CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 CORPORATE GOVERNANCE 42 43 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/reelection 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 having regard to the provisions in the applicable Listing Rule 210(5)(d) and Provision 2.1 of the 2018 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. 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 Philip Yeo Liat Kok, Mr Daniel Marie Ghislain Desbaillets and Mr Chong Yoon Chou are due to retire by rotation at the 60th Annual General Meeting (“2023 AGM”), and being eligible, have offered themselves for re-election at the 2023 AGM. The NC has considered their contribution and performance and recommended to the Board to nominate their re-election at the 2023 AGM. CORPORATE GOVERNANCE Mr Tan Kian Seng who was appointed in March 2023 will retire at the 2023 AGM, and being eligible, has offered himself for election at the 2023 AGM. The NC has recommended to the Board his election at the 2023 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 independent NED; 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 their dates of first appointment and last election/reelection 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 preceding five years, and other relevant information; ‘Additional Information on Directors seeking election/re-election’; and the ‘Notice of Annual General Meeting’ for information on Directors proposed for election/re-election at the 2023 AGM. Succession Planning for the Board, the Board Chairman and the KMP (Provision 4.1) The Board believes in carrying out succession planning for itself, the Board Chairman and the KMP to ensure continuity of leadership. It has in place a formal Board (including the Board Chairman) 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’s 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. As part of the Board succession plan, Mrs Wong Ai Ai was appointed to the Board as an ID in January 2022. Mrs Wong’s broad experience, especially in corporate law, provides further diversity to the core competencies and skill set of the Board. To further strengthen the Board skill set in the areas of hospitality and finance, Mr Tan Kian Seng was appointed as an 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 2022 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 towards the effectiveness of the Board and 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 on 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 evaluation process for the Board Chairman’s and the individual 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 reelection 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.
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