Corporate Governance

Corporate of Good Governance, Manage Transparently

KEY PERFORMANCE IN 2020


Risks and Opportunities


CP ALL Plc. and its subsidiaries (“the Company”) recognizes the importance of corporate governance. The Company is confident that business operations in compliance with good governance guidelines enhance the Company’s competitive edge, as well as stable and sustainable growth. This reflects efficient organizational management, one which is ethical, fair, transparent, and traceable. Stakeholders’ trust is also boosted in the long run. Furthermore, appropriate management of risks toward the Company’s operation reinforces the Company’s stability, strengthening its sustainability. Therefore, in order to create sustainable value through corporate management system, the Company is determined to stipulate an effective corporate governance structure – under possible changes. Such structure ensures transparency and traceability, as well as compliance to the laws, regulations, rules and international standards. The Company also builds understanding and communication to employees, enabling further benefits for the Company’s business operations and society.

Management Approach


The Company has set the Sustainability and Governance Committee to stipulate corporate governance policy, anti-corruption policy, business ethics and code of conduct. Furthermore, the charter of the Committee has specified duties and responsibilities that cover reviewing policies to ensure suitability to any changes, as well as alignment to corporate governance principles of government authority and international standards. In 2020, the Company has promoted understanding and knowledge of governance and anti-corruption principles for all levels of employees. This has always been the core principle of the Company’s business operations, to ensure all levels of employees are of good conscience and actively partake in the efforts against all forms of corruption. Building understanding and knowledge to all employees are leading to enable good and transparent operations. Additionally, there are also Governance Sub-Committee and Sustainable Development Sub-Committee, which serve as an important mechanism in driving the Company’s corporate governance policy, as follows.

The Company has set up independent sub-committees operating and serving under the Board of Directors. This comprises 1) Audit Committee 2) Corporate Sustainable Development and Governance Committee 3) Remuneration and Nomination Committee, which have duties and responsibilities as follows.

Corporate Governance Structure

Key Project in 2020


Business Ethics and Code of Conduct Training

Objective To ensure all employees are aware and understand the practice, in-line with corporate governance principle. Employees should also be able to practice good governance accurately, whilst remaining ethical.

The Company has provided training on Business Ethics and Code of Conduct for executives and all levels of employees. The content is annexed into the On-boarding training for new employees, to ensure all employees are aware and understand the practice, in-line with corporate governance principle. Employees should also be able to practice good governance accurately, whilst remaining ethical. Furthermore, all employees trained must take CG Quiz to assess their understanding upon completion of training. In 2020, the Company has additional training to store manager of Store Business Partner and sub-areas operation.

Results and Benefits

CG Self-Assessment 2020

Objective To utilizing the information as guideline for awareness of corporate governance’s importance.

The Company recognizes the importance of leader in General Manager-level (equivalent) in corporate governance.
Thus, the Company has developed a CG Self-Assessment to assess the level of compliance and governing in
accordance to corporate governance principle. This includes utilizing the information as guideline for awareness
of corporate governance’s importance, as follows.

Other Information


Management Structure by the Company’s Board of Directors

1. Board of Directors As of 31 December 2020, the Company’s Board of Directors consists of 15 members including:

1) Executive Directors 5 persons
2) Non-Executive Directors 10 persons, which are as follows:
– Independent Directors 5 persons (account for one-third of Board members)
– Non-executive Directors 5 persons (account for one-third of Board members)

Names of the Board of Directors

Definition

1) Executive Directors : The directors hold a position in the management and are involved in the day-to-day operations of the organization.
2) Non-Executive Directors : The directors who do not hold a position in the management, may or may not be independent directors, and are not involved in the day-to-day operations of the organization.
3) Independent Directors : Independent or outside directors who are not engaged in the day-to-day management of the organization and are not major shareholders. Furthermore, independent directors must have no such connection with a major shareholder, group of major shareholders, or other stakeholders.
4) Authorized Directors : Certification documents of the Company stipulate that the binding signatures must include 2 authorized directors – consisting of any authorized director from both Executive1 and Non-Executive2 members, excluding the Chairman and Independent Directors for the existence of independence in compliance with good corporate governance principles. Both directors must sign and affix the Company’s seal.

* Qualification of Directors Reference to CP All’s Board Charter

The Company’s Board plays an important role in driving the organization, entrusted with the responsibility to ensure our corporate governance approach facilitates the Company towards the objectives and the goals of creating the highest value. Good corporate governance is built on the foundation of social and environmental responsibility, equal treatments to stakeholders—guided by the Corporate Governance and Anti-Corruption Policies. The Company’s corporate governance approach, defector, complies with relevant legal requirements, corporate goals and regulations, the Board’s charters, guidelines, and resolutions, as well as Shareholders’ resolutions.

More info of the Board of Directors

2. Criteria and Procedures for Recruiting of the Board of Directors

The Remuneration and Nomination Committee considering criteria and procedures for recruiting qualified persons to be directors in accordance with the business strategy of the Company by creating a Board Skill Matrix* to assemble in recruiting including selecting persons according to the nomination process that has been defined for example, considering the names and profiles of those who were nominated as directors from the previous committee; whereas shareholders to nominate directors to take positions or consider the use of external consulting firms or consider a person from a career committee. The nomination process has been conducted systematically and transparently by considering qualifications that are suitable and varied in terms of qualifications, skills, age, experience, expertise and specific talents that are required in the Board of Directors. The manner will aim for creating benefits for the Company and proposing comments to the Board of Directors by inconsideration or without a limitation or barrier on gender, race or ethnicity, religion, nationality, country of origin or cultural background of the candidates. These practices ensure that the Company has a qualified and diversified the board of directors properly that enhances on achieving a present and future goals and strategy of the Company

The Board of Directors Skill Matrix

For more details of the Board industry experience in accordance with the GICS Level 1classification at —> Board Industry Experience

3. The Board of Directors Positions in Sub-Committees

There are 3 Sub-Committees under the Company’s Board of Directors – the Audit Committee, the Sustainability and Corporate Governance Committee and Remuneration and Nomination Committee.

1) Audit Committee

2) Sustainability and Corporate Governance Committee

3) Remuneration and Nomination Committee

4. The Performance of the Committees

4.1 Members Attendance

1. The Board of Directors’ Meeting is held once every quarter on a normal basis. Directors must regularly attend the Board of Directors’ Meetings to be informed of and jointly make decisions on the Company’s business operations. At least 7 Board of Directors’ Meetings are organized each year.

2. The Company encourages all director to attend at least 75% of all board meetings held during the year by predetermined the dates of the Board of Directors’ Meetings one year in advance so that directors can arrange their schedule to attend the meeting. However, additional meetings may be called if there are special matters that require the Board’s approval or urgent matters that require the Board’s consideration.

3. In 2020, a total of 10 Board of Directors’ Meetings were held which was appropriate for the duties and responsibilities of the Board and the operations of the Company in the previous year. 98% of the Directors attended the meetings. The Company also held the Non-Executive Directors Meeting in 2019 which Non-Executive Directors attended 100%.

4. The meeting’s invitation, agenda, and relevant documents were sent to the directors at least 7 days prior to the meeting date to allow sufficient time for the directors to study the information before decision-making. In the consideration of any issue, the directors are entitled to look at or check the related documents and ask the management to provide additional information.

5. The Company have yet been implemented the policy for the minimum quorum of at least 2/3 of the Board member for board decisions to be valid to facilitate the participation in the board meeting. The Company, however, continuing act in accordance with this rule for many years which is shown in the table of Names of the Board of Directors and Board Members Attendance for the Year 2020.

6. In every meeting, the management had been asked on questions raised by directors. The directors exercised careful, independent and transparent judgment with fair consideration for the interests of shareholders and stakeholders. Directors with vested interests in the matter under consideration must leave the meeting during consideration of that matter. The Chairman also provided sufficient time for directors to discuss problems and possible solutions. Management related to the presented agenda item were invited to the meeting to provide additional details and answer questions, which is also a good opportunity for the management to get to know the high-level executives for further job-handover.

7. After the Board of Directors’ Meetings, the minutes of meeting were prepared, approved by the Board and filed at the Company Secretary Office for future reference and verification by directors and related persons. In addition, the Company Secretary coordinated to all departments to strictly perform its duties in line with the resolutions of the Board of Directors.

8. In some cases, the Company organized for outside consultants or experts to provide advice or additional information to the Board of Directors, at the Company’s expense.

Names of the Board of Directors and Board Members Attendance for the Year 2020

* Executive Director
Remark : Shareholder’s Meeting was held during the pandemic of the Coronavirus Disease 2019 (COVID-19) which limited the number of meeting participants.

4.2. Board of Director and Sub-Committee Performance Evaluation

The Company has established an evaluation process of the performance of the Board of Directors of the Company and all sub-committees on an annual basis at least once a year. This is to enable the Directors of the Company to review and consider their respective performance outputs and achievements together with the various associated issues or obstacles in discharging their duties during the year, which will then enable them to improve their effectiveness as the Board of Directors through having a clearer understanding of their individual responsibilities, as well as to enhance the working relationships between the Board of Directors and the Management. The performance evaluation of the Board of Directors is divided into 2 types, that is, assessment of the overall performance of the Board of Directors as a whole and self-assessment of the performance of the individual director.

The performance self-evaluation of the Board of Directors as a group is in ‘Excellent’ with the achieved overall score of 88%; whereby there was a ‘Good’ with an achieved overall score of 12%. The performance self-evaluations of Board Directors on an individual basis is in ‘Excellent’ with the achieved overall score of 82%; whereby there was a ‘Good’ with an achieved overall score of 18%. Furthermore, the Company was rated for Corporate Governance Report of Thai Listed Companies (CGR) conducted by the Thai Institute of Directors (IOD) The Institute itself may be considered an external organization without stakes with the Company. The Report helps the Company ensures its corporate governance is effective and moving towards the right direction. The results show alignment with leading Thai companies’ performance. The Company’s assessment score is 5 stars with the range of ‘Excellent’.

Remuneration of Individual Director

The Remuneration and Nomination Committee considers payment criteria and forms of director compensation before presenting to the Board of Directors and the shareholders’ meeting for approval every year. The remuneration of directors is adjusted to be comparable to other companies in the same industry and appealing enough to attract and retain quality directors (Refer to Annual Report of CP ALL page 172).

(1) Cash Remuneration

The 2020 Annual General Meeting of Shareholders on July 16, 2020 approved the same rate of remuneration for directors which approved previously in 2019, and as the same rate as the Annual General Meeting of Shareholders on 21 April 2016 has approved as follows:

1. Independent Director who is the Chairman of the sub-committee120,000 Baht/person
2. Independent Director who is the member of the sub-committee100,000 Baht/person
3. Independent Director who is not a member of the sub-committee80,000 Baht/person
4. Chairman120,000 Baht/person
5. Vice Chairman100,000 Baht/person
6. Director60,000 Baht/person

The Independent Director who is the member of several sub-committees shall receive only the highest rate of only one sub-committee. In addition, the shareholders’ meeting approved the bonus for directors at the rate of 0.50% of the dividend paid to the shareholders. The Chairman of the Board will allocate the appropriate amount of bonus to each director.

Remuneration for Directors from 1 January – 31 December 2020 (Unit : Baht)

* Mr. Dhanin Chearavanont receive bonus from the chairman position during Januar 1 – May 8 , 2020, and Mr. Soopakij Chearavanont receive bonus from the chairman position during May 9 – December 31, 2020

In addition, the Company’s Audit Committee received remuneration of Baht 38,000 from a subsidiary company (Panyapiwat Institute of Management) for being their Audit Committee in 2020.

Remuneration for Directors of Subsidiaries’ company (Siam Makro Public Co., Ltd.)
from January 1 – December 31, 2020 (Unit : Baht)

(2) Other Remuneration

– None

CEO** and Directors’ Compensation – Success Metrics

Since 2018, the Company’s board gave consideration and approved special remuneration criteria for executive directors in the form of special gratuity. This would be added on top of the normal bonus plan. The arrangement aims to build incentives and drive for executive directors to continue driving the Company to achieve its targets. Considerations are given base the following success metrics.

1) Financial Returns Success indicators such as return on equity (ROE)

2) Corporate Reputation from Stakeholder Perspective Success indicators such as customers’ satisfaction

3) Social and Environmental Responsibilities Success indicators such as Sustainability Performance (Dow Jones Sustainability Index (DJSI) Score)

Remuneration for Executive Committee and Executive Officers (High-level Executives)

(1) Cash Remuneration

2020 Total company accumulated cash remuneration24,114 million baht
Payment for Executive Committee and Executive Officers1.67%

(2) Other Remuneration

1. Provident Fund The Company has established a provident fund, with the Company contributing 2 percent of monthly salary. In 2020, the Company contributed a total of Baht 6.642 million to the provident fund for high-level executives and paid Baht 6.035 million and Baht 4.839 million in 2019 and 2018 respectively.

2. Employee Joint Investment Program (EJIP) The Company has established an Employee Joint Investment Program (EJIP) to provide incentives and keep personnel working with the Company for a long time. The 3rd EJIP which is a five-year term will end on 30 June, 2022. Executives who are eligible for the EJIP must work for the Company for at least 3 years. The Company will deduct 5 percent or 7 percent (on a voluntary basis) from the employee’s monthly salary. The Company contributes 80 percent of the deductible amount from the employee in each month. In 2020 (January – May), the Company paid Baht 4.286 million for high-level executives who joined the EJIP, and paid Baht 12.205 million and Baht 11.604 million in 2019 and 2018 respectively.

Remark: Due to the COVID-19 pandemic, the Company has temporarily suspended the Employee Joint Investment Program (EJIP) starting from June 1, 2020, to relieve the burden of employees who have voluntarily joined the program, until the COVID-19 situation eases.

For more details —–> Annual Report 2020 , SD Report 2020

Related Policy and Guideline

Corporate Governance PolicyDownload
Corporate Governance Guidelines for the Board of DirectorsDownload
Charter of the Board of DirectorsDownload
Audit Committee CharterDownload
Remuneration and Nomination Committee CharterDownload
Sustainability and Corporate Governance Committee CharterDownload
Corporate Legal Compliance GuidelineDownload
Guidelines to Trade Competition PolicyDownload
Conflict of Interest Policy and GuidelinesDownload