56 CAPITALAND CHINA TRUST GOVERNANCE ORGANISATIONAL CAPITAL Board succession planning is carried out through the annual review by the NRC of the Board’s composition as well as when a Director gives notice of his or her intention to retire or resign. The annual review takes into account, among other things, the requirements in the Listing Manual and the Code, feedback from individual Directors as well as the diversity targets and factors in the Board Diversity Policy. The outcome of that review is reported to the Board. The Board seeks to refresh its membership progressively and in an orderly manner, whilst ensuring continuity and sustainability of corporate performance. The Board also has in place guidelines on the tenure of Directors. The guidelines provide that an ID should serve for no more than a maximum of two threeyear terms and any extension of tenure beyond six years will be rigorously considered by the NRC in arriving at a recommendation to the Board, and will be on a yearly basis up to a period of nine years (inclusive of the initial two three-year terms served). The NRC identifies suitable candidates for appointment to the Board. Searches for possible candidates are conducted through contacts and recommendations. In this regard, the Manager may rely on external consultants from time to time to assist the NRC in identifying candidates, to ensure that a diverse slate of candidates is presented for the NRC’s and the Board’s consideration. Candidates are identified based on the needs of CLCT, taking into account the strategic priorities of CLCT and the relevant skills required. The candidates will be assessed against a range of criteria including their demonstrated business sense and judgement, skills and expertise, and market and industry knowledge (and may include elements such as financial, sustainability or other specific competency, geographical representation and business background) with due consideration to diversity, including but not limited to diversity in business or professional experience, age and gender. The NRC also considers the qualities of the candidates, in particular whether they are aligned to the strategic directions and values of CLCT, while assessing the candidates’ ability to commit time to the affairs of CLCT, taking into consideration their other current appointments or commitments. The NRC uses a board competency matrix as a guide in determining if there are gaps in the skills of the Board as a whole and if the skills, expertise and experience of a candidate would complement those of the existing Board members. The NRC also assesses annually, and as and when circumstances require, if a director is independent, having regard to the circumstances set forth in Provision 2.1 of the Code. Directors disclose their relationships with the Manager, its related corporations, its substantial shareholders, CLCT's substantial Unitholders or the Manager's officers, if any, which may affect their independence, to the Board. For further information on the Board's determination in this regard, please refer to "Board Independence" under Principle 2 in this Report. Whilst the Board believes that it has an optimal blend of backgrounds, experience, knowledge in business and general management, and expertise relevant to help CLCT deliver on its strategic priorities, it believes in planning for orderly succession as well as contingencies and is continually looking out for opportunities to fill future gaps in competencies and to renew the Board in a progressive manner. There is also no alternate director to any of the Directors. In keeping with the principle that a Director must be able to commit time to the affairs of the Manager, the Board has adopted the principle that it will generally not approve the appointment of alternate directors to the Directors. For more details on the Board’s profile and details on other positions and commitment they hold, please refer to page 34 to 39 of CLCT’s Annual Report 2023. Board Performance The Manager believes that oversight from a strong and effective Board goes a long way towards guiding CLCT’s success. Whilst Board performance is ultimately reflected in the long-term performance of the CLCT Group, the Board believes that engaging in a regular process of self-assessment and evaluation of Board performance provides an opportunity for the Board to reflect on its effectiveness including the quality of its decisions, and for Directors to consider their performance and contributions. It also enables the Board to identify key strengths and areas for improvement which are essential to effective stewardship and attaining success for CLCT, in addition to improving working relationships with Management.
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