CDL is committed to maintaining good corporate governance and business integrity in all its business activities. The Company has adopted a set of internal guidelines on corporate governance (“Internal CG Guidelines”) based on the provisions of the Code of Corporate Governance 2005 (“the CG Code”) aligned with the Council on Corporate Disclosure and Governance (“CCDG Code”). For more detailed information on the Company’s corporate governance practices, please refer to the Company’s Corporate Governance Report as set out in the Company’s Annual Report 2010 (pages 24 to 34).
The Company recognises the importance of strong corporate governance in the pursuit of continued and sustainable growth in the Group’s economic, social and environmental performance, and to ensure effectiveness of the Company’s CSR initiatives and activities.
The Board of Directors (the “Board”) has general oversight of the Company’s business, with its primary functions being the setting of broad policies, providing guidance and approving strategic direction and plans for the Company, reviewing Management performance, establishing and overseeing the framework for internal controls, risk management and financing reporting, and assuming the responsibility for good corporate governance. The Board comprises 8 members, all of whom are non-executive Directors, except for the Chairman and the Managing Director. There is a strong and independent element on the Board with 5 out of the 6 non-executive Directors considered to be independent, each viewed by the Board as being capable of maintaining his objectivity and independence at all times in the carrying out of his duties and responsibilities as an independent Director.
The responsibilities of the Board are carried out either directly by the Board or through committees established by the Board, which include the following:
(i) The Board Committee, comprising 5 Directors, the majority of whom are non-executive, which deliberates on operational matters requiring Board review.
(ii) The Audit Committee, comprising 4 non-executive and independent Directors, which assists the Board, inter alia, in providing an independent review of the effectiveness of the CDL Group’s financial reporting process and material internal controls, encompassing financial, operational, compliance and risk management controls. Such review is undertaken through a monitoring programme involving internal and external audits.
(iii) The Nominating Committee, comprising 3 Directors, the majority of whom including the Chairman are non-executive and independent, which assists the Board in the recommendation and review of all board and committee appointments and re-appointments, determination of independence of each Director and review and recommendation to the Board of new director appointments. The Nominating Committee also evaluates the Board’s performance as a whole on an annual basis, using objective and appropriate quantitative and qualitative criteria with quarterly performance indicators which include comparisons of the Company’s performance (including segmented performance) for the financial period under review against the Company’s performance for the corresponding period in previous years and also against industry peers and industry averages and other indicators such as the Company’s share price performance over a historical period and against industry peers.
(iv) The Remuneration Committee, comprising 3 non-executive Directors, all of whom including the Chairman are independent, which assists the Board in the review and recommendation for endorsement of the Board, a framework of remuneration and specific remuneration packages for each Director, including the Executive Chairman, the Managing Director and also for the Group General Manager (who is not a Board Member). The Remuneration Committee in its review role, also ensures that remuneration policies of the Company are generally in line with the strategic objectives and corporate values of the Company. Such remuneration framework, which includes both fixed and variable components, takes into account, amongst other factors, the individual’s performance, the performance of the Group and industry practices.
Mr Kwek Leng Beng is the Executive Chairman of the Company and the Chairman of the Board. The holding of these dual roles by Mr Kwek Leng Beng, together with the strengths brought to these roles by a person of Mr Kwek Leng Beng’s stature and experience, has been considered by the Board. There are internal controls in place to allow effective oversight by the Board of the Company’s business to ensure appropriate balance of power and authority is exercisable by the Board to enable objective decision-making in the interests of the Company. In view of the management structure in place, the Board is of the view that it is currently unnecessary to effect a separation of the role of the Chairman of the Board from that of the Executive Chairman to facilitate the Group’s decision-making and implementation process.
As the most senior executive in the Company, Mr Kwek Leng Beng provides overall leadership and strategic vision for the CDL Group. He is assisted by his brother, Mr Kwek Leng Joo, the Managing Director of the Company, in charting broad direction, strategies and policies of the CDL Group. Mr Kwek Leng Joo also has charge of the overall co-ordination of the Management team for the effective implementation of business strategies and policies.
The Company has adopted an internal Code of Business and Ethical Conduct crystallising the Company’s business principles and practices with respect to matters which have ethical implications. The Code provides a communicable and understandable framework for staff to observe the Company’s principles such as honesty, integrity, responsibility and accountability at all levels of the organisation and in the conduct of the Company’s business, in their relationships with customers, suppliers, competitors and amongst employees, including situations where there are potential conflicts of interests.
The Company has in place a whistleblowing procedure where staff of the Company can raise in confidence, whether anonymously or otherwise, concerns on possible improprieties relating to accounting, financial reporting, internal controls and auditing matters without fear of reprisals in any form. Under these procedures, arrangements are in place for independent investigation of such matters raised and for appropriate follow up action to be taken. The Audit Committee has oversight responsibility of this policy. Such policy is communicated to all staff company-wide and its scope includes possible improprieties involving fraud or deliberate error in the recording, maintaining, preparation or audit of the Group’s financial records and statements, use of the Group’s assets, funds or property for illegal, improper or unethical purposes, acts of corruption or bribery, and improper actions or omissions which are likely to endanger employees, customers, suppliers and/or members of the public.