CORPORATE GOVERNANCE The Boards have adopted a set of internal controls which establishes financial approval limits for capital expenditure, investments, divestments, bank borrowings and issuance of debt instruments and this is clearly communicated to Management in writing. The Boards have reserved authority to approve certain matters including: (a) material acquisitions, investments and divestments; (b) issue of new stapled securities in CLAS (Stapled Securities); (c) income distributions and other returns to Stapled Securityholders; and (d) matters which involve a conflict of interest for a controlling Stapled Securityholder or a Director. Apart from matters that specifically require the Boards’ approval, the Boards delegate authority for transactions below the Boards’ approval limits to Board committees (Board Committees) and Management to optimise operational efficiency. The Directors are fiduciaries and are collectively and individually obliged at all times to act honestly and objectively in the best interests of CLAS. Consistent with this principle, the Boards are committed to ethics and integrity of action and have adopted a Board Code of Business Conduct and Ethics (Board Code) which provides that every Director is expected to, among other things, adhere to the highest standards of ethical conduct. All Directors are required to comply with the Board Code. This sets the appropriate tone from the top in respect of the desired organisational culture, and assists the Boards in ensuring proper accountability within the Managers. In line with this, the Boards have a standing policy that a Director must not allow himself or herself to get into a position where there is a conflict between his or her duty to CLAS and his or her own interests. Where a Director has a conflict of interest in a particular matter, he or she will be required to disclose his or her interest to the Boards, recuse himself or herself from deliberations on the matter and abstain from voting on the matter. Every Director has complied with this policy, and where relevant, such compliance has been duly recorded in the minutes of meeting or written resolutions. Furthermore, the Directors have the responsibility to act with due diligence in the discharge of their duties and ensure that they have the relevant knowledge to carry out and discharge their duties as directors, including understanding their roles as executive, non-executive, and independent directors, the business of CLAS and the environment in which CLAS operates. The Directors are also required to dedicate the necessary effort, commitment and time to their work as directors, and are expected to attend all meetings of the Boards, except if unusual circumstances make attendance impractical. Sustainability The Managers place sustainability at the core of everything we do. We are committed to growing our business in a responsible manner, delivering long-term economic value, and contributing to the environmental and social well-being of the communities in which we have a presence. In keeping with this commitment, sustainability-related considerations are key aspects of the Boards’ strategic formulation. At the board level, in recognition of the importance of sustainability as a business imperative and consistent with the principle that the Boards play an important role in considering and incorporating sustainability considerations as part of its strategy development, an important consideration is ensuring that Environmental, Social and Governance (ESG) risks and opportunities are holistically integrated into and form the Managers’ long-term strategy. This also sets the tone at the top to ensure the alignment of the Managers’ activities with its purpose and stakeholder interests. 96 CAPITALAND ASCOTT TRUST
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