Board Composition, Diversity and Balance Independence Gender Diversity Independent Non-Executive Directors Male Directors Executive Directors Non-Executive Directors Female Directors Directors’ Age Group 2 3 1 1 3 8 7 8 10 7 5 7 4 4 10 40s 50s 60s 70s 80s Directors' Skills Matrix CORPORATE GOVERNANCE 20% 10% 20% 80% 70% Real estate & Hospitality-related Hotel management or asset management Fund management Strategic planning and Leadership and mangement Audit/finance/accounting Risk management Sustainability Corporate finance/mergers & aquisitions Legal Digital/information technology NEDs’ Participation (Provision 2.5) NEDs are encouraged to participate actively at Board meetings in the development of the Company’s strategic plans and direction, and in the review and monitoring of Management’s performance against targets. To facilitate this, they are kept informed of the Company’s businesses and performance through monthly reports from Management and have unrestricted access to Management. They also sit on various Committees established by the Board to provide unbiased and independent views, constructive input and the independent review and monitoring the performance of the Company and Management. Two meetings of the NEDs, chaired by the Lead ID, were held in 2023 without the presence of Management. The NEDs would also confer among themselves without the presence of Management as and when the need arises. The Lead ID collates the views and feedback from the NEDs and communicates the same to the Board and/or the Board Chairman as appropriate. Principle 3: Chairman and Chief Executive Officer Roles of the Chairman of the Board and the Group CEO (Provisions 3.1 and 3.2) The roles of Chairman of the Board and the Group CEO are separate to ensure a clear division of responsibilities and increased accountability. The Chairman of the Board, Mr Kwek Leng Beng, is also the Executive Chairman. Mr Kwek Leng Beng plays an instrumental role in providing the Company with strong leadership and vision, leading the Board in its review of the Group’s strategies for sustainable growth. As the Board Chairman with written terms of reference approved by the Board, Mr Kwek Leng Beng also promotes and leads the Group in its commitment to achieve and maintain high standards of corporate governance. He bears primary responsibility for the workings of the Board, by ensuring effectiveness in all aspects of its role including setting the agenda for Board meetings with input from Management, ensuring sufficient allocation of time for thorough discussion of key agenda items at Board meetings, promoting an open environment within the Boardroom for constructive debate, encouraging the NEDs to speak freely and contribute effectively, and exercising control over the quality, quantity and timeliness of information flow between the Board and Management. At AGMs and other shareholders’ meetings, he plays a pivotal role in fostering constructive dialogue between shareholders, the Board and Management. As Executive Chairman, he is the most senior executive in the Company and bears overall executive responsibility for the Group’s business. Mr Kwek Leng Beng is assisted by the Group CEO, Mr Sherman Kwek. The Group CEO leads the members of the ExCo and is responsible for implementing and reviewing the business direction and strategies for the Group as endorsed by the Board, and for operational performance and organisational excellence. He is the elder son of the Board Chairman. The Board has considered Mr Kwek Leng Beng’s role as an Executive Chairman and the strengths he brings to such a role by virtue of his stature and experience. Through the appointment of the Lead ID (see more information below) and the establishment of various Committees with power and authority to perform key functions without the undue influence from the Board Chairman, and the putting in place of internal controls for proper accountability and to allow for effective oversight by the Board of the Company’s business, the Board ensures that there is an appropriate balance of power which allows the Board to exercise objective decision-making in the best interests of the Company. The Board is of the view that Mr Kwek Leng Beng’s role as an Executive Chairman would continue to facilitate the Group’s decision-making and implementation process without diminishing the capacity of the Board for independent decision-making. Lead Independent Director (Provision 3.3) Cognisant that the Board Chairman is an Executive Director and thus not independent, the Board has designated a Lead ID who serves as a sounding board for the Board Chairman and as an intermediary between the NEDs/IDs and the Board Chairman. The current Lead ID is Mr Lee Jee Cheng Philip. The role of the Lead ID is set out in the written terms of reference for the Lead ID, which has been approved by the Board. The Lead ID is available to shareholders should they have concerns which cannot be resolved or are inappropriate to raise through the normal communication channels of the Board Chairman or Management. No query or request on any matter which requires the Lead ID’s attention was received from shareholders in 2023. Under the chairmanship of the Lead ID, two meetings of the NEDs were convened in 2023 without the presence of Management or the Board Chairman, and the views expressed by the NEDs at the meeting were communicated by the Lead ID to the Board Chairman and Management, as appropriate. Principle 4: Board Membership NC Composition and Role (Provisions 4.1 and 4.2) Four out of the five members of the NC, including the NC chairman, are IDs. The Lead ID is one of the independent members of the NC. The key responsibilities of the NC as set out in its written terms of reference approved by the Board, are as follows: • to examine Board size; • to review all Board and Committee composition and membership; • review the board diversity policy and recommend to the Board annually, objectives for diversity (whether qualitative and quantitative) and review the progress made towards achieving the Board’s objectives for diversity; • to review board succession plans for the Directors (including the Board Chairman and the Group CEO), and the KMP (who are not directors); • to determine each Director’s independence annually and as and when circumstances require; • to evaluate the performance of the Board, the Board Chairman, Committees and the individual Directors (including the Group CEO); • to review appointment and re-appointment of Directors (including the Board Chairman and the Group CEO, and alternate directors, if any) and the reasons for their resignations; • to review appointments and the reasons for resignations and terminations of the KMP who are not Directors; • to review and confirm the induction programmes for newly appointed Directors and for existing Directors in respect of their appointments to any of the Committees; and • to review the training and continuous professional development programme for the Directors. Three NC meetings were held in 2023. The Company Secretaries maintain records of all NC meetings including records of discussions on key deliberations and decisions taken. For the financial year under review, the NC conducted a self-assessment of its own effectiveness in the discharge of its roles and responsibilities, which was facilitated through the use of a self-assessment checklist (“NC Self-Assessment Checklist”). The NC Self-Assessment Checklist covered, inter alia, the responsibilities of the NC under its terms of reference and also considered the contributions of NC members to the deliberation and decision-making process at NC meetings. Based on the self-assessment, the NC is of the view that it has fulfilled its responsibilities and discharged its duties as set out in its terms of reference. Nomination of Directors and Determination of Independence (Provisions 4.3 and 4.4) The NC reviews the nomination of the relevant Directors for election/re-election as well as the independence of Directors annually. When considering the nomination of Directors for election/re-election, the NC takes into account their contribution to the effectiveness of the Board (which includes their participation and candour at Board and Committee meetings) as well as their time commitment especially for Directors who have multiple board representations and/or other principal commitments, and also reviews their independence with regard to the provisions in the applicable Listing Rule 210(5)(d) and Provision 2.1 of the CG Code. The recommendation of the NC on the annual nomination of the Directors for election/re-election is submitted to the Board for decision and thereafter tabled at the AGM of the Company for consideration and approval by shareholders. CORPORATE GOVERNANCE 45 44 CORPORATE GOVERNANCE ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED
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