83 Annual Report 2024 9 While this is a partial deviation from Provision 4.1(a) which requires the NRC to make recommendations to the Board on relevant matters relating to the review of succession plans, in particular the appointment and/or replacement of KMP, the Board is of the view that such matters could be considered either by the NRC or by the Board as a whole given that the NRC and/or the Board as a whole is kept abreast of relevant matters relating to the review of succession plans relating to KMP, in particular the appointment and/or replacement of KMP. This is accordingly consistent with the intent of Principle 4 of the Code. Principle 4: Board Membership The Board has a formal and transparent process for the appointment and re-appointment of Directors, taking into account the need for progressive renewal of the Board. The NRC makes recommendations to the Board on all appointments to the Board and Board Committees. All Board appointments are made based on merit and subject to the Board’s approval. The NRC comprises 3 non-executive Directors, 2 of whom (including the chairman of the NRC) are IDs. The NRC met twice in FY 2024. Under its terms of reference, the NRC’s scope of duties and responsibilities includes the following: (a) review and make recommendations to the Board on the Board size and composition, succession plans for Directors and composition of the Board Committees; (b) review and recommend an objective process and criteria for evaluation of performance of the Board, Board Committees and Directors; (c) consider annually and when required, if a Director is independent; and (d) consider and make recommendations to the Board on the appointment and re-appointment of Directors. Guided by its terms of reference, the NRC oversees the development and succession planning for the CEO. This includes overseeing the process for selection of the CEO and conducting an annual review of career development and succession matters for the CEO9. Board Composition and Renewal The NRC considers different time horizons for purposes of succession planning. The NRC evaluates the Board’s competencies on a long-term basis and identifies competencies which may be further strengthened in the long term to achieve CICT’s strategy and objectives. As part of medium-term planning, the NRC seeks to refresh the membership of the Board 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 CICT’s strategic priorities and the factors affecting the long-term success of CICT. The NRC aims to maintain an optimal board composition by considering the trends affecting CICT, 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 has capabilities and experience which align with CICT’s strategy and the operating environment, and includes the following considerations: (a) the current size of the Board and Board Committees, composition mix and core competencies, (b) the candidate’s/ Director’s independence, in the case of an ID, (c) the composition requirements for the Board 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 Board, which would provide an appropriate balance and contribute to the collective skills of the Board. The Board supports continuous renewal for good governance, and has guidelines which provide for IDs’ tenure of no more than a maximum of two 3-year terms, with any extension of tenure beyond 6 years to be reviewed on a yearly basis up to a period of 9 years (inclusive of the initial two 3-year terms served) by the NRC. Board succession planning is part of the NRC’s annual review of the Board's composition as well as when a Director gives notice of his/her intention to retire or resign. The annual review takes into account, among others, the requirements in the Listing Manual and the Code, feedback from any Board member and the diversity targets and factors in the Board Diversity Policy. The outcome is reported to the Board. The Board strives for orderly succession and continually looks to fill future gaps in competencies and to renew the Board in a progressive manner, whilst ensuring continuity and sustainability of corporate performance. Searches for possible candidates are conducted through contacts and recommendations. External consultants may be retained to ensure a diverse slate of candidates. Candidates are identified based on CICT’s needs, taking into account skills required and the requirements in the Listing Manual and the Code, and assessed against a range of criteria including their demonstrated business sense and judgement, skills and expertise, and market and industry knowledge (and may include financial, sustainability or other competency, geographical representation and business background) with due consideration to diversity factors in the Board Diversity Policy. The NRC also considers the candidate’s alignment with CICT’s strategic directions and values, ability to commit time and potential to complement the expertise and experience of existing Board members, as well as any qualitative feedback from Directors and Management from its annual Board evaluation exercise. The NRC uses a skills matrix to determine the skills gaps of the Board and if the expertise and experience of a candidate would complement those of the existing Board members.
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