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CORPORATE
GOVERNANCE
No share/unit option schemes or
share/unit schemes have been
implemented. The Manager
ensures that performance-related
remuneration is aligned with the
interests of the Unitholders and will
promote the long-term success of the
Manager. The Board has reviewed the
remuneration components above and
is satisfied that there is reasonable
mitigation of any potential
misalignment of interests, taking into
account (i) the Board’s discretion
(including the requirement for
approval by not less than a majority of
Independent Directors) to determine
whether the remuneration payable is
in line with the remuneration policy;
(ii) the substantial emphasis placed
on the performance of Starhill Global
REIT; and (iii) the absence of any
remuneration payment in the form or
shares or interest in the controlling
unitholder of Starhill Global REIT or its
related entities.
The Manager is cognisant of the
requirement to disclose (i) the
remuneration of the CEO and each
individual Director on a named basis,
(ii) the remuneration of at least the
top five executive officers (who shall
not include the CEO and Directors),
on a named basis, in bands of
S$250,000 and (iii) the aggregate
total remuneration paid to the top
five executive officers. The Board
has assessed and decided against
the disclosure of the remuneration
of the CEO and executive officers
on a named basis, whether in
exact quantum or in bands of
S$250,000 and of the aggregate
total remuneration paid to the top
five executive officers because it is
not in the Manager’s best interest
to do so, taking into account, inter
alia, the commercial sensitivity and
confidential nature of remuneration
matters, the presence of highly
competitive conditions for talent
in the industry, which is relatively
small, the importance of ensuring
stability and continuity of business
operations of Starhill Global REIT
with a competent and experienced
management team in place and
the negative impact which such
disclosure may have on the Manager
in attracting and retaining talent
on a long-term basis. The non-
disclosure will not be prejudicial
to the interests of Unitholders as
sufficient information is provided on
the Manager’s remuneration policy to
enable Unitholders to understand the
link between the remuneration paid
to the CEO and executive officers
and performance.
There were no employees of the
Manager who were immediate
family members of a Director or
the CEO and whose remuneration
exceeds S$50,000 during FY 2016/17.
“Immediate family member” refers to
the spouse, child, adopted child,
step-child, sibling or parent of
the individual.
(C) ACCOUNTABILITY AND AUDIT
Accountability
Principle 10:
The Board should present a balanced
and understandable assessment of
the company’s performance, position
and prospects.
The Manager provides Unitholders
with quarterly and annual financial
statements. The Board, with the
support of Management, is responsible
for providing a balanced and informed
assessment of Starhill Global REIT’s
performance, position and prospects,
including interim and other price-
sensitive public reports, and reports to
regulators (if required). Management
provides the Board with management
accounts on a quarterly basis and as
the Board may require from time to
time to enable the Board to make a
balanced and informed assessment.
Financial reports and other material
information are disseminated to
Unitholders through announcements
to SGX-ST via SGXNET, Starhill Global
REIT’s website and where applicable,
press releases, of the performance,
position and prospects of Starhill
Global REIT.
Risk Management and Internal
Controls
Principle 11:
The Board is responsible for the
governance of risk. The Board
should ensure that the Management
maintains a sound system of risk
management and internal controls
to safeguard shareholders’ interests
and the company’s assets, and should
determine the nature and extent of
the significant risks which the Board
is willing to take in achieving its
strategic objectives.
Effective risk management is a
fundamental part of Starhill Global
REIT’s business strategy. Recognising
and managing risk is central to
the business and to protecting
Unitholders’ interests and value. The
Manager has in place an enterprise
risk management (“ERM”) framework
and policies, which have been
approved by the Board that provide
a structured approach to identifying
and managing the material risks
that could arise in the course of
managing Starhill Global REIT. The
ERM framework and policies are
monitored and reviewed by the
Board as and when appropriate, and
major developments and significant
revisions to the ERM framework or
policies will be submitted to the
Board for approval. An independent
consultant also reviews the ERM
framework and the identified risks
and control activities, and provides
a report to the Board once every
two years. Material risks at both the
Manager and Starhill Global REIT
levels are managed through this
ERM framework.
The Audit Committee has also
been tasked by the Board to
include risk management within
its oversight role. This includes the
review of material risks identified by
Management with respect to the
business operations of the Manager,
Starhill Global REIT and the assets of
Starhill Global REIT.
Application of the policies and
protocol under the ERM framework in
respect of Starhill Global REIT assets
and operations is further described
in the section “Risk Management”
on page 58.
The Manager has put in place
a system of internal controls,
compliance procedures and
processes to safeguard Starhill
Global REIT’s assets and Unitholders’
interests, manage risks and ensure
compliance with high standards of
corporate governance. Financial
risk management is exercised in
accordance with a robust policy.
During FY 2016/17, the Audit
Committee and the Board, with
the assistance of the internal and
external auditors, has reviewed the
adequacy and effectiveness of
Starhill Global REIT’s system of risk
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STARHILL GLOBAL REIT ANNUAL REPORT FY 2016/17