Overview Leadership Portfolio & Performance Sustainability & Governance Financial Statements and Other Information In addition to the above, the NRC and/or the Boards as a whole are kept abreast of relevant matters relating to the review of succession plans relating to the key management personnel, in particular the appointment and/ or replacement of the key management personnel. While this is a deviation from Provision 4.1(a) of the Code which requires the NRC to make recommendations to the Boards on relevant matters relating to the review of succession plans, in particular the appointment and/or replacement of the key management personnel, the Boards are of the view that such matters could be considered either by the NRC or by the Boards as a whole. This is accordingly consistent with the intent of Principle 4 of the Code. In respect of the review of training and professional development programmes for the Boards and the Directors, the Boards are of the view that this should be a matter involving the views and feedback of all members of the Boards. Hence, any Director may contribute by recommending to the Boards specific training and development programmes which he or she believes would benefit Directors or the Boards as a whole. The review of training and professional development programmes for the Boards and their Directors is done by the Boards as a whole, and this function was not delegated to the NRC. This is consistent with the intent of Principle 4 of the Code, notwithstanding that the NRC was not specifically assigned to review and make recommendations to the Boards on such matters. For further information on the training and professional development programmes for the Boards and their Directors, please refer to “Directors’ Development” under Principle 1 in this Report. The NRC’s duties and responsibilities in relation to remuneration matters are set out on page 112 of this Annual Report. Board Composition and Renewal The Boards, through the NRC, strive to ensure that there is an optimal blend in the Boards of backgrounds, experience and knowledge in business and general management, expertise relevant to the Stapled Group’s business and track record, and that each Director can bring to the Boards an independent and objective perspective to enable balanced and well-considered decisions to be made in the interests of the Stapled Group. The Boards comprise members who have experience in the sector that CLAS operates in. The channels used in the search and nomination process for identifying appropriate candidates, and the channels via which the eventual appointee(s) were found, and the criteria used to identify and evaluate potential new directors, are set out below. There is a structured process for determining Board composition and for selecting candidates for appointment as Directors. In undertaking its duty of reviewing and making Boards appointment recommendations to the Boards, the NRC considers different time horizons for purposes of succession planning. The NRC evaluates the Boards’ competencies on a long-term basis and identifies competencies which may be further strengthened in the long term to achieve CLAS’ strategy and objectives. As part of medium-term planning, the NRC seeks to refresh the membership of the Boards progressively and in an orderly manner, whilst ensuring continuity and sustainability of corporate performance. The NRC also considers contingency planning to prepare for sudden and unforeseen changes. In reviewing succession plans, the NRC has in mind CLAS’ strategic priorities and the factors affecting the long-term success of CLAS. Board succession planning takes into account the need to maintain flexibility to effectively address succession planning and to ensure that the Managers continue to attract and retain highly qualified individuals to serve on the Boards. The NRC aims to maintain the optimal composition of the Boards by considering the trends affecting CLAS, reviewing the skills needed and identifying gaps, including considering whether there is an appropriate level of diversity of thought. The process ensures that the Board composition is such that the Boards have capabilities and experience which are aligned with CLAS’ strategy and environment, and includes the following considerations: (a) the current size of the Boards and Board Committees, composition mix and core competencies; (b) the candidate’s/ Director’s independence, in the case of an independent director; (c) the composition requirements for the Boards and relevant Board Committees (if the candidate/Director is proposed to be appointed to any Board Committee); and (d) the candidate’s/Director’s age, gender, track record, experience and capabilities and such other relevant factors as may be determined by the Boards, which would provide an appropriate balance and contribute to the collective skill of the Boards. The Boards support the principle that board renewal is a necessary and continual process, for good governance and ensuring that the Boards have the skills, expertise and experience which are relevant to the evolving needs of CLAS’ business. ANNUAL REPORT 2023 109
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