Corporate Governance Principle 3: Chairman and Chief Executive Officer The roles of the Chairman and the CEO are held by separate individuals to ensure a clear division of responsibilities between the leadership of the Board and Management, such that no individual has unfettered powers of decision-making. The Chairman does not share any family ties with the CEO. The Chairman leads the Board and plays a pivotal role in promoting open and constructive engagement and dialogue among the Directors as well as between the Board and Management at meetings. The Chairman also presides at general meetings of Unitholders where he fosters constructive dialogue between the Unitholders, the Board and Management. The Chairman provides oversight to the CEO, who has full executive responsibilities to manage the CLCT Group’s business and to develop and implement Boardapproved policies. The separation of the responsibilities of the Chairman and CEO and the resulting clarity of roles facilitate robust deliberations on the CLCT Group’s business activities and ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making. As the roles of the Chairman and the CEO are held by separate individuals who are unrelated, and the Chairman is an ID, no lead ID has been appointed. Moreover, the Board has a strong independent element as at the date of this Annual Report, 6 out of 10 directors (including the Chairman) are non-executive IDs. Principle 4: Board Membership The Board has a formal and transparent process for the appointment and re-appointment of Directors, taking into account the need for progressive renewal of the Board. The NRC makes recommendations to the Board on all appointments to the Board and Board Committees. All Board appointments are made based on merit and subject to the Board’s approval. As at the date of this Annual Report, the NRC comprises 3 non-executive directors, 2 of whom (including the chairman of the NRC) are IDs. The NRC met twice in FY 2024 and reviewed and approved various matters via circulating papers. Under its terms of reference, the NRC’s scope of duties and responsibilities includes the following: (a) review and make recommendations to the Board on the Board size and composition, succession plans for Directors and composition of the Board Committees; (b) review and recommend an objective process and criteria for evaluation of performance of the Board, Board Committees and Directors; (c) consider annually and when required, if a Director is independent; and (d) consider and make recommendations to the Board on the appointment and re-appointment of Directors. Guided by its terms of reference, the NRC oversees the development and succession planning for the CEO. This includes overseeing the process for selection of the CEO and conducting an annual review of career development and succession matters for the CEO5. Board Composition and Renewal The NRC considers different time horizons for purposes of succession planning. The NRC evaluates the Board’s competencies on a long-term basis and identifies competencies which may be further strengthened in the long term to achieve CLCT’s strategy and objectives. As part of medium-term planning, the NRC seeks to refresh the membership of the Board progressively and in an orderly manner, whilst ensuring continuity and sustainability of corporate performance. The NRC also considers contingency planning to prepare for sudden and unforeseen changes. In reviewing succession plans, the NRC has in mind CLCT’s strategic priorities and the factors affecting the long-term success of CLCT. The NRC aims to maintain an optimal board composition by considering the trends affecting CLCT, reviewing the skills needed and identifying gaps, including considering whether there is an appropriate level of diversity of thought. The process ensures that the Board has capabilities and experience which align with CLCT’s strategy and the operating environment, and includes the following considerations: (a) the current size of the Board and Board Committees, composition mix and core competencies, (b) the candidate’s/Director’s independence, in the case of an independent director, (c) the composition requirements for the Board and relevant Board Committees (if the candidate/ Director is proposed to be appointed to any Board Committee), and (d) the candidate’s/Director’s age, gender, track record, experience and capabilities and such other relevant factors as may be determined by the Board, which would provide an appropriate balance and contribute to the collective skills of the Board. 5 While this is a partial deviation from Provision 4.1(a) which requires the NRC to make recommendations to the Board on relevant matters relating to the review of succession plans, in particular the appointment and/or replacement of KMP, the Board is of the view that such matters could be considered either by the NRC or by the Board as a whole given that the NRC and/or the Board as a whole is kept abreast of relevant matters relating to the review of succession plans relating to KMP, in particular the appointment and/or replacement of KMP. This is accordingly consistent with the intent of Principle 4 of the Code. 60 CapitaLand China Trust
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