CP ALL Plc. and its Subsidiaries (“Company”) are committed in operating our business in a manner that will resonate sustainability. This shall be achieved through implementation of a management system, which uphold good governance principles rooted in ethics, equality, traceability, accountability, and responsibility to all stakeholders. The Company complies to relevant laws and regulatory requirements, while simultaneously conforming our practices with international standards. This is in accordance to our goal to create values to society, to address and mitigate environmental impacts, as well as adapting to changing contexts.
The Company’s corporate governance policy and code of conduct encompass 5 key areas: shareholders’ rights, equal treatment of shareholders, stakeholders’ role, information disclosure and transparency, and committee responsibilities. The Company has reviewed and revised our policy and guidelines to be in line with current situations, in additional to compliance to applicable laws and international standards. This was accomplished via implementation of Corporate Governance Code (CG Code), issued by the Securities and Exchange Commission (SEC), in the Company’s business contexts.
The Company has created a Business Ethics Handbook and Code of Conduct. The documents are to be used as guidelines for the Board, management team, and Company employees. They support them in maintaining an ethical performance in their roles. The guidelines adheres to laws, transparency, to the Company’s commitment to fairness and ethics, customer-centric approach, social responsibility, political neutrality, equal treatment of all stakeholders; this is in additional to non-involvement in human right violations, anti-corruption, non-acceptance of compensation beyond common practice, anti-bribery, no conflicts of interests, and preclusion of activities involving Intellectual Property (IP) violations.
Board of Directors consists of 15 members including
- Executive Directors 5 persons
- Non-Executive Directors 10 persons which are as follows: Independent Directors 5 persons (account for one-third of Board members) , Non-Managing Directors 5 persons
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. Reflecting in nomination process, CP ALL respects and supports diversity of nomination person in term of gender, background, nationality, race, trust, and religion.
- Non-Executive Directors : The directors who do not hold a position in the management, may or may not be an independent director, and are not involved in the day-to-day operations of the organization.
- 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.*
- Executive Directors: The directors who hold a position in the management and are involved in the day-to-day operations of the organization.
* Qualification of Directors Reference to CP All’s Board Charter
Board of Directors’ Meeting
- 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 and the dates of the Board of Directors’ Meetings are predetermined 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
- In 2018, a total of 8 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. In addition, there was one Non-Executive Directors Meeting in 2018.The attendance of the Board of Directors at the meetings was not less than 80 percent.
- 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.
- 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 also is a good opportunity for the management to get to know the high-level executives for further job-handover.
- After the Board of Directors’ Meetings, the minutes were prepared, approved by the Board and filed at the Company Secretary Office for future reference and verification by directors and related persons.
- In the consideration of any issue, the directors are entitled to look at or check the related documents: ask the management to provide additional information and bring in outside consultants or experts to provide, at the Company’s expense.
The Company’s Board has setup 3 committees. All of which are independently carrying out their duties in accordance with the charter, and are directly responsible to the Company Board. These committees include:
1. Audit Committee In addition to financial auditing, the committee also verifies the Company’s performance to ensure compliance to policy, regulations, legal requirements, and rules from regulatory authorities.
It also assesses and ensures that there is a robust internal control system, internal audit system and stringent risk management system. There are consultations conducted with independent, third-party financial auditors to surface insights on financial statements and internal controls. Findings and recommendations are reported to the
Company’s Board Meeting every quarter. For immediate improvement, the Company has implemented these recommendations from auditing committee and external auditors. Intervention results will be reported in the following Board meeting.
2. Sustainability and Corporate Governance Committee The Committee is responsible for drafting the corporate governance policy, anti-corruption policy, relevant code of conducts, business ethics code, and good work practice. The aforementioned policies and codes of conduct are regularly revised annually. This helps ensure compliance to international standards, governmental and relevant authority’s regulations.
The committee also produces reports summarizing performance and recommendations to the Board of
Directors. The said submission will address corporate relevant areas, comprises: corporate governance, anti-corruption policy, social responsibility, sustainability management, as well as relevant code of conduct.
There are two submissions per year. Furthermore, the Committee monitors the Board’s and employees’ compliance alike. The monitoring considers corporate governance policy, anti-corruption policy, sustainability policy. Compliance audits and assessment are simultaneously conducted with the Board and Management. Both would make recommendations in light of policy compliance.
3. Remuneration and Nomination Committee
Consider and determine the criteria for the remuneration and types of remuneration for directors and key executives for proposing to the Board of Directors. Consideration is given to both cash and non-cash payment benchmarking to leading companies in the same industry; the individual’s performance, experience, duties, role and responsibilities; business expansion; the Company’s financial status and operating results; and the Company’s long-term strategy and goals in conjunction with the General Assembly’s approval. This committee also appraises the criteria and process to nominate individuals with appropriate qualification as a Board member, as well as making selection
Consider and determine the criteria and procedures for selecting and nominating persons who possess the appropriate and required qualifications to be appointed as a Director, corresponding with the Company’s business strategy; as well as select the final nominees in accordance with the established procedures such as consider the names and background of the nominees from the existing Committee, open opportunities for shareholders to nominate persons for director positions, consider using external consultants, or consider individuals from the Pool of IOD Chartered Directors, with consideration to appropriate and diversified qualifications in terms of qualifications, profession, gender, race, ethnicity, country of origin nationality or cultural background, skills, age, experience, , and special abilities that will benefit the Company; and propose to the Board of Directors for consideration and approval. This committee also appraises the criteria and process to nominate individuals with appropriate qualification as a Board member, as well as making selection, accordingly. This is supplemented with nominees from shareholders. Shareholders’ opinions will also be noted in the Board’s meeting, prior to being proposed to shareholders, in light of the Board’s nomination.
Sustainability and Corporate Governance Committee
Board of Director and Subcommittee Performance Evaluation
The assessment mechanisms for corporate governance performance is a crucial driver facilitating the performance to meet expectations. It enables more effective development of corporate governance activities. The Company is cognizant of the assessment’s importance and accordingly, set 2 assessments for the Board: one for the Company’s Board as an entire Board, and the other, as an individual. The sub-committee comprises Audit Committee, Sustainability and Corporate Governance Committee, Board Remuneration and Nomination Committee. The Committees’ effective performance is reflected in 2018’s performance score. The average result is in ‘Excellent’, with the scores being 87%, 88%, 100%, 90% and 92%, respectively. 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 is in the range of ‘Excellent.’
For evaluation and consider extra remuneration payment to executive board, Board meeting resolution of the Remuneration and Nomination Committee.
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. High-Level Executives’ Remuneration Policy and Criteria (Refer to Annual report of CPALL page 92 and 93)
The Board of Directors determines the policy on high-level executives’ remuneration to be at an appropriate level, fair, and in line with their responsibility in order to meet the expectations of various stakeholder groups and comply with related laws and regulations. The Remuneration and Nomination Committee has hired an independent expert to gather information and provide advice on establishing an appropriate compensation criteria and structure for high-level executives in order to present recommendations to the Board of Directors for approval. The following factors were taken into consideration:
- The Company’s operating results with consideration to various pre-determined business indicators
- Comparison of the Company’s operating results with other companies in the same industry
- Ability to develop business and improve business efficiency of each business unit each year
- Benchmarking with remuneration rates in the same industry
In 2018, the Board of Directors considered and approved the criteria and indicators for compensating high-level executives in the form of special bonus in addition to the current bonus in order to motivate and drive executives to achieve new goals. This will be considered from achievement of 3 goals, that is, customer satisfaction, ROE, and the Dow Jones Sustainability Index (DJSI) scores, which evaluate the effectiveness of business operations in accordance with the Company’s sustainable development. (Refer to board meeting resolution and RNC meeting resolution)
Agenda 4: Consider and approve the remuneration for executive directors for the year 2019
The Chairman of the Meeting assigned Mrs. Nutthawalee Klawthanong to report to the meeting as follows:
Indicators and target values to be a special pension criteria for the executive directors of the year 2019 to propose to the Remuneration and Nomination Committee. Considerations are as follows.
Indicators and targets for special pension payments for the year 2019.
Note: The company does not determined remuneration payment to key executives in the form of common shares or binding with long-term company’s performance and has no rules for key executives to hold common shares of the company. By the way, the company provides Employee Joint Investment Program – EJIP to encourage employees for ownership and incentivize loyalty and determination to grow with the company. To provide incentives and keep personnel working with the Company for a long time. The Employee Joint Investment Program No.3 has duration of 5 years. Executives who are eligible for the EJIP must have been employed with the Company for at least 3 years. The Company deducts 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 2018, high-level executives joined the EJIP and the Company paid a total of Baht 11.604 million in contribution.
Moreover, the company has realized importance of all executives and staff’s collaboration to achieve the mentioned goal. So, the company considers to set a corporate KPI and the balanced goal of accounting, customers and social focusing, internal process development for excellence and organization learning such as sustainability performance, customer engagement. These KPI’s results will be reviewed every single quarter and year which will be also related to consideration on bonus increasing payment for executives and all staff.
Highlight Performance in Corporate Governance and Business Ethics
There has been notable performance in corporate governance and business ethics. In 2018, the Company has foreseen the importance of continuously building understanding and awareness. As it is the foundation for performance alignment, the Company published a Business Ethics and Code of Conduct handbook for executives and all level of employees. The training encompasses 100% of management-level executives, or equivalent. Training’s targets have also been set. All participants must pass CG Quiz by 100%. There are onboarding trainings addressing anti-corruption, which will be elaborated further in the net part. Furthermore, the Company has conducted a survey on employees’ understanding and awareness of corporate governance. The survey shows that 97% of the employees acknowledge, understand, and are aware of how to conduct themselves. The Company set additional component of corporate governance policy on data privacy protection policy and guideline; anti-laundering policy, occupational health, safety and environment policy. To affirm the importance and the Company’s dedication to operate with good governance, the Company’s Board, Executives and employees took a stance together on the 12th December 2018. It was the Anti-Corruption day, and all came together to commemorate and declared their dedication for ‘Good Corporate Governance, Against Corruption.’ Expectations were communicated to suppliers, along with efforts to build their understanding and provide them trainings.