Corporate Governance Policy
The Company profoundly recognized that Corporate Governance (CG) is a key driver to the business efficiency and the sustainable growth, which ultimately lead to the maximum returns for all stakeholders including employees, investors, shareholders and other interested persons. The Board of Directors (BOD) thus agreed to establish the policy of Good Corporate Governance, covering major substances including the structure, roles and responsibilities of the BOD, as well as the executives’ managing principles that must be transparent, clear, and measurable. This is to ensure that all of the Company’s business maneuvers are done with fairness and on the ground of the maximum benefits of the Company’s shareholders and stakeholders. In addition, the BOD has established the Code of Conduct to all directors, executives and employees which serve as guidelines for performing their duties in accordance with ethical standard and fair treatment to all stakeholders.
The BOD and the Company’s management team strongly adhere to determination and uprightness. The Company determines its vision, policies, and guidelines to be abided by all of its directors, executives, and employees to create the culture of continual CG mindset and build sustainable grounds for value creation for all stakeholders. This is an important engine to accomplish the goals set by the BOD, who designed the Company’s structure to be transparent and facilitative to justifiable business conducts according to the CG framework under the rules set forth by the Stock Exchange of Thailand (SET).
CORPORATE GOVERNANCE POLICY
The Company’s BOD places high importance on stringent conforming to the CG principle. Recognizing the importance of the roles and responsibilities of the BOD and the management team in building a good CG environment that will strengthen the Company’s competitiveness, fortify effective and transparent management, and increase the level of trust from shareholders, investors, and other stakeholders, PACE established its CG policy, covering 5 main principles as the followings:
The Company respects shareholders’ rights to make decisions pertaining to the Company’s major changes and the rights to receive correct, complete, sufficient, and timely information evenly. Consequently, the Company has performed as the following:
- Shareholders’ Rights Protection
- 1.1 The Company emphasize the protection of shareholders’ rights and the promotion of exercising the basic legal rights i.e. the rights to obtain the relevant and adequate information of the Company, to participate and vote in the shareholders’ meeting, to elect and remove members of the board, appoint the external auditor, and make decisions on any transactions that affect the Company such as the amendment to the Company’s articles of association and memorandum of association, the capital decrease or increase etc.
- 1.2 The Company recognizes the importance of shareholders’ rights by facilitating shareholders more than legal requirement i.e. providing the current important information via the Company’s website and providing Management Discussion and Analysis (MD&A) on a quarterly basis.
- 1.3 The shareholding structure of the Company comprises of numerous minority shareholders to balance with the majority shareholders, not contributing to any person or group to control vote or control of the Company, while enhancing the good corporate governance to shareholders. Currently, the Company has free float at 47.57%, no cross shareholding, and no pyramid structure.
- The Shareholders’ Meeting
- 2.1 The Company held the Shareholders’ Meeting once a year within 4 months after the end of the accounting period. In 2017, the meeting was held on 26 April 2017, where Chairman of the Board of Directors, Chairman of Audit Committee, Chairman of Nomination and Remuneration Committee, Chairman of Risk Management Committee, Directors, Chief Executive Officer, Management, External Auditor, and Legal Advisor attended the meeting to respond questions.
- 2.2 The Company has provided Legal Advisor of Weerawong, Chinnavat & Partners Limited and shareholders’ volunteers checking the vote counting in the shareholders’ meeting, which was disclosed in the minutes of shareholders’ meeting.
- Delivering the Meeting Invitation Letter
- 3.1 The Company assigned Thailand Securities Depository Company Limited, the Company’s share registrar, to send the meeting invitation letter to shareholders 14 days in advance, while posted such information, which is the same information as sent to shareholders, in www.pacedev.com, the Company’s website to allow shareholders sufficient time to study such information in advance. The Company also advertised the meeting invitation in daily newspapers for 3 consecutive days and 3 days in advance before the meeting in order to inform such shareholder meeting.
- 3.2 The meeting invitation provide sufficient and complete information, including date, time, place, agenda with details whether each agenda is for acknowledgement or consideration, enclosures of each agenda, purpose and reason, the directors’ opinion, articles of association relating to the meeting, map, document or evidences required to be presented on the meeting date, and meeting attendance procedure. The Company has also provided meeting invitation letter in English to facilitate foreign shareholders.
- 3.3 The Company recognizes the importance of shareholders’ rights, encourages shareholders to exercise their rights, and does not infringe or curtail shareholders’ rights. At the shareholders’ meeting, the Company provides significant issues for shareholders consideration and includes important items as required by laws, SET’s regulations and the Company’s regulations.
- 3.4 In the meeting invitation, agendas are clearly categorized for shareholders’ consideration and approval. Details included in the invitation are:
- Director Appointment : The Company allows shareholders to appoint individual director by providing information about name, age, educational background, work experience, number of listed and non-listed companies served as director, nomination criteria and method, types of director that is proposed for appointment and meeting attendance in case of proposing previous director, which is screened by the Nomination and Remuneration Committee.
- Director Remuneration : The Company provides details ofproposed the director remuneration policy and conditions, which is screened by the Nomination and Remuneration Committee.
- Appointment of External Auditors : The Company providesdetails of external auditor’s name and company, audit fee, consideration method of audit fee appropriateness, which is screened by the Audit Committee.
- Allocating Profit and Dividend Payment : The Company provides details of profit allocation and reserve fund, no dividend payment together with the reason in accordance with law, regulation and dividend policy.
- Facilitating Shareholders
- 4.1 The Company’s policy is to facilitate and encourage institutional investors, major and individual shareholder to attend the meeting.
- 4.2 The Company held the shareholders’ meeting at W Hotel, Bangkok, the convenient place which is easily accessible by shareholders. The Company also facilitated all shareholders in a fair manner by providing adequate officers to take care of them.
- 4.3 The Company allows registration of shareholders two hour before the meeting, does not limit the rights of shareholders who come late, and facilitates shareholders to fully use their meeting rights.
- 4.4 The Company uses a barcode system detailing each shareholder’s information as printed on the registration form. This is to facilitate fast and accurate registration, vote counting and display.
- 4.5 The Company gives shareholders who show up late a chance to vote on agenda items still under deliberation.
- Conduct of the Shareholders’ Meeting
- 5.1 At the beginning of the meeting, the Company introduces the Board of Directors, Chairman of each sub-committee, management, external auditor, and legal advisor attending the meeting and informs shareholders of the meeting rules and voting procedure, as well as the voting right.
- 5.2 The Company provides enough time for the meeting, encourages equal opportunities for shareholders to express their opinions and raise any questions in the meeting, where directors and management address and answer all questions clearly and precisely.
- 5.3 The Company conducts the shareholders’ meeting in sequence detailed in the agenda as informed in the meeting invitation letter. There was no additional important material or information or agenda other than that printed in the meeting invitation added during the shareholders’ meeting.
- 5.4 The Company provides separate voting card for each agenda for transparency and further investigation in case of argument afterwards, and in case that an agenda includes various topics, such as director appointment, the Company opens the opportunity for the shareholders to separately appoint individual director.
- After the Shareholders’ Meeting
- 6.1 The Company disclosed the resolutions of the meeting, together with the votes of each agenda, via SET and will announce on the Company’s website within 9.00 AM of the day after the shareholders’ meeting date.
- 6.2 The minutes of meeting was correct, complete and could be verified by shareholders. The minutes covered the name and position of directors who attended the meeting, voting method and counting, shareholders’ opinions, the director’s clarification and clear resolution, classifying into agree, disagree or abstain votes. The minutes was sent to the SET within 14 days after each meeting as well as posted on the Company’s website.
The Company requires that all shareholders be treated fairly and equally. Consequently, the BOD set up the following policies:
- Facilitate minority shareholders to nominate directors and suggest additional agenda before the commencement of the shareholder meeting.
- Determine a clear rule in advance as to whether and how to add additional agenda suggested by minority shareholders into the existing agenda, and as to how minority shareholders can nominate candidates for the Company’s directors.
The Company provides channel for shareholders to propose agenda item and nominate person for election as a director for the 2018 Annual General Meeting of Shareholders, which is disclosed via the SET and the Company’s website. One or several shareholders, holding not less than 1% of total shares can propose meeting agenda and director nominee, for 3 months, from 1 October - 31 December of each year. This proportion facilitates the shareholders more than specified by the law, which specifies that one or several shareholders, holding minimum share in the amount of 5% can propose meeting agenda.
- Include only the agenda determined in advance without changing major information or adding new untold agenda unnecessarily, especially in the meeting with agenda that require extensive time to study and thorough understandings from shareholders.
- Facilitate shareholders unable to attend the meeting by allowing such shareholders to grant the authority to attend and vote in the meeting to at least one of the independent directors or any individual of choice. The names of the selected independent directors must be informed in the meeting invitation letter.
- Treat every shareholder fairly and equally, regardless of being majority or minority shareholders, Thai or foreign shareholders.
- Encourage the use of voting cards in every agenda to prove transparency and measurability in the voting process, in case of a later dispute. In the director nomination agenda, the Company grants each shareholder the right to nominate directors person by person.
- Establish a written guideline to maintain internal information and prevent misuse of such information and communicate the guideline to all entities in the organization. The Company also requires that all directors and executives report their securities holding and submit the report to the Company’s BOD.
The Company truly recognizes and respects the rights of internal stakeholders, such as shareholders and employees, and external stakeholders, such as customers, trading partners, competitors, governmental entities, and other entities including surrounding communities, as they are important contributors to the Company’s competitiveness and profitability, the main drivers of PACE’s long-term value creation. The Company, therefore, set up the following policies:
- Proper Conducts and Responsibilities towards Shareholders
PACE realizes that shareholders are the true owners of the Company and wholeheartedly accepts fiduciary duty to create long-term value to its shareholders. It therefore requires that its employees adhere to the following guidelines:
- Behave in an honest, upright manner and always base one’s decision on thorough considerations and fairness to every shareholder in order to maximize overall shareholders’ value.
- Monitor and control the operation to ensure that the Company’s financial status and performance are well maintained, and regularly report the Company’s business status, performance, financial status, accounting information and other information in a true, unbiased manner.
- Report the Company’s positive and negative trends, based on probabilities, solid evidence and backup reasoning, to every shareholder in an equal, unprejudiced fashion.
- Refrain from exploiting the Company’s undisclosed information to one’s or other’s personal benefits and abstain from any other actions that may result in conflicts of interest with the organization.
- The Company must treat all shareholders equally in the shareholders’ meeting.
- Proper Conducts and Responsibilities towards Governmental Entities
The Company highly values compliance with laws, rules, and regulations set forth by the regulating bodies, especially when transacting with governmental entities. In such exposures, it will avoid maneuver that may lead to misuses of authorities and misconducts. The Company, instead, tries to build relationships with the governmental bodies in a lawful way, such as normal greetings in public venues and paying visits in normal traditions. Guidelines for dealing with governmental bodies are as follows:
- Properly and carefully conduct oneself when contacting with governmental bodies or persons.
- Always realize that the laws, rules, and regulations set by different governmental entities may require different procedures, which the Company must know by heart and follow accordingly.
- Proper Conducts and Responsibilities towards Employees
The Company realizes that all employees are the most valuable assets and the key drivers for the organization’s achievement. It thus determined the policy to ensure fair treatment in employment opportunity, compensation, nomination, job rotation, and skill development as the followings:
- Treat all employees with respects in their honors, dignities, and individual rights.
- Always maintain a working environment that is safe for the lives and properties of employees.
- Nomination, rotation, awards giving, and penalty giving must be done with genuine intention, taking into account such employee’s knowledge and appropriateness.
- Support the development of knowledge and skills of employees by constantly engaging them in learning opportunities, such as seminars, trainings, and workshops, which are equally accessible to all employees.
- Set fair remuneration rates consistent with the market condition, business competition, job type, performance, and the Company’s ability to pay.
- Avoid any unfair treatment that may negatively affect employees’ job security.
- Create opportunities for employees to give comments or file complaints in the subjects related to their professions and to suggest possible recommendations that will benefit all parties involved and create relationships and good working environment.
- Proper Conducts and Responsibilities towards Customers
The Company is determined to stay in real estate development business with the main purposes to create, present, and administer its products and services in the quality-focused, ethical principles as shown below:
- Be determined to procure and develop products and services to best serve the need of the clients.
- Deliver quality products and services with fair terms and conditions.
- Provide precise and sufficient information related to products and services that customers can utilize in their decision making process without exaggerating thequalifications, quality, quantity, or any conditions of the products and services in the Company’s advertisement or in other communicating channels.
- Arrange to have communicating mechanism for customer complaints in place should there be any problems related to the Company’s products or services so that the Company can immediately resolve such problem and utilize the information to improve the quality of its products and services.
- Maintain customers’ confidential information and abstain from revealing or misuse of such information.
- Proper Conducts and Responsibilities towards Trading Partners and Counterparties
Realizing that trading partners and other counterparties are quintessential to the success of the Company, PACE has a strong policy to treat its trading partners and counterparties fairly and equally, placing mutual benefits before its own benefits. Guidelines for treatment of trading partners and counterparties are as follows:
- The Company will arrange to procure products and services efficiently by applying the following principles:
- Competition on equivalent information
- Clear rules on trading partners and counterparty selection and assessment
- Have proper agreements that are fair to both sides
- Put in place management and tracking system to ensure that the conditions in the agreement are followed through completely and accurately to prevent fraud and corruption in every step of the procurement process
- Make payment to trading partners and counterparties in a timely manner according to the agreed payment terms
- The Company is strongly resolute to develop and preserve sustainable relationship with its trading partners and counterparties that are reliable and determined to provide quality products and services worth of the Company’s cost.
- All executives and employees must abstain from taking personal benefits from trading partners and counterparties directly or indirectly in any circumstance.
- All executives and employees must abstain from abusing information on procurement or purchasing for personal gains of oneself or of others.
- The Company will arrange to procure products and services efficiently by applying the following principles:
- Proper Conducts and Responsibilities towards Lenders
The Company is determined to conduct its business based on solid principles and strict disciplines to create trust for lenders. In so doing it follows these rules:
- Rigorously follows the terms and conditions defined in the contracts or agreements.
- If the Company, in any circumstances, cannot satisfy the said terms and conditions, it will promptly inform relevant lenders in advance to seek for mutually agreed resolutions.
- Proper Conducts and Responsibilities towards Competitors
The Company is determined to be sustainably successful and to stand to be a leading real estate developer that competes fairly and ethically by following these principles:
- Conduct oneself according to a fair competition framework.
- Abstain from acquiring competitors’ confidential information wrongfully or inappropriately and abusing such information for the Company’s sake.
- Refrain from making false allegations or false statements that may destroy the reputation of the competitors.
- Abstain from engaging in activities that violate intellectual property rights of the Company’s competitors or other entities.
- Proper Conducts and Responsibilities towards Society
RRecognizing its role in the sustainable development of the society and environment, the Company has been active in arranging several altruistic activities in its surrounding communities applying the following principles on responsibilities towards communities and environment:
- Put in place a policy to responsibly conduct business, taking into account environmental concerns, and strictly adhere to the laws and regulations on environment conservation currently in use.
- Have a clear set of CSR policies and enforce such policies in the organization.
- Encourage the Company’s employees to be aware of and responsible for environment and society.
- Pay respects to local traditions, customs, and cultures in which the Company operates.
- Constantly engaging in activities that improve the living conditions of the surrounding communities, society, and environment held both by the Company itself and through collaboration with other governmental, local, or private entities.
- Suitably participate in the activities held by communities surrounding the project sites.
- Respond promptly and efficiently to the incidences that may affect the environment, communities, lives, and properties of others due to the business conducts of the Company, and unduly cooperate with governmental agents or other relevant parties to resolve such incidences.
In addition, the Company’s interested persons can make inquiries, give comments, file complaints, or give information on illegal actions, financial statement inaccuracy, flawed internal control, and unethical actions to the Company’s independent directors or members of the Audit Committee. The information will be classified and protected. Independent directors and members of the Audit Committee will arrange to have the information investigated and find solutions (if any) and report to the Boards of Directors.
- The BOD has a policy to disclose financial information and other information pertaining to the business and the performance of the Company in a precise, complete, sufficient, regular, and timely manner to represent the true financial status, current performance, and the future trend of the Company’s business.
- The BOD is determined to ensure that the Company complies with laws, rules, and regulations regarding information disclosure and transparency. It arranges to have such information presented both in Thai and English versions on the Company’s websites, public communication channels, and SET’s communication channel to provide to its shareholders and other stakeholders a convenient access to the Company’s information. It will also adjust itscommunication means to comply with guidelines set forth and enforced by the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC).
- The Company will arrange to have staff in Investor Relations Department to be responsible for communicating with shareholders, institute investors, and retail investors, and to set up regular analyst meetings, as well as to distribute financial and general information to the Company’s shareholders, analysts, rating agencies, and other governmental entities through several channels, such as reports submitted to the SET and the SEC and on PACE’s website. In addition, the Company regularly discloses its information in both Thai and English versions through the Company’s website to provide its shareholder a convenient access to updated company’s information. The information posted on the website, including the Company’s visions, missions, financial reports, news, annual reports, organization structures and executives, shareholder structure, and major shareholders will be regularly updated to reflect the most current status of the Company.
- The Company places high emphasis on its financial reports and make sure that they reflect the true financial status and performance of the Company based upon correct, complete, and sufficient data according to the generally accepted accounting standards.
- The Company will disclose the information regarding each director, roles and responsibilities of the Board of Directors and sub-committees, the number of meeting held and the number of meeting attended by each directors in the past year in its annual report (Form 56-2) and annual registration statement (Form 56-1).
The BOD owes its fiduciary duty to the Company’s shareholders to ensure that the Company complies with the governing laws, company’s objectives, company’s articles of association, and resolutions of shareholders’ meetings.
- Structure of the Board of Directors
- 1.1 The Company’s BOD consists of 9 members, each serving a 3-year term in position. Three of the members are executive directors. The other 6 members are nonexecutive directors, four of whom are independent directors. This structure is satisfied with the rules set forth by the SEC requiring that all listed companies must have the ratio of 1 independent director per 3 directors. All directors are knowledgeable in Engineering, Accounting and Finance.
- 1.2 The Company appointed Company Secretary to provide opinions and suggestions on legal points and regulations that the BOD must acknowledge, to support the activities of the BOD, and to coordinate with various entities in the execution of the BOD’s resolution.
- 2.1 The Company has 4 sub-committees, namely Audit Committee, Executive Committee, Nomination and Remuneration Committee, and Risk Management Committee. These sub-committees are set up to conform to the principle of good corporate governance and to provide assistance to the BOD.
- 2.2 Chairman of Audit Committee, Chairman of Nomination and Remuneration Committee, and Chairman of Risk Management Committee are all independent directors. This is to ensure independence and transparency in their job function.
- Roles, Duties, and Responsibilities of the Board and Committees
The roles, duties, and responsibilities of the BOD and sub-committees will be covered in topic 2.
- Meeting of the Board of Directors
- 4.1 The BOD determines at least 1 meeting per 1 quarter inadvance, is scheduled in advance throughout the year and will arrange to have special meetings based on necessity and appropriateness on the case-by-case basis. In case of special meetings, the Company must inform the attendants at least 7 days prior to the meeting date. The meeting’s constituted quorum is achieved when at least half of the directors attend the meeting.
- 4.2 The meeting agenda are clearly determined in advance by Chairman of the BOD and Chief Executive Officer (CEO). Company Secretary is responsible for ensuring that all thedirectors receive supporting document in a sufficient time period prior to the meeting to allow all attendants to study the agenda and make informed voting decision.
- 4.3 The BOD must receive sufficient, complete, and timely information before the commencement of every meeting. Directors can contact Company Secretary directly and freely to request recommendations pertaining to legal and regulation issues.
- 4.4 Chairman of the BOD is responsible for managing the meeting time properly to allow adequate time for management to present the information and sufficient time for the Board to discuss important agenda and give opinion on each agenda before summarizing the Meeting’s resolution.
- 4.5 The BOD has a policy to allow non-executive directors to have a separated session to discuss management related issues of interest without the presence of management. The result of such meeting is to be informed to the CEO.
- 4.6 The BOD supports the decision of the CEO to invite high-level executives to the meeting of the BOD to give additional information to the Meeting as directly operative agents. This also gives the directors an opportunity to know high-level executives to be considered in the Company’s succession plan.
- 4.7 During the consideration and the voting of every agenda, the directors who have conflicts of interest in such agenda must leave the meeting and refrain from voting.
- 4.8 Written meeting minutes are required in all of the meeting of the BOD. The minutes must be approved by the BOD and be maintained in a form that is ready to be reviewed by directors and/or other relevant parties.
- Directors’ Self-Assessment
Despite the fact that the Board of Directors and each committee have completely performed their responsibility, they arranged for self-assessment of the Board of Directors and Nomination and Remuneration Committee, in order to continually improve operational effectiveness. The self-assessment covers assessment for the entire Board of Directors and individual director. Audit Committee and Risk Management Committee are subjected to assessments for the entire committee. The performance assessment of the Board of Directors and each committee has the same rating criteria, and is consistent with the example of self-assessment of the board, provided by the SET. Furthermore, the assessment has been reviewed regularly to ensure its appropriateness.
The Company has in place an assessment procedure. The Company Secretary and the secretary of each committee sent the assessment form to the directors. After filling in the assessment form, the directors would send it back to the Company. To provide an independent evaluation, the name of the director would be concealed. The assessment result was proposed in the meetings of the Board of Directors and each committee for discussion and sought for the performance improvement.
The Board’s entire assessment consists of 6 main items i.e.
- 1. Director’s structure and qualifications
- 2. Roles, duties, and responsibilities of director
- 3. Director’s Meeting
- 4. Director’s Act
- 5. Relationship with management
- 6. Training and other information
- 1. Director’s structure and qualifications
- 2. Director’s Meeting
- 3. Roles, duties, and responsibilities of director
The Company’s BOD delegates the authority to recommend remuneration protocols to the Nomination and Remuneration Committee. Such protocols are to be approved in the shareholders’ meeting and will be embodied in a remuneration policy. Such remuneration protocols are based on the following criteria:
- 6.1 The Company’s performance and the size of the business, by comparing with remuneration of directors in other listed companies of the same nature and size
- 6.2 Experiences, roles, duties and responsibilities of each director
- 6.3 Expected value contribution from each director
- 6.4 Remuneration rate should be sufficient to attract qualified candidates to join the Company as directors or executives
- 6.5 Responsibilities of each director
- Directors and Executives Development and Training Programs
The BOD has a policy to support and facilitate trainings for directors engaging in the Company’s corporate governance process, such as directors, members of the Audit Committee, and high-level executives, to continually improve the Company’s CG procedures. In the case of changing directors or appointing new directors, the Company’s management will prepare document containing useful information for the work of the new directors and also arrange to have a session in which the Company’s business nature and its operations are introduced to the new directors.
As of present, all directors have passed director training programs from Thai Institute of Directors (IOD). Some of them have passed Director Accreditation Program (DAP) and Director Certification Program (DCP) offered by the same institution.
- Conflicts of interest
The BOD has determined the guidelines to handle conflicts of interest satisfied with the ones provided by the SET and Securities and Exchange Act for the ultimate benefit of the Company. It is the duty of personnel in every level to resolve the situations at risk of conflicts of interest with a careful, upright, and independent mindset based on a well-laid ethical framework, and to transparently disclose necessary information with the Company’s interest at heart.