Corporate Governance Policy
Since good governance frames the business of CPN, which is committed to morality, ethics, and due regard for the balanced interests among stakeholders, which would pave the way for long-term stability and growth in tandem with a healthy society and environment, the Board has defined CPN Corporate Governance Policy through the five following categories:
Category 1: Rights of shareholders
- Rights of shareholders
- Rights of ownership registration
- Rights of share transfer
- Rights to regularly and sufficiently receive the company's important and material information
- Rights to attend and vote in the company's shareholders meeting
- Rights to elect or remove board members
- Rights to consider remunerations of board members
- Rights to the share of the company's profits
- Rights to join decision-making and receive the results of the company's decisions on the company's fundamental changes, such as
- Sale or transfer of the company's business, whether in whole or in important parts, to other people
- Purchase or acceptance of transfer of other companies or other private entities
- Execution, amendment, or cancellation of contracts of the company's leasing whether in whole or in important parts, the assignment of other person(s) to manage the company's business or the acquisition of other company with the objective of profit and loss sharing
- Amendment of the company's memorandum of association, rules, and other similar regulations
- Increase or decrease of capital
- Company acquisitions or dissolutions
- Issuance of debentures
- Extraordinary transactions.
- Shareholders’ meeting
Shareholders have full opportunities to attend the meeting and cast their votes at the meetings. CPN encourages all shareholders—major, minor, foreign, or institutional investors—to attend these. CPN will also in no way deprive their access to its public information, including blocking of communication among shareholders or the participation in the shareholders' meeting. CPN will perform duties relevant to the shareholders' meeting as follows:
Prior to the shareholders’ meeting
- Minor shareholders can propose agenda items for consideration at the shareholders' meeting and nominate qualified people for election as directors ahead of the meeting as stipulated by CPN.
- CPN sends meeting invitations in both Thai and English to the shareholders, containing complete and clear agenda details.
- CPN posts meeting invitations, containing agenda details, at least 30 days ahead of the meeting on www.cpn.co.th and via the Stock Exchange of Thailand's news channels.
- CPN sends meeting invitations with agenda details to the shareholders at least 21 days ahead of the meeting so that they may have enough time to study the details before voting on each agenda item.
- Shareholders can send queries about agenda items at the shareholders' meeting ahead of the meeting by email to the Company Secretary: firstname.lastname@example.org or by mail to the following address:
||The Company Secretary
Central Pattana Public Company Limited
999/9 The Offices at CentralWorld, 31st floor
Rama 1 Road, Pathumwan
Day of the shareholders’ meeting
- CPN sets the date, time, and venue of the shareholders' meeting taking into account the convenience with which the shareholders can attend the meeting.
- CPN provides computers and barcodes to facilitate the registration and vote counting in view of convenience, speediness, accuracy, and reliability of the information.
- CPN provides voting ballots for each agenda item.
- Shareholders are entitled to authorize the company's independent directors or other people deemed appropriate to attend the shareholders' meeting and exercise their rights to vote on their behalf.
- CPN clearly informs the shareholders of the regulations controlling the shareholders' meeting and the voting procedures at the beginning of the meeting.
- No addition can be made to the agenda item as listed in the invitation letter and no amendment to significant information can be made without notifying shareholders in advance.
- CPN's directors and executives attend the shareholders' meeting and allow the shareholders to ask and present their views, as well as to seek clarification from the directors, executives, and the auditors during applicable agenda items.
- CPN allows shareholders to vote for individual directors.
- CPN counts the vote and discloses the results of the vote for each agenda item in the meeting with clarity and transparency.
After the shareholders’ meeting
- CPN disseminates the resolutions of the meeting and the results of the vote for each agenda item via the Stock Exchange of Thailand's news channels.
- CPN prepares correct and complete minutes of the meeting to the Stock Exchange of Thailand and posts them on CPN's website within 14 days after the meeting.
- CPN disseminates the minutes of the meeting on CPN's website and via the Stock Exchange of Thailand's news channels.
- CPN disseminates the filming of the meeting via CPN's website or as VCDs.
Category 2: Equitable treatment of shareholders
CPN has devised policies and guidelines of fair treatment of all shareholders, whether minor investors or institutional ones, both in and outside the country, to exercise their rights as follows:
- Monitoring of inside information
The directors formulate a policy to monitor the use of inside information and CPN's securities transactions on the basis of equality and fairness of all shareholders and for the prevention of relevant directors and executives from undertaking dishonest securities transactions for their own benefit or the benefit of others.
- Control of inside information: The directors, executives, and all employees are prohibited from using CPN's material and undisclosed information to the public for their own benefit or the benefit of others and must strictly adhere to the policy on keeping and using inside information as specified by CPN.
- CPN's securities: The directors, the executives, and employees are entitled to invest in CPN's securities transactions. However, to prevent conflicts of interest, the directors, executives, and employees, as well as their spouses and children under the legal age, are prohibited from buying, selling, transferring, or accepting transfer of CPN's securities one month before the disclosure of the financial statements to the public. If the directors, the executives, and employees, as well as their spouses and children under the legal age, buy, sell, transfer, or accept transfer of CPN's securities, they must prepare and report a list of securities and a change in CPN's shareholding to the monitoring agency as specified. Furthermore, the Company Secretary is responsible for compiling securities holding information concerning directors and executives, as well as their spouses and children not yet of age, for the Board's information every quarter.
If a director, executive, or employee violates CPN's rules on the control of inside information and on CPN's securities holding, or other rules issued by applicable regulators, he or she is subject to CPN's disciplinary action and punishable by law.
- Monitoring of conflicts of interest
It is CPN's policy to conduct business with honesty, open-mindedness, transparency, and fairness. CPN forbids its directors, executives, and employees to compete with CPN, avoid making connected transactions relating to them or people/entities that may cause conflicts of interest with CPN. The Board ensures that the company strictly performs duties according to criteria, method, and disclosure of connected transactions as specified by law or the monitoring agency.
If it is necessary to undertake connected transactions, they must be in line with general business conditions as specified and approved by the Board, based on transparency and fairness, as if the transactions were undertaken with other parties, taking into account CPN's maximum benefit. Stakeholders with conflicts of interest are forbidden to take part in the consideration of connected transactions. If the connected transactions are not in line with general business conditions as specified and approved by the Board and may cause conflicts of interest, the transaction must be submitted to the Audit Committee for opinions before submitting to the Board or shareholders for approval.
- Disclosure of vested interests
The directors and the executives are responsible for disclosing vested interests held by themselves and relevant people that may relate to CPN's management according to the rules, conditions, and methods of the Capital Market Supervisory Board. The Company Secretary is responsible for compiling and submitting a copy of the report of such interests to the Chairman and the Chairman of the Audit Committee within seven days after receiving the report.
Category 3: Roles of stakeholders
CPN conducts business with fairness and adheres to the joint benefit between CPN and its stakeholders, as governed by the following policies:
- Shareholders: Stimulate growth with quality and stability for the shareholders' sustainable benefit with good and efficient performance; respect the shareholders' equal rights to receive necessary information; disclose correct and actual information; conduct business based on honesty, transparency, and fairness.
- Customers: Satisfy the customers with good service, fair, and proper treatment of customers; provide complete, correct, and actual information; undertake customer satisfaction surveys, the results of which are used to continuously improve the service.
- Business partners: Provide fair treatment of business partners based on joint benefit; create and maintain sustainable relationship with business partners; create trust, by which the company adheres to the clear procurement procedures and practices.
- Creditors: Strictly respect agreements with creditors; ensure timely repayment of loans and interests; thoroughly honor loan conditions as agreed.
- Employees: Provide fair and proper treatment of employees whether in opportunity, remuneration, appointment, transfer, or potential development; monitor the workplace for the safety of employees' life and property; provide channels for employees to express their views and suggestions, as well as fair treatment and non-discrimination of all employees.
- Business competitors: Conduct business with fairness; refrain from improperly seeking competitors' confidential information; refrain from abusing the intellectual property rights of others or those of competitors.
- Society, communities, and environment: Respect the relevant law, and/or regulations; monitor the operation of the company and prevent it from damaging the quality of life of society, communities, and the environment; develop society in its quality of life, education, energy saving, and environmental protection for the benefit of society at large.
- Government: Cooperate and support government policies for the benefit of the country under relevant law and criteria.
- Independent organizations and other related social organizations: Upgrade cooperation and exchange information with independent organizations and other related social organizations for the joint development of society and the country on a sustainable basis. Address society's expectations in a constructive and for public benefit.
CPN must provide channels and procedures for suggestions and complaints relating to the company's business operation with speed, fairness, and transparency.
Category 4: Disclosure of information and transparency
- Disclosure of information
CPN is committed to disclosing financial and non-financial information that is accurate, complete, transparent, thorough, and timely for investors and all stakeholders worldwide to gain access to information that is reliable, always adequate for decision-making, and conveniently accessible through documents, the website, and press conferences. Such information consists of:
- CPN's financial information and material information, such as financial statements of CPN and its subsidiaries; information on major shareholders and voting rights; information on directors and members of subcommittees; CPN's dividend payment policy, Code of Business Conduct and Corporate Governance Policy.
- CPN's major business updates and activities.
- Responsible persons for disclosure of information
- The President & CEO or the person assigned by the President & CEO to be responsible for the disclosure of information must adhere to correctness, completeness, timeliness, and fairness.
- The company secretary is responsible for disclosing key information to the Stock Exchange of Thailand, the Securities and Exchange Commission, shareholders, and investors.
- Top executives responsible for finance and investor relations are responsible for disclosing information and answering queries of shareholders, investors, stock exchange analysts, and the general public. The information covers financial statements, performance, nature of business, CPN's policy, operational plans and investment, development projects, shareholding structure, and key factors impacting performance.
- Top executives responsible for marketing and public relations unit are responsible for disclosing information and answering queries of the media and the general public on marketing plans and marketing campaigns. Moreover, if a significant event happens to CPN, the public relations unit must coordinate with the owner of the information to obtain facts and respond to queries of the media under the assigned scope.
- Those not responsible for disclosing company information or those not assigned by the President & CEO must not disclose inside information that may affect CPN's reputation and image, including the information that may affect the change in price and volume of CPN's securities transactions.
- Auditor and financial statements
The financial statements of CPN and the subsidiary companies are audited by an independent auditor with knowledge, skill, and qualifications as specified to ensure the Board and the shareholders that such financial statements reflect its actual financial status and operation. It is CPN's policy to change its auditors every five years to ensure complete independence.
The board values and takes responsibility for the financial statements of CPN and the subsidiary companies in line with general standards and practices. CPN devises a policy of proper accounting based on caution, correctness, and completeness to reflect its performance. The Board ensures that performance is reported and material information is transparently and sufficiently disclosed by regularly reporting to relevant agencies, such as the Securities and Exchange Commission and the Stock Exchange of Thailand, for the benefit of shareholders and investors. Moreover, the Board appoints the Audit Committee to be responsible for checking the reliability and accuracy of the financial statements as well as the internal control system in a sufficient and proper manner to ensure the reliability of CPN's financial statements.
Category 5: Responsibilities of the board of directors
- Composition and appointment
- The Board consists of at least five directors. At least one-third must be independent directors, the number of whom must be at least three. At least half of the directors must be permanent residents of the kingdom.
- The directors elect one of them as chairman. When deemed appropriate, the directors may elect one or several directors as vice chairman. The vice chairman is responsible for assignments by the chairman under CPN's regulations.
- The Chairman and the President & CEO are two separate persons for the sake of clear-cut segregation of roles and balance in the operation.
- The appointment of the directors must follow relevant law, rules, and regulations based on transparency and clarity.
- If a director resigns upon term expiration, the shareholders' meeting may elect his/her replacement through the decision of the majority of votes of the present shareholders. If there are equal votes among the directors, the Chairman of the meeting must cast the decisive vote.
- If a director's post becomes vacant for reasons other than term expiration, the Board may elect a qualified candidate to replace him/her in the next Board meeting. If the remaining term of directorship is shorter than two months, the newly elected one is to stay in office for the remaining term. The resolution of the board on this matter must consist of no less than three-quarter votes of the remaining directors.
- Directors must be ordinary citizens with the following qualifications:
- Are of legal age
- Are not bankrupt, incompetent, or equivalent
- Have not served prison terms for fraud
- Have not been dismissed from the government, organizations, or government agencies for fraud.
- Directors must possess knowledge, ability, and experience beneficial to the business operation with ethics, honesty, and sufficient time to devote to their work.
- Directors must not manage other activities opposing CPN's interest or provide interest to other people/entities, whether for their own benefit or the benefit of others.
- At every annual general meeting, one-third of the directors must resign from office. If the number is not a multiple of three, the number closest to one-third must be adopted.
- A director whose term has expired may be re-elected.
- Apart from normal term expiration, the directorship is to be considered terminated due to the following reasons:
- Disqualifications or qualifications contrary to the law and the company’s regulations
- Shareholders' resolution to remove him/her with no less than three-quarters of the votes of the present shareholders who are eligible to vote and with no less than half of the shares held by the present shareholders who are eligible to vote.
- Removal by court order.
- A director who wishes to resign must submit a resignation to CPN.
- Serving independently of the management and the major shareholder, independent directors serve up to two consecutive terms, extendable to up to nine years in total, for the expression of free views and service as independent directors. Taking effect from September 27, 2013, this decision is not retroactive for independent directors who assumed their titles before directors' appointment in 2008.
Selection of directors must be conducted in a transparent, fair, and accountable way under applicable legislation and regulations.
- Criteria and procedure: The Nomination and Remuneration Committee is responsible for selecting and screening qualified people under CPN's regulations, Board charter, and applicable criteria before tabling their names for the Board's endorsement and finally for the shareholders' appointment.
The Nomination and Remuneration Committee reviews eligible directors by:
- Allowing the major shareholder, minor shareholders, directors, and executives to nominate directors
- Examining the Director Pool of the Thai Institute of Directors Association or other agencies with similar lists
- Leveraging other channels considered suitable by the Nomination and Remuneration Committee.
- Structural diversity of the Board
The Board is made up of experts with diverse background on competency, experience, and skills that are helpful to business conduct, in addition to steadfast righteousness and integrity, regardless of gender, nationality, religious belief, age, professional skills, or other qualifications.
- Roles of the Chairman and the President
For clear role segregation and checks and balances, the Chairman and the President are always two different persons.
As a director bound by the Charter of the Board, the Chairman is committed to the Code of Business Conduct and Corporate Governance Policy in providing a role model for the Board, executives, and employees. The Chairman presides over the meetings of the Board as well as the shareholders, ensuring smooth meetings and giving directors and shareholders opportunities to express their views and recommendations freely and creatively.
The President is responsible for managing and administering day-to-day CPN businesses under its strategic plans, vision, and missions, with a scope of authority bound by law, objectives, and CPN's regulations, in addition to the decisions of the Board and shareholders' meetings.
- Policy on limiting the number of companies for directors and the president
- A director must not serve on more than five SET-listed companies.
- The President may hold directorships in another SET-listed company, but such action must not affect his own responsibility for CPN. In addition, the other company must not be in the same business or in competition with CPN. Board approval must first be sought before accepting a directorship in another company.
- Perform duties under the law, objectives, and rules of the company, as well as the resolutions of the directors and the shareholders' meeting with the duties of loyalty, care, accountability, and ethics, taking into account the fair profits of all shareholders.
- Formulate CPN's vision, mission, business plan, and annual budget with continuous monitoring of CPN's performance to ensure that the operation meets its objectives and timely solutions to problems.
- Approve key transactions under the scope of authorities of the directors and under the law and the company's regulations, as well as approving investment budgets exceeding 200 million baht.
- Appoint directors of subcommittees to support the work of the directors as deemed appropriate and necessary with regular monitoring of performance.
- Independent directors should exercise independent judgment in devising strategies, management, use of resources, appointment of directors, and setting of business standards. They should also be ready to disagree with the management or other directors if conflicted opinions affect shareholders' fair treatment.
- Disclose information to all shareholders and stakeholders on a correct, complete, transparent, reliable, timely, and equitable basis.
- Set up efficient and effective internal control and internal audit systems.
- Devise a proper and effective risk management system that can assess, monitor, and manage key risks.
- Arrange for the Company Secretary to assist the directors' activities and ensure that the directors and the company comply with the relevant law and regulations.
- Develop a code of business conduct for the directors, executives, and employees to set the standards for CPN's business operation.
- Prepare corporate governance principles and encourage everyone in CPN to strictly adhere to them.
- Ensure clear and transparent connected transactions.
- Ensure clear procedures of the Audit Committee's report to the directors when doubtful of transactions and actions that may seriously affect CPN's financial status and performance. Directors must rectify the problems within the timeframe deemed appropriate by the Audit Committee.
- Ensure the succession planning of CPN's top executives.
- Regularly review, improve, and update key policies and business plans as appropriate under prevailing circumstances.
- Review and rectify the charter of the Board as appropriate under prevailing circumstances.
- Seek professional opinions by hiring outside advisers paid for by the company.
- Perform other duties as specified by the shareholders.
- Appointment of subcommittees
The Board appoints subcommittees to assist in the monitoring and screening of key work and requires that the performance should be regularly reported back to the Board. The subcommittees consist of the following:
- Audit Committee
The Audit Committee is appointed by the Board, consisting of at least three independent directors, at least one of whom has sufficient knowledge and experience to check the reliability of financial statements. The Audit Committee, responsible for ensuring that CPN correctly, completely, sufficiently, reliably, and timely reports financial statements, ensures that the connected transactions or the transactions that may cause conflicts of interest are in line with the law and related rules, oversees accurate and complete disclosure of the information. They also ensure that there are proper and efficient internal control and internal audit systems, select the auditor and check financial statements prepared by the auditor, ensure the adherence to the relevant regulations and law, as well as encouraging CPN to have corporate governance principles and systematic and efficient risk management procedures. The Office of Internal Audit, the committee's direct report, supports its work.
- Nomination and Remuneration Committee
The Nomination and Remuneration Committee is elected by the board, consisting of at least three directors, with independent directors accounting for more than half of all directors. Its chairman must be an independent director. Below are its responsibilities:
Nomination: Ensure that the structure, size, and composition of the Board suit CPN and the changing atmosphere; ensure that Board structure comprises experts who are knowledgeable, experienced, and skillful in diverse fields; consider the criteria for selecting directors and President & CEO; select and nominate those persons qualified and appropriate to be appointed as directors and President & CEO; allow minor shareholders to nominate a person(s) name as director(s); formulate succession plans for President & CEO and senior executive position; consider appropriate strategies relating to human capital and organization management to be implemented to ensure its consistency with CPN's business operations.
Remuneration: Determine the methods and criteria of paying remuneration and other profits to the Board, subcommittees, and the President & CEO on the basis of clarity, fairness, appropriate to the responsibilities and other related factors inclusive of comparisons to remuneration of other companies within the same or similar industry and business sectors as CPN, and also take into consideration the overall increase to the total value of the shareholders equity in the long term; determine the remuneration of the directors and the subcommittees and submit it to the Board and the shareholders' meeting for approval, as well as determining objectives and assessing the performance of the President & CEO to submit to the Board for the consideration of the CEO's future remuneration.
- Risk Policy Committee
Appointed by the Board, the Risk Policy Committee consists of independent directors, senior-management directors, and the President, altogether numbering at least three persons. The Chairman must be an independent director. This committee acknowledges and comments on policies, strategies, structures, and framework of risk management of all sorts and at all levels of CPN; assesses the effectiveness of risk management; reviews, screens, and approves CPN's tolerable risks; reviews overall risk management; acknowledges key risks and monitor suitable responses; and comments on CPN's annual risk management strategy analysis.
- Corporate Governance and Sustainable Development Committee
The Corporate Governance and Sustainable Development Committee consists of members representing various units of CPN. It defines and reviews Code of Business Conduct and Corporate Governance Policy in line with updated international practices for the Board's approval; defines and reviews policies, rules, or guidance for corporate governance and sustainable development, while commenting on and promoting applicable plans or activities; represents CPN in communicating and executing activities on corporate governance and sustainable development; and ensures information disclosure on corporate governance and sustainable development to all stakeholders in an accurate and complete way through suitable communication channels.
- Board meetings
- The directors must hold meetings at least once every three months by setting meeting dates in advance all year round and may convene an extraordinary session if necessary.
- At least two directors are entitled to call for a meeting. The Chairman or the assigned person must set the date of the meeting within 14 days after receiving the request.
- The Chairman or the assigned person sends meeting invitations specifying the date, time, venue, and agenda details to all directors at least seven days ahead of the meeting. Except for the urgent case to protect CPN's interest, notification of the meeting can be given through other means and the meeting can be convened earlier.
- In the directors' meeting, at least half of the directors must be present. The Chairman of the Board acts as chairman of the meeting. If the Chairman cannot attend the meeting or cannot perform the duty, the attending directors will elect one among themselves as chairman.
- The resolution of the meeting will take into account the majority of votes, with one director having one vote. If the number of votes is equal, the Chairman will cast the decisive vote. Each director with vested interest(s) in any agenda item must abstain from voting on that item.
- The Board is authorized to invite the management, executives, or other relevant people to give opinions, attend the meeting, or present information for consideration.
- Non-executive directors must meet in the absence of the management at least once every year to share views on the topics relevant to their responsibilities.
- The Company Secretary or the assigned person is responsible for preparing the minutes of the meetings.
- The Company Secretary
- Qualifications and experience
The Company Secretary plays a key role in supporting and overseeing the Board's activities for efficiency and effectiveness under law, rules, regulations, and corporate governance, the Board appoints a suitable person in this position, based on the mastery of CPN's businesses under applicable legislation and criteria, including the memorandum of association, CPN's regulations, SEC Act, Public Company Limited Act, and Code of Business Conduct and Corporate Governance Policy.
The Company Secretary is responsible for communicating efficiently and effectively among the Board, executives, and shareholders to enable Board-related activities to proceed smoothly in line with the decisions of the Board and the shareholders.
To support and manage the activities of the directors in an efficient and effective manner, the Company Secretary has the following responsibilities:
- Prepare and file documents concerning the list of directors, CPN's annual report, invitation letters for CPN's director meetings and minutes of the Board meetings, invitation letters for shareholders' meetings, and minutes of the shareholders' meetings.
- File reports of vested interests of the directors or executives.
- Send the copy of reports of vested interests of the directors, executives, or connected persons to the Chairman and the Chairman of the Audit Committee within seven days after receiving the report.
- Arrange for the meetings of the Board and the shareholders under related rules, regulations, and law.
- Provide advice for the operation of CPN and the Board under the memorandum of association, CPN's regulations, SEC Act, Public Company Limited Act, and other relevant law.
- Act as a focal point for exchange of news and information among directors, executives, and shareholders.
- Coordinate and follow up operation under the resolutions of the directors and shareholders.
- Oversee disclosure of the information and reports under relevant responsibilities to the monitoring agency as specified by the rules and regulations of the authority.
- Perform other duties as announced by the Capital Market Supervisory Board or as assigned by the Board.
- Board's performance assessment
Together the directors define the criteria for performance self-assessment (collective and individual) in line with SET's guidance and the Board's own characteristics and structure. Assessment is done annually, the findings of which are jointly reviewed to improve their performance.
At each Board meeting, the directors assess collective meeting efficiency to improve the performance of directors and meeting organization.
- Subcommittees' performance assessment
To apply assessment outcomes to improve their performance in support of the Board and all aspects of CPN's business, each year each committee assesses its own performance. Each defines the criteria for self-assessment in line with its responsibility.
- President's performance assessment
The President's performance assessment is the duty of the Nomination and Remuneration Committee, which tables its findings for the Board's approval. The President contributes to goal-setting for his own performance and acknowledges each year's approved goals.
The Board explicitly sets the forms and criteria of remuneration and other benefits for the directors and submits them to the shareholders for approval. The Nomination and Remuneration Committee screens yearly remuneration figures transparently and fairly as fit the authorities, responsibilities.
- Training and knowledge development
Newly appointed directors receive information on CPN, rules, regulations, business information critical to the work of directors, minutes of the directors' meetings, and minutes of past meetings of the Audit Committee, and introduction to directors and executives. Moreover, directors are encouraged to undergo training and participate in trainings and seminars to improve their knowledge necessary for the work of directors.
- Succession plan
The Board ensures the development of succession plans for the President and senior executives. To this end, the Nomination and Remuneration Committee ensures transparency, fairness, and suitability to CPN's prevailing business outlook. Succession plans are reviewed annually, while steps are taken to maintain and develop relevant executives' capability to groom them for their new positions.