Remuneration for Non-Executive Directors The non-executive Directors’ fees for FY 2023, together with a breakdown of the components, are set out in the Non-Executive Directors’ Remuneration Table on page 145 of this Annual Report. These non-executive Directors’ fees are paid by the Manager. The compensation policy for non-executive Directors is based on a scale of fees divided into basic retainer fees for serving as Director and additional fees for serving on Board Committees. The non-executive Directors’ fee structure and Directors’ fees are reviewed and benchmarked against the REIT industry, appropriate to the level of contribution and taking into account the effort, time spent and demanding responsibilities on the part of the non-executive Directors in light of the scale, complexity and geographic scope of the CLCT Group’s business. The remuneration of non-executive Directors is reviewed from time to time to ensure that it is appropriate to attract, retain and motivate the non-executive Directors to provide good stewardship of the Manager and CLCT. The CEO is remunerated as part of the key management personnel of the Manager and does not receive any Director’s fees for his role as an executive Director. The non-executive Directors who are employees of the CLI group also do not receive any Directors’ fees. The non-executive Directors’ fees are paid in cash (about 80%) and in the form of Units (about 20%), save that a non-executive Director (not being an employee of the CLI group) who steps down from the Board during a financial year will be paid fees fully in cash. The Manager believes that the payment of a portion of the non-executive Directors’ fees in Units will serve to align the interests of non-executive Directors with the interests of Unitholders and CLCT’s long-term growth and value. The payment of non-executive Directors’ fees in Units is satisfied from the Units held by the Manager. No individual Director is involved in any decision of the NRC relating to his or her own remuneration. In order to encourage the alignment of the interests of the non-executive Directors with the interests of Unitholders, a non-executive Director is required to hold the number of Units worth at least one year of the basic retainer fee or the total number of Units awarded, whichever is lower, at all times during his or her Board tenure. As with previous years, an independent remuneration consultant, Willis Towers Watson, was appointed in FY 2023 to provide professional advice on Board remuneration, with a view to ensuring the fee structure is market competitive and consistent with industry practices. ACCOUNTABILITY AND AUDIT Principle 9: Risk Management and Internal Controls The Manager maintains adequate and effective systems of risk management and internal controls addressing material financial, operational, compliance and information technology (IT) risks to safeguard Unitholders’ interests and the CLCT Group’s assets. The Board has overall responsibility for the governance of risks and oversees the Manager in the design, implementation and monitoring of the risk management and internal controls systems. The ARC assists the Board in carrying out the Board’s responsibility of overseeing the risk management framework and policies for the CLCT Group. Under its terms of reference, the scope of the ARC’s duties and responsibilities includes: (a) making recommendations to the Board on the Risk Appetite Statement (RAS) for the CLCT Group; (b) assessing the adequacy and effectiveness of the risk management and internal controls systems established by the Manager to manage risks; (c) overseeing the formulation, updating and maintenance of an adequate and effective risk management framework, policies and strategies for managing risks that are consistent with the CLCT Group’s risk appetite and reporting to the Board on its decisions on any material matters concerning the aforementioned; (d) making the necessary recommendations to the Board such that an opinion regarding the adequacy and effectiveness of the risk management and internal controls systems can be made by the Board in the Annual Report in accordance with the Listing Manual and the Code; and CORPORATE GOVERNANCE 132 CAPITALAND CHINA TRUST
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