Sustainability
Corporate Governance
Board meetings are scheduled and held at least once
every quarter. Six Board meetings were held in FY 2014/15.
The Articles of Association of the Manager permit
Board meetings to be held by way of teleconference
and videoconference. Directors meet to discuss and
review the strategies and policies of Starhill Global REIT,
including any significant matters pertaining to acquisitions
and disposals, the annual budget, and the financial
performance of Starhill Global REIT measured against a
previously approved budget. The Board also reviews and
approves the release of Starhill Global REIT’s quarterly
and annual results. The Board will generally review
matters which have an impact on the business risks and
management of liability of Starhill Global REIT, and acts
on comments and recommendations from the auditors of
Starhill Global REIT.
The Board has reviewed environmental sustainability and
work environment initiatives and community outreach
programmes as set out on pages 68, 69 and 70.
In the discharge of its functions, the Board is supported by
an Audit Committee that provides independent oversight
of Management and which also serves to ensure that
there are appropriate checks and balances. The Board has
established a framework for the Management and Starhill
Global REIT, including a system of internal controls and an
enterprise risk management framework. The application of
the policies and protocol under the framework is further
described in the section “Risk Management” on page 66.
The Board has adopted a set of internal controls with
approval limits for capital expenditure, investments and
divestments, bank borrowings and cheque signatories,
amongst others. Apart from matters that specifically
require Board approval, such as the issue of new units,
income distributions and other returns to Unitholders, the
Board approves transactions exceeding certain threshold
limits, while delegating authority for matters below those
limits to Management to facilitate operational efficiency.
Changes to regulations, policies and accounting
standards are monitored closely. Where the changes
have significant impact on Starhill Global REIT and its
obligations of continuing disclosure, the Directors will be
briefed during Board meetings or by circulation of Board
papers. Further, Directors have access to programmes,
courses or seminars organised by the Singapore Institute
of Directors. The Board has reviewed the current training
and professional development programmes in place for
the Directors.
Newly appointed directors are briefed on their roles and
responsibilities as Directors of the Manager, and of the
business activities and strategic directions of Starhill
Global REIT. Upon appointment, a formal letter setting
out the director’s duties, obligations and responsibilities,
together with the Trust Deed and latest annual report will
be given to the director. Appropriate training will also be
provided to first-time directors.
As Lead Independent Director, Mr Keith Tay has the
discretion to hold meetings with the Independent
Directors (without the presence of Management) as he
deems appropriate or necessary. The non-executive
Directors participate in setting and developing strategies
and goals for Management, and reviewing and assessing
Management’s performance. This enables Management
to benefit from their external and objective perspective
of issues that are brought before the Board. It also enables
the Board to interact and work with Management through
a healthy exchange of ideas and views to help shape
the strategic process.
The size of the Board and core competencies of its
members in various fields of accounting, finance, business
management and legal, together with their relevant
industry knowledge and strategic planning experience,
effectively serve Starhill Global REIT and the Manager.
Management is able to benefit from their diverse and
objective perspectives on issues that are brought before
the Board with a healthy exchange of ideas and views
between the Board and Management. The Board is of the
view that its current composition comprises persons who,
as a group, provide the necessary core competencies
and that the current Board size is appropriate, taking
into consideration the nature and scope of Starhill Global
REIT’s operations. When the Board decides to appoint
new directors, it will consider suitable candidates of both
gender. However, the ultimate choice should primarily
be based on merit.
The profiles of the Directors are set out on pages 26
and 27 of this Annual Report.
Chairman and Chief Executive Officer
Principle 3:
There should be a clear division of responsibilities between
the leadership of the Board and the executives responsible
for managing the company’s business. No one individual
should represent a considerable concentration of power.
The positions of Executive Chairman and Chief Executive
Officer (“CEO”) are held by two separate persons in order
to maintain effective segregation of duties. There is a clear
separation of the roles and responsibilities between the
Executive Chairman and the CEO. The Executive Chairman
and the CEO are not related.
The Executive Chairman charts the strategic direction
and growth of Starhill Global REIT in consultation with the
Board, monitors the translation of the Board’s decisions
into executive action and is responsible for the overall
management of Starhill Global REIT’s business and
operations. He also facilitates active Board discussion on
matters concerning the business of Starhill Global REIT,
and ensures that the Board satisfactorily oversees and
evaluates the implementation of Starhill Global REIT’s
strategy, policies, business plans and Board decisions.
In addition, the Executive Chairman ensures that the
Board Composition
Principle 2:
There should be a strong and independent element on
the Board, which is able to exercise objective judgment
on corporate affairs independently, in particular, from
Management and 10% shareholders. No individual or small
group of individuals should be allowed to dominate the
Board’s decision-making.
The Board comprises six members, three of whom
are independent non-executive Directors. As such,
there is a strong and independent element on the
Board. A Director who has no relationship with the
Manager, its shareholders who hold 10% or more of
the voting shares in the Manager, Unitholders who
hold 10% or more of the units in issue of Starhill Global
REIT, its related corporation or its officers that could
interfere, or be reasonably perceived to interfere, with
the exercise of the Director’s independent business
judgment in the best interests of Starhill Global REIT is
considered to be independent. The Board noted that
Dr Hong Hai and Mr Michael Hwang have served on the
Board for more than nine years from the date of their
respective appointments and the Board subjected their
independence to rigorous review. The Board (excluding
the relevant director in question) considered that each
of Dr Hong and Mr Hwang has remained independent
of character and judgment and should continue to
be deemed as independent director. Each of them
has continued to express independent, impartial and
autonomous viewpoints, debate issues objectively,
scrutinise and challenge management on important
issues and sought clarification and amplification when
deemed necessary. As such, the Board decided to
continue to retain the valuable expertise and experience
of these directors.
The composition of the Board as at 30 June 2015 is
as follows:
Tan Sri Dato’ (Dr) Francis Yeoh Sock Ping
Executive Chairman (Non-independent)
Mr Ho Sing
Executive Director & Chief Executive Officer
(Non-independent)
Dato’ Yeoh Seok Kian
Non-executive Director (Non-independent)
Mr Keith Tay Ah Kee
Lead Independent Director (Non-executive) (Independent)
Dr Hong Hai
Non-executive Director (Independent)
Mr Michael Hwang
Non-executive Director (Independent)
members of the Board receive complete, adequate and
timely information, facilitates the effective contribution
of non-executive Directors, encourages constructive
relations within the Board and between the Board and
Management, ensures effective communication with
Unitholders and promotes a high standard of corporate
governance.
The CEO assists the Executive Chairman and the Board
in formulating strategies for Starhill Global REIT and
is responsible for implementing Starhill Global REIT’s
strategies and its day-to-day operations.
Board Membership
Principle 4:
There should be a formal and transparent process for
the appointment and re-appointment of directors to the
Board.
As the Manager is not itself a listed entity, the Manager,
taking into account the activities and scale of the business
of Starhill Global REIT, the limited number of independent
director appointments and the fact that independent
directors constitute half of the Board of the Manager,
does not consider it necessary for the Board to establish a
nominating committee. The Board performs the functions
that such a committee would otherwise perform. Directors
of the Manager are not subject to periodic retirement by
rotation.
The composition of the Board is reviewed regularly to
ensure that it has the appropriate mix of expertise and
experience. The composition of the Board (including the
selection of candidates for new appointments as part of
the Board’s renewal process) is determined in accordance
with the following principles:
1.
The Board should comprise directors with a broad
range of commercial experience including expertise
in fund management and experience in all facets of
the property or real estate industry; and
2. At least half of the Board should comprise
independent directors.
A director with multiple board representation is expected
to ensure sufficient attention is given to the affairs of
the Manager and Starhill Global REIT. The Manager
believes that putting a maximum limit on the number of
directorships a Director can hold is arbitrary, given that time
requirements and complexity for each vary, and thus should
not be prescriptive. A sufficient safeguard is requiring each
Director to confirm his ability to devote sufficient time and
attention to the affairs of the Manager and Starhill Global
REIT, having regard to all his other listed company board
representations and other principal commitments.
Any Director may source for and nominate new Directors
to be appointed by the Board of Directors, through their
extensive networks and contacts. If necessary, the Board
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STARHILL
GLOBAL
REIT
Annual
Report
FY 2014/15
