65
ANNUAL REPORT 2014
CORPORATE GOVERNANCE
Principle 2: Board Composition and Guidance
Board Independence
The Boards of the H-REIT Manager and the HBT Trustee-Manager currently consist of
seven members each. All members of the Boards, except for the Chief Executive Officer,
are non-executive Directors (“NEDs”). Of the six NEDs, four of them, being more than half of
the Boards, are independent
(1)
directors, thus providing for a strong and independent element
on the Boards capable of exercising objective judgement on corporate affairs of the H-REIT
Group and the HBT Group. No individual or small group of individuals dominates the Boards’
decision-making. For purposes of determination of independence, the independent directors
provided declarations regarding their independence.
The independent NEDs are Ms Jenny Lim, Mr Jimmy Chan, Mr Daniel Desbaillets and
Mr Ronald Seah.
The independence of the Board members is assessed in accordance with Guideline 2.3 of the
2012 Code and the Business Trusts Regulations 2005.
H-REIT Manager / HBT Trustee-Manager Board Composition and Size
The composition of the H-REIT Manager Board and the HBT Trustee-Manager Board is
determined using the following principles:
• The Chairman of the H-REIT Manager Board and the HBT Trustee-Manager Board should
be a non-executive Director of the H-REIT Manager and the HBT Trustee-Manager;
•
The H-REIT Manager Board and the HBT Trustee-Manager Board should comprise
Directors with a broad range of commercial experience including expertise in funds
management and the hospitality and real estate industries; and
•
While H-REIT Units remain stapled to HBT Units, in order to avoid any conflict between
H-REIT and HBT and to act in the best interest of CDLHT (a stapled group comprising
the H-REIT Group and the HBT Group) (the “Stapled Group”), each of the Directors of
the H-REIT Manager Board is also a Director of the HBT Trustee-Manager Board, and
vice versa. Accordingly, in order for the HBT Trustee-Manager Board to comply with
the requirement under Regulation 12 of the Business Trust Regulations 2005 for at least
a majority of the Directors of the board of the trustee-manager of a business trust to
comprise Directors who are independent from management and business relationships
with the trustee-manager, at least a majority of the Directors of both the H-REIT Manager
Board and the HBT Trustee-Manager Board will comprise such independent Directors.
The H-REIT Manager Board and the HBT Trustee-Manager Board have also considered the core
competencies of the Boards based on the skills and experience of each Director, and are of the
view that the Boards have the critical skills and expertise needed in the strategic direction and
planning of the business of H-REIT and HBT. The current composition of the Boards comprises
directors who have experience in real estate and hotel related businesses, the food and beverage
industry, business management, strategic planning, investment analysis, corporate finance,
investment portfolio management, audit and taxation, corporate reorganizations and mergers
and acquisitions. There is also gender diversity on the Boards. In April 2014, Mr Ronald Issen was
brought onto the Boards to further complement the Boards’ skills, with his extensive experience
in advisory and consultancy services, including the identification and evaluation of potential
investments and strategic partnerships. Further information on the Directors’ background,
experience and skills can be found on the “Board of Directors” section in the Annual Report.
1
The independence of the Directors in this context refers to their independence from management and business
relationships with the H-REIT Manager and the HBT Trustee-Manager and their independence from every substantial
shareholder of the HBT Trustee-Manager, except to the extent that the Directors of the H-REIT Manager are the same
as the Directors of the HBT Trustee-Manager.
Guideline 2.4
Has any independent
director served on the
Board for more than nine
years from the date of his
first appointment? If so,
please identify the director
and set out the Board’s
reasons for considering
him independent.
None as at the date of
this Annual Report.
Guideline 2.6
(a) What is the Board’s
policy with regard to
diversity in identifying
director nominees?
Please refer to the first
paragraph of the section
under the heading
“H-REIT Manager/ HBT
Trustee-Manager Board
Composition and Size”.
Guideline 2.6
(b) Please state whether
the current composition
of the Board provides
diversity on each of
the following – skills,
experience, gender
and knowledge of the
Company, and elaborate
with numerical data where
appropriate.
Please refer to the
second and third
paragraphs of the section
under the heading
“H-REIT Manager/ HBT
Trustee-Manager Board
Composition and Size”.
