CORPORATE GOVERNANCE STATEMENT
YEAR ENDED 31 DECEMBER 2015
Board Performance (Principle 5 of the Code)
The Board supervises the management of the business and affairs of the Company and the Group. Apart from its statutory duties,
the Board reviews and approves the Company’s and the Group’s strategic plans, key operational initiatives, major investments and
funding decisions, annual business plans, and reviews the financial performance of the Company and the Group and those subsidiary
companies or subsidiary corporations whose financial statements are consolidated with the Company’s financial statements. The Board
also evaluated the performance and compensation of key management personnel.
The Nominating Committee has implemented a process which requires each Director to submit an assessment of the Board and the
Board Committees, and a peer assessment of each of the other Directors on the Board to assess the Director’s contributions to the
effectiveness of the Board. These detailed forms assess Directors in various different areas and competencies, including their attendance
and contributions at meetings, preparedness for meetings and their interactive and interpersonal skills. The responses are collated by the
external Company Secretary and a consolidated report is submitted to the Nominating Committee. The responses are then discussed by
the Nominating Committee for the recommendations to be made to the Board.
As described below, the Remuneration Committee, in consultation with Hay Group Pte Ltd (“Hay Group”), recommended to the Board
specific remuneration packages appropriate for each executive Director and the Directors’ fees payable to the non-executive Directors.
During this process, the Hay Group and the Remuneration Committee assessed the contributions and performance of each Director in
addition to considering other relevant factors.
Access to Information (Principle 6 of the Code)
The Board has separate and independent access to management and the Company Secretary, and is free to request for additional
information as needed to make informed decisions. Management provides the Board with reports of the performance, financial position
and prospects of the Group and those subsidiary companies or subsidiary corporations whose financial statements are consolidated with
the Company’s financial statements, and these are reviewed by the Board at each Board meeting. Monthly management accounts of the
Company and its key subsidiaries are also provided to the Directors. Directors may obtain independent professional advice in furtherance
of their duties, at the Company’s and the Group’s expense.
REMUNERATION MATTERS (Principles 7, 8 and 9 of the Code)
The members of the remuneration committee (the “Remuneration Committee”) were Mr Chow Yew Hon (Chairman of the Remuneration
Committee), Mr Lim Jun Xiong Steven and Mr Chan Pengee, Adrian.
According to the Remuneration Committee’s terms of reference, the Remuneration Committee’s principal functions are as follows:
(a)
reviewing and recommending to the Board, a general framework of remuneration for the Directors and key management
personnel
2
;
(b)
reviewing and recommending annually to the Board, the specific remuneration packages for each Director as well as for the
key management personnel, and in its review, to cover all aspects of remuneration, including but not limited to Directors’ fees,
salaries, allowances, bonuses, options, share-based incentives and awards and benefits-in-kind;
(c)
reviewing annually the remuneration of employees who are immediate family members
3
of a Director or CEO whose remuneration
exceeds $50,000 during the year;
(d)
reviewing the Company’s obligations arising in the event of termination of the executive Directors and key management
personnel’s contracts of service;
(e)
ensuring that existing relationships, if any, between the Company and its appointed remuneration consultants will not affect the
independence and objectivity of the remuneration consultants; and
(f)
reviewing whether executive Directors, non-executive and independent Directors and key management personnel should
be eligible for options, share incentives, awards and other benefits under any one or more employee share option scheme,
share-incentive or award scheme from time to time established or implemented by the Company.
2
“
Key management personnel
” shall mean the CEO and any other persons having authority and responsibility for planning, directing and controlling
the activities of the Company.
3
An “
immediate family member
” refers to spouse, child, adopted child, step-child, brother, sister and parent.
HONG FOK CORPORATION LIMITED
ANNUAL REPORT 2015
13
