Principle 1: The Board’s Conduct of its Affairs
The Board supervises the management of the business and the affairs of the Company and the Group. Apart from its fiduciary duties and statutory responsibilities, it also focuses on formulating the strategic direction and policies of the Company and the Group, paying particular attention to the growth of the Group and its financial performance. It has delegated the formulation of business policies and day-to-day management to the Executive Directors.
The principal functions of the Board are to:
- provide entrepreneurial leadership, set strategic objectives, and ensure that the necessary financial and human resources are in place for the Company to meet its objectives;
- establish a framework of prudent and effective controls which enables risks such as financial, operational, information technology and compliance to be assessed and managed, including safeguarding of shareholders’ interests and the Company’s assets;
- review management performance;
- identify the key stakeholder groups and recognise that their perceptions affect the Company’s reputation;
- set the Company’s values and standards (including ethical standards), and ensure that obligations to shareholders and other stakeholders are understood and met; and
- consider sustainability issues, e.g. environmental and social factors, as part of its strategic formulation.
The Board meets at least twice a year to review and deliberate on the key activities and business strategies of the Group, including reviewing and approving acquisitions and financial performance, and to endorse the release of the interim and annual results. Ad hoc meetings are held as and when circumstances require, such as to address significant transactions or issues. Where physical meetings are not possible, timely communication with members of the Board and Board Committees can be achieved through electronic means and circulation of written resolutions for approval by the Board or relevant Board Committees. The Company’s Bye-Laws provides for Directors to participate in Board by means of teleconference, videoconferencing and visual equipment.
To assist in the efficient implementation and execution of its responsibilities, the Board has established an Audit Committee, a Nominating Committee and a Remuneration Committee. Specific responsibilities, which are outlined in the respective Terms of Reference, have been delegated to each of the committees. Each Board Committee will report to the Board and makes its recommendations to the Board on matters under its purview. The Board accepts that while these Committees have the authority to examine particular issues and will report to the Board their decisions and recommendations, the ultimate responsibility for the final decision on all matters lies with the entire Board.
The Board through the Nominating Committee ensures that it recruits to the Board only individuals of sufficient calibre, knowledge and experience to fulfil the duties of a Director appropriately. Newly appointed directors are briefed on the Group’s business activities and governance practices and provided with information on their duties and obligations as a director under the Bermuda law.
During the financial year ended 31 March 2017, the number of meetings held by the Board and its committees and the details of the attendances are as follows:-
|Board of Directors||Audit Committee||Remuneration Committee||Nominating Committee|
|Number of Meetings held||2||2||1||1|
|Name||Number of Meetings attended|
|Mr Lee Wan Lik (Managing Director and CEO) – spouse of Ms Lam Pui Wan||2||2*||1*||1|
|Ms Lam Pui Wan (Executive Director) – spouse of Mr Lee Wan Lik||2||2*||1*||1*|
|Mr Michael Yap Kiam Siew (Independent Director)||2||2||1||1|
|Mr Koji Miura (Independent Director)||2||2||1||1*|
|Mr Chan Ching Chuen (Independent Director)||1||1||1||1|
Notes: * – by invitation
Key matters that are specifically reserved for the Board’s consideration and decision include, but are not limited to, corporate planning, material acquisitions and disposals of assets, corporate or financial restructuring, share issuances, formulation of any dividend policy or the change of such dividend policy, declaration of dividends and determining the remuneration policy for the Directors.
Principle 2: Board Composition and Guidance
The Board currently comprises of 5 members, three of whom are Independent Directors. A brief profile of each Director is presented in the profile of Board of Directors section of this Annual Report and their shareholdings in the Company and its subsidiaries as at 31 March 2018 are disclosed in the Directors’ Report of the Audited Financial Statements for the financial year ended 31 March 2018.
The Board has examined its size and is of the view that it is an appropriate size for effective decision-making, taking into account the scope and nature of the operations of the Company.
The Nominating Committee is responsible for reviewing the composition of the Board to ensure that the Board has the appropriate mix of expertise and experience, and collectively possess the necessary core competencies for effective functioning and informed decision-making. The Board in consultation with the Nominating Committee has reviewed its composition and is satisfied that such composition ensures that there is adequate representation in respect of potential issues and challenges, without compromising the Board’s effectiveness and participation in decision-making. Objectivity on issues deliberated by the Board is assured, given the majority of Non-Executive Directors who are independent of management and are also independent in terms of character and judgement.
Even though Mr Michael Yap Kiam Siew and Mr Koji Miura have served on the Board for more than nine years, the NC, with the concurrence of the Board, is of the view that in assessing the independence of the Independent Directors, one should consider the substance of their professionalism, integrity and the objectivity and not merely based on the number of years which they have served on the Board. In view of this, having considered the above and weighing the need for progressive refreshing of the Board, the NC and the Board have determined that both Mr Yap and Mr Miura’s tenure in office have not affected their independence or ability to bring about independent and considered judgement to bear in the discharge of their duties as members of the Board. They provide a strong independent element on the Board, being free from any business or other relationship, which could materially interfere with the exercise of their judgement. These Directors continue to provide stability to the Board and the Company has benefited greatly from the presence of individuals who are specialists in their own field. Furthermore, their length of service on the Board has not only allowed them to gain valuable insight into the Group, its business, markets and industry, but has also given them the opportunity to bring the full breadth and depth of their business experience to the Company.
The Non-Executive Directors met up without the presence of Management, to facilitate a more effective check on the Management.
Principle 3: Chairman and Chief Executive Officer (“CEO”)
The Group’s Executive Chairman, Managing Director (equivalent to CEO) is Mr Lee Wan Lik, who is responsible for the day-to-day operations of the Group, as well as monitoring the quality, quantity and timeliness of the flow of information between the Board and the Management. Mr Lee is the founder of the Group and has played a key role in developing the Group’s business. He is being assisted by a group of Executive Directors and Executive officers in carrying out his executive duties and responsibility for the Group’s operation and business. Through the Group’s success and development in these few years, Mr Lee has demonstrated his vision, strong leadership and enthusiasm in this business.
The NC, with the concurrence of the Board is of the opinion that vesting the roles of both Chairman and Managing Director in the same person who is knowledgeable in the business of the Group provides strong and consistent leadership, thus allowing for more effective planning and execution of long term business strategies. As such, there is no need for the role of the Chairman and Managing Director to be separated. The NC will review the need to separate the roles from time to time and make its recommendations accordingly. The role of Mr Lee as the Chairman and Managing Director of the Company does not affect the independence of the Board as the Independent Directors make up more than 50% of the Board.
Taking cognizance that the Chairman and the Managing Director are the same person, the Board has since financial year ended 31 March 2015, appointed Mr Michael Yap Kiam Siew as the Lead Independent Director (“LID”) of the Company. Mr Yap will be available to shareholders where they have concerns where contact through the normal channels of the Chairman, Managing Director or Group Financial Controller has failed to resolve or for which such contact is inappropriate. He can also facilitate periodic meetings with the other Independent Directors in board matters, when necessary and provides feedback to the Executive Chairman after such meeting.
His other specifi c roles as LID are as follows:
- act as liaison between the Independent Directors and the Executive Chairman and Managing Director and lead the Independent Directors to provide non-executive perspectives in circumstances where it would be inappropriate for the Executive Chairman to serve in such capacity and to contribute a balanced viewpoint to the Board;
- advise the Executive Chairman of the Board as to the quality, quantity and timeliness of the information submitted by Management that is necessary or appropriate for the Independent Directors to effectively and responsibly perform their duties; and
- assist the Board and Company offi cers in better ensuring compliance with and implementation of corporate governance.
Principle 4: Board Membership
The Nominating Committee (“NC”) comprises Mr Chan Ching Chuen as Chairman, Mr Michael Yap Kiam Siew and Mr Lee Wan Lik as members.
The NC should make recommendations to the Board on relevant matters relating to:-
- the review of board succession plans for directors, in particular, the Chairman and for the Managing Director;
- the evaluation of the performance of the Board and Board Committees as a whole;
- the review of training and professional development programs for the Board; and
- the appointment and re-appointment of directors (including alternate directors, if applicable).
The NC has adopted the Code’s definition and criteria for independence. Each Independent Director is required to submit a Confirmation of Independence Form annually for the NC’s review.
During the year, the NC has reviewed the independence of the Independent Directors according to the criteria set out in the Code. These Directors have demonstrated strong independence in character and judgement over the years in discharging their duties and responsibilities as Independent Directors. They continue to express their individual viewpoints, debate on issues, objectively scrutinise and challenge Management’s proposals as well as participate in discussions on business activities and transactions involving conflicts of interests and other complexities.
Having considered the above, the NC is of the view that Mr Michael Yap Kiam Siew, Mr Koji Miura and Mr Chan Ching Chuen are independent. All three directors have abstained from any discussion and recommendation in respect of their own independence.
None of the above three Independent Directors are related to, and do not have any relationship with, the Company, its related corporations, its 10% shareholders, or its officers or are in any circumstances that could interfere, or be reasonably perceived to be interfere, with the exercise of their independence business judgement with a view to the best interests of the Company. The Board has concurred with the NC’s assessment.
Subject to the Board’s approval, the NC will also decide on how the Board’s performance is to be evaluated, and propose objective performance criteria which are dependent on how the Board has enhanced long-term shareholder value. Appointments to the Board are made on merit and against objective performance criteria.
To help build a culture of performance and stewardship amongst its Board members, the Group ensures that all the Directors step down and offer themselves for re-election at regular intervals of at least once every three (3) years. The Company’s Bye-Laws provide that at least one-third of the directors for the time being (or if their number is not three or a multiple of three, then the number nearest to but not less than one third) shall retire from office by rotation.
For the forthcoming Annual General Meeting (“AGM”), the NC has recommended that Ms Lam Pui Wan and Mr Koji Miura who will retire pursuant to Bye-Law 104 of the Company’s Bye-Laws, to be nominated for re-election. In making the recommendation, the NC had considered the Directors’ overall contributions and performance and competencies in fulfilling their responsibilities as Directors to the Board.
The NC has recommended the re-election of the retiring Directors and the Board has accepted the NC’s recommendation. Please refer to the notice of AGM for the resolutions put forth in relation to their respective reelections. There is no alternate director appointed to the Board as at the date of this Annual Report.
In the selection and nomination for new directors, the NC identifies the key attributes that an incoming director should have, based on attributes of the existing Board and the requirements of the Group. After endorsement by the Board of the key attributes, the NC taps on the resources of the directors’ personal contacts for recommendations of potential candidates. The potential candidates will go through a short listing process. Interviews are then set up with the short listed candidates for the NC to assess them before a decision is made.
A newly appointed Director will have to submit himself for retirement and election at an AGM immediately following his appointment and thereafter, be subjected to retirement by rotation. No new Director was appointed by the Company in FY2018.
Each member of the NC shall abstain from voting on any resolution with respect to the assessment of his performance for re-nomination as a Director.
The Board has set the maximum number of 10 listed company board representations which any Director of the Company may hold at any one time. All Directors have complied with this requirement. A Director with multiple board representations is expected to ensure that sufficient time and attention is given to the affairs of the Company. The NC is of the view that the number of directorships a Director can hold and his principal commitments should not be prescriptive as the time commitment for each board membership will vary.
The NC, having considered the confirmations received from the Independent Directors, is of the view that the other board representations and principal commitments of the Independent Directors do not hinder them from carrying out their duties to the Company. The NC is satisfied that sufficient time and attention have been accorded by these Independent Directors to the affairs of the Company. The Board concurred with the NC’s views.
Please refer to the Profile of Board of Directors as set out on Page 9 of the Annual Report for key information on the Directors.
Principle 5: Board Performance
The NC will assess the effectiveness of the Board and its board committees as a whole.
The NC, in considering the re-appointment of a Director, will evaluate the performance of the Director’s contributions such as his or her attendance record at meetings of the Board and Board committees, active participation during these meetings and the quality of his or her contributions. The NC has initiated the assessment of the effectiveness of the Board as a whole on an annual basis. The evaluation of the Board’s performance is conducted by means of a questionnaire which is then collated and the findings analysed and discussed. The results of the Board’s performance assessment are reviewed and circulated to the Board for consideration. Recommendations to further enhance the effectiveness of the Board are implemented as appropriate.
The Board has allocated budgets for directors to attend training and will make recommendations to the Board on the training and professional development programmes for the Board members.
Principle 6: Access to Information
To assist the Board in fulfilling its responsibilities, the Management provides the Board with management reports containing complete, adequate and timely information prior to Board meetings and as and when the need arises. Papers containing relevant background or explanatory information required to support the decision-making process, are prepared for each Board meeting and are normally circulated in advance of the meeting.
The Board is also provided with updates on the relevant new laws, regulations and changing commercial risks in the Company’s operating environment. Orientation to the Company’s business strategies and operations is conducted as and when required.
All Directors have separate and independent access to senior management and to the Company Secretary. The Company Secretary or his representatives administer, attend and prepare minutes of the Board meetings, and assist the Chairman in ensuring that the Board procedures are followed and reviewed so that the Board functions effectively. The Company Secretary or his representatives also advise the Board on governance matters, and assist the Board on compliance with the Company’s Bye-Laws and relevant rules and regulations, including requirements of the Listing Manual of the Singapore Exchange Securities Trading Limited (SGX-ST).
The appointment and the removal of the Company Secretary should be a matter reserved for the Board.
The Board, in the furtherance of their duties, may either individually or as a group, to take independent professional advice at the expense of the Company.