The Constitution of the Company provides that not less than one-third of the Directors for the time being shall retire as Directors at each AGM. All new Directors appointed by the Board shall hold office until the next AGM and are eligible for election at the said AGM. In accordance with the Constitution of the Company, Mr Kwek Leng Beng, Mr Sherman Kwek Eik Tse, Mr Lee Jee Cheng Philip and Ms Chan Swee Liang Carolina are due to retire by rotation at the 61st Annual General Meeting (“2024 AGM”), and being eligible, have offered themselves for re-election at the 2024 AGM. The NC has considered their contribution and performance and recommended to the Board to nominate their re-election at the 2024 AGM. Criteria and Process for Nomination and Selection of New Directors (Provision 4.3) The NC also reviews all nominations and interviews candidates before formally considering and recommending them for appointment to the Board and where applicable, to the Committees. Searches for potential candidates generally take into account recommendations from the Directors and various other sources. Where necessary, the NC may consider the use of external search consultants to find appropriate candidates. Shortlisted candidates would be required to furnish their curriculum vitae containing information on their academic/professional qualification, work experience, employment history and experience (if any) as directors of listed companies. In reviewing and recommending to the Board any new Director appointments, including appointments to the appropriate Committees, the NC considers the following as well as factors prescribed under the Company’s BDP, details of which as set out under the sub-header ‘Board Composition, Size and Diversity (Provision 2.4)’: (a) the candidate’s track record, experience and capabilities or such other factors including age and gender, as may be determined by the NC to be relevant and which would contribute to the Board’s collective skill set; (b) any competing time commitments if the candidate has multiple listed company board representations and/or other principal commitments; (c) the candidate’s independence, in the case of the appointment of an ID; and (d) the composition requirements for the Board and Committees after matching the candidate’s skill set to the requirement of the relevant Committees (if the candidate is proposed to be appointed to any of the Committees). Key Information on Directors (Provision 4.5) Please refer to the ‘Board of Directors’ section in the AR for key information on the Directors, including the dates of their first appointment and last election/re-election to the Board (if applicable), their academic/professional qualifications, major appointments/principal commitments, directorships held in listed companies for both the current and in the CORPORATE GOVERNANCE preceding five years, and other relevant information; ‘Additional Information on Directors seeking re-election’; and the ‘Notice of Annual General Meeting’ for information on Directors proposed for re-election at the 2024 AGM. Succession Planning for the Board, the Board Chairman, the Group CEO and the KMP (Provision 4.1) The Board believes in carrying out succession planning for itself, the Board Chairman and the KMP (including the Group CEO) to ensure continuity of leadership. It has in place a formal Board and KMP succession plan which is reviewed annually. Board renewal is a continuous process and in this regard, the NC reviews annually the composition of the Board and Committees, which includes size and mix, and recommends to the Board the selection and appointment of new Directors, whether in addition to the existing Board members or as replacement of retiring Board members, with a view to identify any gaps in the Board skill set taking into account the Group’s strategy and business operations. The Board will be able to function smoothly notwithstanding any resignation or retirement of any Director given the present number of members and mix of competencies on the Board. To further strengthen the Board skill set in the areas of hospitality and finance, Mr Tan Kian Seng was appointed as an additional ID in March 2023. Board Development (Provision 4.5) The NC reviews the training and development of the Directors to ensure that Directors receive appropriate development on a continuing basis, to perform their roles on the Board and where applicable, the Committees. The Directors are provided with updates and/or briefings to assist them to properly discharge their duties. The briefings are conducted either internally with invited speakers, or externally, at the Company’s expense. A separate programme is established for new Directors, details of which together with details of the internal briefing and updates provided to the Directors in 2023 are set out in the paragraph under the subject heading ‘Board Orientation and Training’ in this report. The Board is kept apprised twice yearly on the list of training programmes attended by the Directors during the year. Principle 5: Board Performance Board Evaluation Process (Provision 5.1) The Company has in place a formal process for assessment of the effectiveness of the Board as a whole, the various Committees and the contribution by each Director (including the Group CEO) and the Board Chairman to the effectiveness of the Board and where applicable, of the Committees. No external facilitator has been used. The NC assesses the Board’s performance as a whole annually, using objective and appropriate criteria which were recommended by the NC and approved by the Board. When assessing the overall Board performance, the NC takes into consideration the feedback from individual Directors on areas relating to the Board’s role on strategy and performance, the Board’s process and governance (including oversight of internal controls and risk management), the Board’s competencies and effectiveness and the effectiveness of the Board Chairman. The results of the overall evaluation of the Board by the NC, including its recommendation for improvements, if any, are presented to the Board. The NC also undertook an evaluation of the performance of the Committees with the assistance of self-assessment checklists completed by these Committees. The annual performance evaluation of the Board Chairman and of the respective Director’s performance comprises two parts: (a) review of background information concerning the Director including his attendance records at Board, Committee and NEDs’ (where applicable) meetings; and (b) NC’s evaluation based on certain assessment parameters, which were recommended by the NC and approved by the Board. When deliberating on the performance of a particular Director who is also a member of the NC, that member abstains from the discussions to avoid any conflict of interest. The results of the individual evaluation of the Directors are also used by the NC, in its consultation with the Board Chairman (who is also a member of the NC), to review, where appropriate, the composition of the Board and Committees, and to support its proposals, if any, for appointment of new members and its recommendations for the re-election of retiring Directors. The Board Chairman, as a member of the NC, is fully apprised of the results of the performance evaluation for the individual Directors and would take into consideration such evaluation and act as appropriate on the recommendations of the NC. Comments from the Directors, if any, concerning the Board as a whole and the general performance of the Directors, are also presented to the Board. Board Evaluation Criteria (Provision 5.2) The qualitative criteria used by the NC to evaluate the Board covers five key areas relating to Board structure, the Board’s review of the Company’s strategy and performance, Board’s oversight on the Company’s governance, including risk management and internal controls, and the effectiveness of the Board Chairman and Board processes. The quantitative criteria used to evaluate the overall Board performance comprises performance indicators which include a comparison of the Group’s performance (including segmental performance) for the financial period under review against the Group’s performance for the corresponding period in previous years, and other indicators such as the Company’s share price performance over a historical period. Individual Director Evaluation Criteria (Provision 5.2) Factors taken into account in the assessment of a Director’s performance include their abilities and competencies, their objectivity and the level of participation at Board and Committee meetings including their knowledge and contribution to Board processes and the business strategies and performance of the Group. The performance evaluation of each Director is taken into account in the NC’s consideration with regard to his/her election/re-election as Director. REMUNERATION MATTERS Principle 6: Procedures for Developing Remuneration Policies RC Composition and Role (Provisions 6.1, 6.2, 6.3 and 6.4) The RC comprises four NEDs, all of whom including the chairman of the RC, are independent. The key responsibilities of the RC, as set out in its written terms of reference approved by the Board, are to review and recommend for endorsement by the Board, a framework of remuneration for the Directors, including the specific remuneration packages of the Executive Chairman and the ExCo members. Further, in consultation with the NC and Management, the RC also considers the talent management framework so as to align with its review of the overall remuneration framework. The Company has in place a remuneration framework (which covers all aspects of remuneration) for the NEDs, Executive Chairman and the ExCo members. On an annual basis, the RC reviews and recommends the fees payable to the Directors for the Board’s consideration before approval is sought from the shareholders at the AGM. The RC also reviews and recommends annually specific remuneration packages for the Executive Chairman and the ExCo members, including the annual increments, short-term and long-term incentives, for approval by the Board. The RC also considers the termination terms in the contracts of employment of the ExCo members to ensure that they are not unfair or unreasonable. In 2023, Willis Towers Watson and Aon, external remuneration consultants, provided total compensation benchmark data on the remuneration for the ExCo members in Singapore based on regional listed real estate companies of comparable size to the Company as well as the benchmark data for Singapore listed companies across all industries to help the RC in its consideration and proposal of the appropriate level of remuneration for the ExCo members to attract, retain and motivate for sustained performance and value creation. The Company has no relationship with the appointed remuneration consultants other than their engagement in providing such benchmark data, which could affect the said consultants’ independence. CORPORATE GOVERNANCE 47 46 CORPORATE GOVERNANCE ANNUAL REPORT 2023 CITY DEVELOPMENTS LIMITED
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