TUNG LOK RESTAURANTS (2000) LTD / Annual Report
2016
13
Corporate Governance Report
2.3 and 2.4 Board and NC
to assess independence of
directors; rigorous review
of directors who served
on the Board beyond nine
years from the date of his
appointment
The independence of each director is reviewed annually by the NC. The NC adopts the
definition of what constitutes an Independent Director from the Code in its review and the
Board, after taking into account the views of the NC, is satisfied that Dr Tan Eng Liang
(“
Dr Tan
”), Dr Ker Sin Tze (“
Dr Ker
”) and Mr Chee Wai Pong are considered independent
in character and judgement and that there are no relationships or circumstances which are
likely to affect, or could appear to affect, the Independent Directors’ judgment.
Particular rigorous review is applied in assessing the continued independence of a Director
having served beyond nine years from the date of his first appointment, with attention to
ensuring that his allegiance remains clearly aligned with shareholders’ interest. Although
both Dr Tan and Dr Ker have served on the Board for more than nine years from the date
of their first appointments, they have continued to demonstrate strong independence in
character and judgment over the years in the discharge of their duties and responsibilities as
Independent Directors of the Company, with the utmost commitment to protect and uphold
the interests of the Company and all shareholders, not just the substantial shareholders.
Dr Tan and Dr Ker have also contributed significantly to the discussion on matters before the
Board, which includes matters relating to the strategic direction and corporate governance
of the Group, expressed individual viewpoints, debated issues, sought clarification and
amplification as they deemed necessary including through direct access to the Management,
and objectively scrutinized Management. Further, having gained in-depth understanding of
the business, operating environment and direction of the Group, they provided the Group
with much needed experience and knowledge of the industry and offered valuable advice.
Their objective leadership, depth of experience and skills, make them invaluable members of
the Board. Both have independent income source apart from the fixed fees received from the
Company. Accordingly the NC, with the concurrence of the Board, is satisfied that both Dr
Tan and Dr Ker have remained independent in their judgment and can continue to discharge
their duties objectively.
The NC and the Board are of the view that no individual or small group of individuals
dominates the Board’s decision making process. Independent Non-Executive Directors
constructively challenge and help develop proposals on strategy and review the performance
of Management in meeting agreed goals and objectives and monitor the reporting of
performance.
2.5 Board composition and
size
The size and composition of the Board are reviewed from time to time by the NC to ensure
that the size of the Board is conducive for effective discussion and there is sufficient diversity
without interfering with efficient decision-making. The NC also reviewed and ensure that the
Board has an appropriate balance of independent directors. The Board is of the view that the
current board size and composition is appropriate, taking into account the nature and scope
of the Group’s operations, the requirements of the business and the need to avoid undue
disruptions from changes to the composition of the Board and board committees.
2.6 Board to comprise
directors with core
competencies
The Board proactively seeks to maintain an appropriate balance in its composition and size.
To assist the NC in its annual review of the Directors’ mix of skills and experiences which the
Board requires to function competently and efficiently, the Management compiled a Board
of Directors competency matrix form, providing information of the areas of specialisation
and expertise of the Directors. The Board and its board committees comprises respected
individuals from different backgrounds and who as a group provides core competencies,
such as business management experience, industry knowledge, legal, real estate and
tenancies, human resource management, financial and strategic planning experience and
customer-based knowledge that are extensive and critical to meet the Group’s objectives.
The Board, taking into account the views of the NC, considers that the directors provide
an appropriate balance and diversity of skills, experiences, gender and knowledge of the
Company that will provide effective governance and stewardship for the Group. The Board
includes two female directors in recognition of the value of gender diversity. Please refer to
the “Board of Directors” section of the Annual Report for the directors’ profile.
