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ABOUT TELECHOICE GROUP | OUR BUSINESSES | OUR REGIONAL PRESENCE | INVESTOR RELATIONS | NEWSROOM | CAREERS |
Corporate Profile |
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Our Board of Directors and Management are committed to maintaining high standards of corporate governance, to protect the interests of our shareholders and other stakeholders. This Report describes our corporate governance practices, with reference to the principles set out in the Singapore Code of Corporate Governance. (A) Board Matters Principle 1: Board's Conduct of its Affairs Our Board is responsible for guiding our overall strategic direction, corporate governance, and providing oversight in the proper conduct of our businesses. The Board meets regularly to review our key activities and business strategies. Regular Board Meetings are held quarterly to deliberate on strategic matters and policies including significant acquisitions and disposals, the annual budget, review the performance of the business and approve the release of the quarterly and year-end reports. Where necessary, we convene additional Board sessions to address significant transactions or developments. Our President, Andrew Loh Sur Jin, is charged with full executive responsibility for the running of our businesses, making operational decisions and implementing business directions, strategies and policies. The Board has also established an Executive Committee ("EC") to oversee major business and operational matters. The EC comprises Bertie Cheng, Lee Theng Kiat, Lim Chai Hock Clive and Yen Se-Hua Stewart. Management regularly consults and updates the EC on all major business and operational issues. The Board is also supported by other Board committees which are delegated with specific responsibilities, as described under "Principle 4: Board Membership" of this Report. The Board, upon the recommendation of the Audit Committee ("AC"), has adopted a comprehensive set of internal controls, which sets out authority and approval limits for capital and operating expenditure, investments and divestments, bank borrowings and cheque signatories arrangements at Board level. Authority and approval sub-limits are also provided at Management levels to facilitate operational efficiency. Management monitors changes to regulations and accounting standards closely. Updates and briefings on regulatory requirements are conducted either during Board sessions or by circulation of papers. Newly-appointed Directors are given briefings by Management on the business activities of the Group and its strategic directions, as well as their statutory and other duties and responsibilities as directors. To help ensure compliance with the applicable securities and insider trading laws, including the Best Practices Guide of the SGX-ST Listing Manual, we have adopted and implemented our Guidelines on Dealing in Securities of TeleChoice. We send regular compliance notices to all Directors and staff. All our Directors and employees are prohibited from dealing in our securities during the period of, two weeks before the respective announcement of our first quarter, second quarter and third quarter financial results, and one month before the announcement of our full year financial results. Restrictions are lifted from the date of the announcement of the respective results. All our Directors and employees are also required to observe the applicable insider trading laws at all times. Principle 2 : Board Composition and Balance To be effective, we believe our Board should comprise a majority of Non-Executive Directors independent of Management, with the right core competencies and diversity of experience to enable them to contribute effectively. Our Board currently comprises seven (7) Directors, all of whom are Non-Executive Directors and independent of Management. Our Board comprises a majority of Independent Directors, namely Bertie Cheng, Yap Boh Pin, Yen Se-Hua Stewart and Tang Yew Kay Jackson, which helps ensure a strong element of independence in all our Board's deliberations. The composition of our Board enables Management to benefit from an outside diverse and objective perspective of issues that are brought before our Board. It also enables our Board to interact and work with Management through a robust exchange of ideas and views to help shape the strategic directions. This, coupled with a clear separation of the role of our Chairman and our President, provides a healthy professional relationship between our Board and Management, with clarity of roles and robust oversight. Profiles of each Director are found on pages 4 to 7 of this Annual Report. Principle 3 : Chairman and President We believe there should be a clear separation of the roles and responsibilities between our Chairman and President. Our Chairman and the President are separate persons in order to maintain an effective balance of power and responsibilities. Our Chairman is Bertie Cheng, an Independent Non-Executive Director. Our Chairman leads the Board and ensures that our Board members work together with Management, with the capability and moral authority to engage and contribute effectively and constructively on various matters, including strategic issues and business planning processes. Our President, Andrew Loh Sur Jin, is charged with full executive responsibility for the running of our businesses, making operational decisions and implementing business directions, strategies and policies. Our President is supported on major business and operational issues by the oversight of our EC. Principle 4 : Board Membership We believe that Board renewal must be an ongoing process, to ensure good governance, and maintain relevance to the changing needs of the company and business. As required by our Articles of Association, our Directors are subject to retirement and re-election by shareholders as part of the Board renewal process. Nominations and election of Board members are the prerogatives and rights of all our shareholders. In carrying out its functions, our Board is supported by key Board committees, namely the AC, the Remuneration Committee ("RC"), the Nominating Committee ("NC") and the EC. Each of our Board committees has been established with clear charters setting out their respective areas of authority, terms of reference and committee procedures. Other Board committees can be formed from time to time to look into specific areas as and when the need arises. Membership in the different committees is carefully managed to ensure that there is equitable distribution of responsibilities amongst Board members, to maximise the effectiveness of the Board and foster active participation and contribution from Board members. Diversity of experiences and appropriate skills are also considered, along with the need to ensure appropriate checks and balances between the different Board committees. Details of frequency and participation at our Board, AC, RC and NC meetings for FY09 are set out in Table 1. The EC meets regularly with Management. In FY09, there were four (4) meetings held between the EC and Management. Table 1
Our RC is responsible for reviewing cash and long-term incentive compensation policies for our President, senior Management and key staff. Our RC is chaired by an Independent Non-Executive Director, Bertie Cheng and also comprises Yen Se-Hua Stewart (Independent Non-Executive Director) and Lee Theng Kiat (Non-Executive Director). The members of our RC (including the Chairman) are all Non-Executive Directors independent of Management. Our Articles of Association require one-third of our Directors to retire and subject themselves to re-election by shareholders at every annual general meeting ("AGM") ("one-third rotation rule"). In other words, no Director stays in office for more than three years without being re-elected by our shareholders. In addition, a newly-appointed Director is required to submit himself for retirement and re-election at the AGM immediately following his appointment. Thereafter, he is subject to the one-third rotation rule. Principle 5 : Board Performance We believe that Board performance is ultimately reflected in our business performance. Our Board should ensure compliance with applicable laws and all Board members should act in good faith, with due diligence and care, in our best interests and the best interests of our shareholders. Our Board, through the delegation of its authority to the NC, has used its best efforts to ensure that our Directors are equipped with the necessary background, experience and expertise in technology, business, finance and management skills to make valuable contributions and that each Director brings to our Board an independent and objective perspective to enable balanced and well-considered decisions to be made. Our NC has implemented a framework for assessing Board performance, and undertakes regular reviews of our Board (and each Director's) performance, with inputs from our other Board members. The results of the Board appraisal exercise, which is conducted at least once annually, are circulated to all Directors for information and feedback. The information gleaned from the completed Board appraisal exercise(s) are taken into consideration by the NC, in determining whether there are any changes needed to the appraisal system, prior to the commencement of the next Board appraisal cycle. Principle 6 : Access to Information We believe that our Board should be provided with timely and complete information prior to Board meetings and as and when the need arises. Management provides adequate and timely information to our Board, on our affairs and issues requiring our Board's attention, as well as monthly reports providing updates on our key operational activities and financial performance. The monthly flow of information and reports allows our Directors to make informed decisions and also to keep abreast of key challenges and opportunities between our Board meetings. Frequent dialogue takes place between Management and members of our Board, and our President encourages all Directors to interact directly with all members of our Management team. Our Articles of Association provide for Directors to participate in meetings by teleconference or videoconference. Where a physical Board meeting is not possible, timely communication with members of our Board is effected through electronic means, which include electronic mail and teleconference. Alternatively, Management will arrange to personally meet and brief each Director, before seeking our Board's approval. Our Board has separate and independent access to our senior Management and the Company Secretary at all times. Our Board also has access to independent professional advice where appropriate. Likewise, our AC has separate and independent access to the external and internal auditors, without the presence of our President and other senior Management members, in order to have free and unfettered access to information that our AC may require. (B) Remuneration Matters Principle 7 : Procedures for Developing Remuneration Policies We believe that a framework of remuneration for our senior Management and key staff should not be taken in isolation. It should be linked to the development of our senior Management and key staff to ensure that there is a continual development of talent and renewal of strong and sound leadership for our continued success. For this reason, our RC oversees the compensation package for our senior Management and key staff. All members of our RC are Non-Executive Directors, independent of Management. From time to time, we may co-opt an outside member into our RC to provide additional perspectives on talent management and remuneration practices. Our RC has access to expert professional advice on human resource matters whenever there is a need to consult externally. In its deliberations, our RC takes into consideration industry practices and norms in compensation. Our President is not present during the discussions relating to his own compensation, and terms and conditions of service, and the review of his performance. However, our President will be in attendance when our RC discusses the policies and compensations of our senior Management and key staff, as well as major compensation and incentive policies such as share options, stock purchase schemes, framework for bonus, staff salary and other incentive schemes. All decisions at any RC meeting is decided by a majority of votes of RC members present and voting (the decision of the RC shall at all times exclude the vote, approval or recommendation of any member having a conflict of interest in the subject matter under consideration). We remunerate our Directors with Directors' fees which take into account the nature of their responsibilities and frequency of meetings. Directors' fees for our Directors for FY09 (set out in Table 2 below) are subject to the approval of our shareholders at the upcoming Annual General Meeting. Table 2
Notes:-
There is no employee who is an immediate family member of a Director or the President, whose remuneration exceeds S$150,000 a year. Table 3
Notes:-
There is no employee who is an immediate family member of a Director or the President, whose remuneration exceeds S$150,000 a year. (C) Accountability and Audit We have always believed that we should conduct ourselves in ways that deliver maximum sustainable value to our shareholders. We promote best practices as a means to build an excellent business for our shareholders. Our Board has overall accountability to our shareholders for our performance and in ensuring that we are well managed. Management provides our Board members with monthly business and financial reports, comparing actual performance with budget and highlighting key business indicators and major issues that are relevant to our performance, position and prospects. Principle 11 : Audit Committee Our AC consists of three (3) Non-Executive Directors, the majority of whom including the Chairman are Independent Directors. The AC members are Yap Boh Pin as Chairman, Sio Tat Hiang and Tang Yew Kay Jackson. Our AC members bring with them invaluable professional and managerial expertise in the accounting, financial and telecommunications sectors. Our AC's responsibilities include reviewing our annual audit plan, internal audit processes, the adequacy of internal controls, Interested Party Transactions for which there is a shareholders' mandate renewable annually. Our AC has full authority to commission and review findings of internal investigations into matters where there is any suspected fraud or irregularity or failure of internal controls or violation of any law likely to have a material impact on our operating results. Our AC is also authorised to investigate any matter within its charter with the full co-operation of Management. Our AC reviews and approves the quarterly, half-yearly and annual financial statements and the appointment and re-appointment of auditors before recommending them to the Board for approval. Our AC meets with the external and internal auditors, without the presence of Management, at least once during the year, to discuss matters it believes should be raised privately. Our AC reviews the nature and extent of non-audit services provided by the external auditors during the year to assess the external auditors' independence. Our AC is satisfied with the independence and objectivity of the external auditors and has confirmed with the external auditors that the provision of non-audit services by external auditors would not affect their independence. In line with our commitment to a high standard of internal controls and its zero tolerance approach to fraud, we have put in place a whistle blower policy (the "Policy") providing employees a direct channel to the AC, for reporting suspected fraud and possible impropriety in financial reporting, unethical conduct, dishonest practices or other similar matters. This Policy aims at protecting employees against discrimination or retaliation as a result of their reporting information regarding, or their participation in, inquiries, investigations or proceedings involving TeleChoice or its agents. With such a policy in place, we are able to take swift action against any fraudulent conduct and minimise any financial losses arising from such conduct. The Policy is available on our intranet that is accessible by all employees. Principle 12 : Internal Controls We believe in the benefits of having in place a system of internal controls to properly safeguard our shareholders' interests and our assets, and to better manage risks. Our AC is delegated the full responsibility to review, with our external auditors, their evaluation of the effectiveness and adequacy of our system of internal controls, and monitor the response to their findings and actions taken to correct any noted deficiencies. Our AC regularly updates the Board on internal audit findings and issues. Our AC also oversees the function of enterprise risk management. Our risk management framework is designed to provide systems and processes to enable us to take cognizance of the various risks and hence make better decisions. Major identified risk categories include strategic, operational, market and compliance risks. The risk management processes are tailored to address these categories of risks. The AC is supported by senior Management representatives who:–
Our internal audit function is carried out by TeleChoice's internal auditor (the "Internal Auditors") and where necessary, we may, on an adhoc basis, engage third parties to provide certain internal audit services. The Internal Auditors report primarily to the AC Chairman, and administratively to the President and the Chief Financial Officer. The Internal Auditors develop their annual internal audit plan in consultation with, but independent of Management, and submit the plan to our AC for review and approval. Our AC meets with the Internal Auditors at least once a year without the presence of Management to ensure independence of these functions. Based on the work performed by our Internal Auditors, and the review undertaken by external auditors, the AC is of the opinion that we have in place adequate internal controls and nothing has come to the Board's attention to cause the Board to believe that our system of internal controls and risk management is inadequate. (D) Communication with Shareholders Principle 14 : Communication with Shareholders We believe in having regular communication with shareholders and also prompt disclosure of information to shareholders. Our Investor Relations team manages investor relations and has arranged a series of events during the year to brief the media and investment analysts on our performance. For the release of the respective quarterly and year-end results, the announcement is first released via SGXNET together with our press release. Thereafter, the media and investor analysts meet with Management for briefing(s) within the ambit of our SGXNET announcements to ensure that there is fair and non-selective disclosure of information. We support the Code's principle to encourage shareholders' participation. To facilitate greater shareholders' participation, we participate in on-line Management Q&A sessions where we invite questions from the investing public on our publicly disclosed business and financial results. A registered shareholder may appoint a proxy to attend and vote at our general meetings. Hence, our shareholders have the opportunity to direct any queries regarding the resolutions proposed to be passed to our Directors and Management who are present at our general meetings. Our external auditors are also invited to be present at our AGMs to assist our Directors in answering questions from our shareholders relating to the conduct of the audit and the preparation and content of the auditors' report. Financial and other information (including news releases and SGXNET announcements) are made available on our website at http://www.telechoice.com.sg and this is regularly updated. |
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