Independence Guidance”). As part of the consideration of the IDs’ independence, the NC has also taken into account the following: • 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 interest especially by abstaining from deliberation on such transactions; • their ability to maintain objectivity in their conduct as Directors of the Company; and • their ability to objectively raise issues and seek clarification as and when from the Board, Management and the Company’s external advisors on matters pertaining to their area of responsibilities whether on the Board or on the Committees. Each of the IDs on the NC recused himself/herself from the NC’s deliberations on his/her own independence. Mr Ong Lian Jin Colin, an ID, ceased as a director of Summervale Properties Pte. Ltd. (“Summervale”) on 23 November 2023. Summervale had previously entered into an Asset Management and Marketing Agreement with Trentwell Management Pte Ltd (“Trentwell”), a whollyowned subsidiary of the Company, for Trentwell to manage and market Summervale’s residential units at Nouvel 18. Mr Ong was not involved in the daily operations of and did not hold any executive position in Summervale or its holding company, 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 was not affected by this relationship between Trentwell and Summervale prior to his cessation as a director of Summervale. None of the 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. They also do not 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 the purpose of determining independence, the 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 IDs. Board Composition, Size and Diversity (Provision 2.4) Since 30 November 2017, the Company has adopted a Board Diversity Policy (“BDP”), as amended on 29 August 2022, which sets out the framework for promoting diversity on the Board. The Company 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 decisionmaking process of the Board through the perspectives derived from the various skills, business experience, industry discipline and other aspects of diversity (such as gender and age) of the Directors. The BDP, which is available on the Company’s corporate website, provides that the NC shall consider all aspects of diversity when reviewing and assessing the composition of the Board and when making recommendations to the Board for the appointment of Directors to arrive at an optimal balanced composition of the Board. The BDP also provides for the NC to discuss and recommend annually to the Board measurable targets and timelines for promoting and achieving diversity on the Board. The NC has put in place a skills matrix to help identify gaps in the Board and Committees. The skills matrix classifies skills, experience and knowledge of the existing Directors into the broad categories such as industry knowledge, namely real estate and hospitality-related businesses and management and fund management; management expertise for example strategic planning, leadership and customer-based experience; professional expertise or skills in specific areas for example, audit/finance, risk, digital/ information technology, sustainability and legal. When reviewing and assessing the size and composition of the Board and Committees and making recommendations to the Board annually including the appointment/reappointment of Directors, the NC will consider all aspects of diversity based on targets and timelines set for promoting and achieving diversity on the Board to arrive at an optimal balanced composition of the Board. As prescribed under the BDP, the final decision on the selection of Directors will be based on merits against objective criteria and targets considered by the NC annually and recommended to the Board for approval. CORPORATE GOVERNANCE Diversity Targets and Progress in FY 2023 Skills Diversity Target Strengthen the Board's core skill set especially in the areas of hospitality and finance. Progress Mr Tan Kian Seng was appointed in March 2023. Mr Tan is a qualified accountant and has more than 35 years of experience in senior positions, managing various international businesses including hospitality sector and had served on the boards of companies listed on SGX-ST, London Stock Exchange, New Zealand Stock Exchange and the Philippines Stock Exchange. Gender Diversity Target At least 20% female representation on the Board. The Board will strive to achieve 25% female representation by 2025 as recommended by the Council for Board Diversity for listed companies. 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 identify 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. Progress The Board has continued to maintain its target of 20% female representation. Mrs Wong Ai Ai is a member of the NC. Board Independence Target Maintain two-third independence on the Board. Progress With the appointment of Mr Tan Kian Seng as an ID in March 2023, the Board has achieved more than two-third Board independence. Age Diversity Target Maintain age diversity with Directors with ages ranging from below 50 to above 70, with majority of the Directors within the above 50 but below 70 age group. When reviewing candidates for appointment whether in addition to existing Board members or as replacement of Directors who retire or resign, the NC will endeavour to consider candidates in the age range of between 50 to 70 years. Progress The Board has continued to maintain this target. The NC and Board also agreed that there was no need to set a specific target for ethnicity/nationality so long as the candidates provide distinguishing qualities that complement and expand the skills and experience of the Board as a whole. Further information on the individual Directors’ background, experience and skills can be found in the ‘Board of Directors’ section in this annual report. Having considered the scope and nature of the operations of the Group, the Board, taking into account the recommendation of the NC, is satisfied that the current size and composition of the Board and Committees provide for diversity in line with the BDP with a good balance of skills, experience, industry knowledge, professional qualifications, gender and age, which serve to support the Company in achieving its strategic objectives and sustainable growth and development. CORPORATE GOVERNANCE 43 42 CORPORATE GOVERNANCE ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED
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