ST Engineering Annual Report 2020

CORPORATE GOVERNANCE Lim Sim Seng is an executive officer with DBS Bank which ST Engineering group companies has a banking relationship with. The NC determined that the transactions with DBS Bank were at arm's length commercial basis. Mr Lim recused himself from discussions on DBS Bank's dealings with ST Engineering group companies. These dealings would not affect Mr Lim’s independence. Sister of Ng Bee Bee (May) is an Executive Director (Corporate Banking) in United Overseas Bank (UOB) Singapore, but she is not overseeing the banking relationship of ST Engineering group companies with UOB. The NC determined that her sister’s position in UOB would not have any conflict or affect Ms Ng's independence. The Board agrees with the NC’s assessment. Quek Gim Pew, Joseph Leong Weng Keong and LG Ong Su Kiat Melvyn are considered as non executive non independent Directors as they are public sector nominee Directors. Chairman’s Independence Kwa Chong Seng joined the Board on 1 September 2012. He was appointed Chairman on 25 April 2013. Mr Kwa is the retired Chairman and Managing Director of ExxonMobil Asia Pacific Pte Ltd. The NC has reviewed and affirmed that he is an independent Director. Kwa Chong Seng will be attaining his nine years of service on the Company’s board on 1 September 2021. The independence of Mr Kwa has been rigorously reviewed by the NC and the Board. The Company seeks to strike an appropriate balance between length of service, continuity of experience and refreshment of its Board members. The Board believes that the Company will benefit from having Directors on its Board who, over time, have gained valuable insights of the Company, its markets and the industries in which it operates. The NC and the Board (Mr Kwa abstaining in both cases) have determined that Mr Kwa remains objective and independent in Board and Board Committee deliberations. He constructively challenges Management during Board and various Board Committee meetings on which he serves and his extensive experience enables him to provide wise counsel and guidance to facilitate sound decision- making. Mr Kwa's length of service on the Board neither interferes with his exercise of independent judgment nor hinders his ability to act in the best interests of the Company. On this basis, the Board is of the view that Mr Kwa will be able to continue to discharge his duties independently with integrity and competency. The Company has proposed to seek Shareholders’ approval at the 2021 AGM, by way of a two-tier vote pursuant to Rule 210 (5)(d)(iii) of SGX-ST Listing Manual (which will take effect from 1 January 2022), for Kwa Chong Seng to continue to be considered as independent Director with effect from 1 September 2021. If passed, the approval for Mr Kwa to be independent Director will remain in force until the earlier of the retirement or resignation of Mr Kwa or the conclusion of the third AGM following the passing of the resolutions. Chairman and Chief Executive Officer (Principle 3) The Chairman and Group President & CEO roles and responsibilities are kept separate in order to maintain effective oversight. The recommendation in the Code for a lead independent director is not applicable as the Chairman and the Group President & CEO are separate individuals and are not related. No individual or small group of individuals dominates the Board’s decision making process. The Group President & CEO and senior management regularly consult with individual Board members and seek the advice of members of the Board Committees through meetings, telephone calls, as well as by email. The Chairman is responsible for leading the Board and ensuring the effective functioning of the Board to act in the best interests of the Company and its shareholders. The Chairman facilitates the relationship between the Board, Group President & CEO and management, engaging them in open dialogue over various matters including strategic issues, sustainability, risks and business planning processes. He ensures that discussions at the Board level are conducted objectively and professionally where all views are heard and key issues are debated in a fair and open manner. The Chairman also ensures that adequate time is / ST ENG I NEER I NG 108