SPH is committed to achieving high standards of corporate governance, to promote corporate transparency and to enhance
shareholder value. SPH is pleased to confirm that it has adhered to the principles and guidelines of the Code of Corporate
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|Board Composition and Balance
Principle 2: Strong and independent Board
Currently, the Board comprises 12 Directors, all of whom, except for the Chief Executive Officer (“CEO”), are non-executive and independent directors. Each director has been appointed on the strength of his/her calibre and experience. As a group, the Directors possess core competencies such as accounting, finance, business or management experience, industry knowledge and strategic planning experience. For effective deliberation and decision-making, the Directors have decided that the optimum size for the Board shall not exceed 12, except in special circumstances.
There is a strong independence element in the Board, with the Nominating Committee considering 11 out of 12 Directors to be independent from Management.
Key information regarding the Directors, including directorship and chairmanship both present and those held over the preceding three years in other listed companies, and other principal commitments, are set out in the Board of Directors’ section and on page 24 to page 27 which provides further information on them.
The Board and Management recognize the advantage of open and constructive debate. To facilitate this, Board members are supplied with relevant, complete and accurate information on a timely basis. Non-executive directors may challenge Management’s assumptions and also extend guidance to Management, in the best interest of the Group.
Non-executive Directors meet at least once annually without the presence of Management.
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|Chairman and Chief Executive
Principle 3: Clear division of responsibilities between Chairman and Chief Executive Officer to ensure a balance of power and authority
The Company has a separate Chairman and CEO. The Chairman is a non-executive and independent director and also chairs the EC. He sets the agenda for Board meetings, ensures that adequate time is available for discussion of all agenda items, in particular, strategic issues, and that complete, adequate and timely information is made available to the Board. He encourages constructive relations within the Board and between the Board and Management, facilitates the effective contribution of non-executive directors, and ensures effective communications with shareholders. He takes a lead role in promoting high standards of corporate governance, with the full support of the Directors, the Company Secretary and Management. Some non-executive directors are also appointed as directors in the Company’s subsidiaries or invited to attend adhoc meetings, to tap their expertise in specific areas and facilitate effective contribution by non-executive directors.
The Chairman and the CEO are not related. The CEO bears executive responsibility for the Group’s business and implements the Board’s decisions. The roles of the Chairman and the CEO are kept separate to ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making.
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Principle 4 : Formal and transparent process for appointment of new director
The Nominating Committee (“NC”) comprises four independent directors. It regularly reviews the balance and mix of expertise,
The NC regards succession planning as an important part of corporate governance and has an internal process of succession planning for Directors and the CEO to ensure the progressive and orderly renewal of Board membership.
The appointment of Directors is in accordance with Section 10 of the Newspaper and Printing Presses Act (Cap 206).
Directors’ re-nomination is reviewed by the NC on an annual basis. Article 111 of the Articles requires one-third of the Directors, or the number nearest to but not less than one-third, to retire by rotation at every annual general meeting (“AGM”). These Directors may offer themselves for re-election, if eligible. Directors of or over 70 years of age are required to be re-elected every year at the AGM under Section 153(6) of the Companies Act before they can continue to act as a Director.
The NC determines on an annual basis whether or not a director is independent, taking into account the Code’s definition of an “independent” director and guidance as to relationships the existence of which would deem a director not to be independent. A Director who has no relationship with the Group or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of his independent business judgment in the best interests of the Company, is considered to be independent.
The NC noted, in relation to Mr Lucien Wong, that as the total fees illed by M/s Allen & Gledhill (of which Mr Wong is chairman and partner) to the Group in FY 2012 had not exceeded $200,000, his independence would not be compromised. In relation to Ms Chong Siak Ching, the NC noted that although a subsidiary of the Group holds investments in certain companies in the Ascendas Group, of which Ms Chong is a Director, Ms Chong’s independence was not affected as she would be able to exercise independent judgment and demonstrate objectivity in her deliberations in the interest of the Company. In relation to Ms Tan Yen Yen, the NC noted that notwithstanding that the fees invoiced by Oracle Corporation Singapore Pte Ltd (a related entity of Oracle Corporation of which Ms Tan is Senior Vice-President, Applications, Asia Pacific) to the Company and a subsidiary for IT services in each of FY 2011 and FY 2012 exceeded $200,000, Ms Tan would still be regarded as an independent Director on the basis that she was not involved in the decision-making processes in respect of these transactions, and that she would be able to exercise independent judgment and demonstrate objectivity in her deliberations in the interest of the Company. For the above reasons, the NC determined Mr Wong, Ms Chong and Ms Tan to be independent Directors.
The NC has ascertained that for the period under review, all non-executive Directors are independent and that Directors have devoted sufficient time and attention to the Group’s affairs.
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Principle 5: Formal assessment of the effectiveness of the Board and contribution of each director
The Nominating Committee reviews the Board’s performance on an annual basis, and decides how this may be evaluated, based on performance criteria approved by the Board.
The Board has implemented a process for assessing the effectiveness of the Board as a whole, its Board Committees and for assessing the contribution by individual Directors to the effectiveness of the Board.
This process includes having Directors complete a Questionnaire seeking their views on various aspects of Board performance, such as Board composition, information, process and accountability. The Company Secretary compiles Directors’ responses to the Questionnaire into a consolidated report. The report is discussed at the NC meeting and also shared with the entire Board.
The NC reviews annually whether the Questionnaire should be completed by Directors. For FY2012, the NC assessed the performance of the Board as a whole, taking into account the Board composition and size, the Board’s access to information, Board processes, Board accountability, standard of conduct and performance of its principal functions and fiduciary duties, and guidance to and communication with Management.
The NC also assessed the performance of individual Directors based on factors such as the Director’s attendance; preparedness; candour; participation and contribution at Board meetings; and industry and business knowledge.
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|Access to information
Principle 6: Provision of complete, adequate and timely information prior to board meetings and on an on-going basis
The Board is provided with quarterly financial accounts, other financial statements and progress reports of the Group’s business operations, as well as analysts’ reports on the Company. The quarterly financial results and annual budget (including the forecast) are presented to the Board for approval. The monthly financial statements are made available to members of the Board. The Board also receives regular updates on the industry and technological developments. Such reports enable Directors to keep abreast of key issues and developments in the industry, as well as challenges and opportunities for the Group.
As a general rule, board papers are sent to Directors at least one week in advance in order for Directors to be adequately prepared for the meeting. Senior management attends Board meetings to answer any queries from the Directors. The Directors also have unrestricted access to the Company Secretary and Management at all times. Directors are entitled to request from Management and are provided with such additional information as needed to make informed and timely decisions.
The Company Secretary works closely with the Chairman in setting the agenda for board meetings. She attends all Board meetings and ensures that board procedures are followed and that applicable rules and regulations are complied with. Under the direction of the Chairman, the Company Secretary’s responsibilities include ensuring good information flow within the Board and its Board Committees, and between Management and non-executive Directors. The Company Secretary also organizes orientation and training for new directors, as well as updates and advises Directors on all governance matters.
The Articles provide that the appointment and removal of the Company Secretary is subject to the approval of the Board.
Should Directors, whether as a group or individually, need independent professional advice relating to the Company’s affairs, the Company Secretary will appoint a professional advisor to render the advice and keep the Board informed of such advice. The cost of such professional advice will be borne by the Company.
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Principle 7: Formal and transparent procedure for fixing remuneration packages of directors
The Remuneration Committee (“RC”) comprises four non-executive and independent directors.
The RC sets the remuneration guidelines of the Group for each annual period, including the structuring of long-term incentive plans, annual salary increases and variable and other bonuses for distribution to employees. It administers the SPH Performance
Share Plan and the Employee Share Option Plan. The RC also reviews the remuneration framework (covering all aspects of remuneration including but not limited to directors’ fees, salaries, allowances, bonuses, options, share-based incentives and awards, and benefits in kind) and specific remuneration packages of Directors including that of the CEO, and key management personnel and submits its recommendations to the Board for endorsement.
The RC may seek expert advice inside and/or outside of the Company on remuneration of Directors and staff. It ensures that in the event of such advice being sought, existing relationships, if any, between the Company and its appointed remuneration consultants will not affect the independence and objectivity of the remuneration consultants. In FY2012, the Company engaged the services of Carrots Consulting, which has no relationship with the Company, on staff remuneration matters.
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|Level and mix of remuneration
Principle 8: Appropriate remuneration to attract, retain and motivate directors
The level and mix of remuneration for Directors is set out under Principle 9.
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Disclosure on Remuneration
The level and structure of the Group’s remuneration policy are aligned with its long-term interest and risk policies, as are appropriate to attract, retain and motivate Directors to provide good stewardship, as well as motivate key management personnel to successfully manage the Group.
For the period under review, the CEO’s remuneration package includes a variable bonus element and performance share grant, which are based on the Company’s and individual performance and have been designed to align his interests with those of shareholders. As an executive director, the CEO does not receive Directors’ fees.
Non-executive directors, including the Chairman, are paid Directors’ fees, subject to the approval of shareholders at the AGM. Directors’ fees comprise a basic retainer fee, fees in respect of service on Board Committees, attendance fees, as well as fees for participation in special projects, adhoc committees and subsidiary boards.
The Directors’ fee structure for service on the Board and Board Committees is as follows:
The attendance fees payable to Directors for attendance at each Board and Board Committee meeting are as follows:
A breakdown, showing the level and mix of each individual Director's remuneration payable for FY 2012 is as follows:-
Remuneration of Key Management Personnel
The remuneration of the top five key management personnel of the Company (excluding the CEO) in each remuneration band for this financial year is set out below. The Board has, on review, decided not to disclose the names of the executives given the competitive pressure and disadvantages that this might bring.
The Company adopts a remuneration policy for staff comprising a base salary, a variable component, and benefits in kind. The variable component is in the form of a variable bonus that is linked to the Company’s and individual performance, inclusive of financial targets such as operating profit and economic value added (EVA). The performance-based incentives aim to motivate executives to maximise operating and financial performance and align the interests of the executives with those of shareholders. The benefits in kind include club and car benefits. The RC approves the bonus for distribution to staff based on individual performance.
The above remuneration bands exclude performance shares granted to staff under the Performance Share Plan. Details of the Performance Share Plan are set out in the Directors’ Report, Notes to the Financial Statements and the Notice of Annual General Meeting.
The total remuneration paid to the top five key management personnel of the Company (excluding the CEO) for FY 2012, excluding performance shares granted to staff under the Performance Share Plan, is $4,227,000. There is no termination, retirement and post-employment benefits granted to Directors, the CEO and the top five key management personnel.
The Company does not employ any immediate family member of any Director or the CEO.
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ACCOUNTABILITY AND AUDIT
SPH is committed to discharging its obligation to provide prompt and thorough disclosures.
Management provides Directors with the monthly management accounts within seven business days of month end. Quarterly and annual results are released via SGXNET within 45 days of the end of the quarter. The CEO and the Chief Financial Officer provide assurance to the Board on the integrity of these financial statements through a written representation.
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Principle 11: Establishment of an Audit Committee with written terms of reference
The Audit Committee (“AC”) currently comprises four members, all of whom are independent non-executive Directors.
The NC is of the view that the members of the AC have sufficient financial management expertise and experience to discharge the AC’s functions given their respective experience as directors and/or senior management in accounting and financial fields.
The AC performs the functions as set out in the Code. The AC has conducted an annual review of the performance of the external auditor and the volume of non-audit services to satisfy itself that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors.
The AC meets with the external and with the internal auditors, in each case, without the presence of Management, at least once a year. The audit partner of the external auditors is rotated every five years, in accordance with the requirements of the listing rules of the Singapore Exchange Securities Trading Limited.
Quarterly financial statements and the accompanying announcements are presented to the AC for approval, before endorsement by the Board, to ensure the integrity of information to be released.
During the financial year, the AC reviewed the quarterly financial statements prior to approving or recommending their release to the Board, as applicable; the annual audit plan of the external and internal auditors and the results of audits performed by them, the list of interested person transactions and non-audit services rendered by the external auditors, and the re-appointment of the external auditors and its remuneration. It also reviewed Management’s assessment of fraud risks, adequacy of the whistle-blower arrangements and the whistle-blower complaints.
As stated earlier in this report, the AC takes measures to keep abreast of the changes to accounting standards and issues which have a direct impact on financial statements, with training conducted by professionals or external consultants.
Code of Business Ethics and Employee Conduct Policy
The Group has an existing Code of Business Ethics and Employee Conduct Policy (“Ethics Code”), which is posted on the Company’s intranet website, to regulate the ethical conduct of its employees. The Group also has a Whistleblowing Policy & Procedure which is posted on the SPH corporate website, to allow staff and external parties such as suppliers, customers, contractors and other stakeholders, to raise concerns or observations in confidence to the Company, about possible irregularities for investigation. Such concerns include dishonesty, fraudulent acts, corruption, legal breaches and other serious improper conduct; unsafe work practices and any other conduct that may cause financial or non-financial loss to the Group or damage to the Group’s reputation. The Whistleblowing Policy encourages staff and external parties to identify themselves whenever possible to facilitate investigations, but will also consider anonymous complaints, in certain circumstances. It makes available to staff and external parties the contact details of the Receiving Officer, who may also forward the concern to the respective Heads of Division, CEO, Audit Committee Chairman and/or Chairman.
Details of the aggregate amount of fees paid to the external auditors for the financial year, and a breakdown of the fees paid in total for audit and non-audit services respectively, can be found in the Notes to the Financial Statements. SPH has complied with Rules 712 and 715 of the Listing Manual in relation to its auditors.
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Principle 12: Sound system of internal controls
The functions of the BRC include the following:
The BRC comprises four members, all of whom are independent non-executive directors. There are currently two common members between the BRC and the Audit Committee, including the chairman of the BRC.
Concurrently, a Risk Management Department has been set up to manage and implement the Company’s policies and processes, and assist in identifying, monitoring and managing risks within the Group.
The Risk Management Report can be found on page 81.
In the course of their statutory audit, the Company’s external auditors will highlight any material internal control weaknesses which have come to their attention in carrying out their normal audit, which is designed primarily to enable them to express their opinion on the financial statements. Such material internal control weaknesses noted during their audit, and recommendations, if any, by the external auditors are reported to the AC.
Based on the internal controls established and maintained by the Group, work performed by the internal and external auditors, and reviews performed by Management and various Board Committees, the Board, with the concurrence of the Audit Committee, is of the opinion that the Group’s internal controls were adequate as at 31 August 2012 to address financial, operational and compliance risks, which the Group considers relevant and material to its operations.
The Board notes that the system of internal controls provides reasonable, but not absolute, assurance that the Group will not be affected by any event that could be reasonably foreseen as it strives to achieve its business objectives. In this regard, the Board also notes that no system can provide absolute assurance against the occurrence of material errors, poor judgement in decisionmaking, human error, fraud or other irregularities.
Code of Dealings
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Principle 13: Establishment of an internal audit function that is independent of the functions it audits
IAD is staffed with eight audit executives, including the Head of Internal Audit. Most of the IAD staff have professional qualifications, and are members of the Institute of Internal Auditors, Inc. (“IIA”). Some are qualified IT auditors and/or Certified Fraud Examiners. All IAD staff have to adhere to a set of code of ethics adopted from The Institute of Internal Auditors, Inc. The Head of Internal Audit reports directly to the chairman of the AC on audit matters, and to the CEO on administrative matters. IAD has adopted the Standards for Professional Practice of Internal Auditing set by IIA and ensures staff competency through the recruitment of suitably qualified and experienced staff, provision of formal and on-the-job training, and appropriate resource allocation in engagement planning.
The AC reviews IAD’s reports on a quarterly basis. The AC also reviews and approves the annual IA plans and manpower to ensure that IAD has the necessary resources to adequately perform its functions.
The AC approves the hiring, removal, evaluation and compensation of the head of the internal audit function, who has unfettered access to all the Company’s documents, records, properties and personnel, including access to the AC.
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|COMMUNICATION WITH SHAREHOLDERS
Principle 14: Regular, effective and fair communication with shareholders
The Company holds analysts’ briefings of its half-year and full-year results and a media briefing of its full year results. The quarterly financial results are published through the SGXNET, news releases and the Company’s corporate website. A webcast of the halfyear and full-year results briefing is also available on the website. The date of release of the results is announced through SGXNET about two weeks in advance. The Company also conducts analysts’ briefings and investor roadshows to maintain regular dialogue with investors and shareholders as well as to solicit and understand the views of shareholders.
The Company does not practise selective disclosure. Price-sensitive information is first publicly released through SGXNET, either before the Company meets with any investors or analysts or simultaneously with such meetings. All shareholders of the Company receive the summary financial report, and, on request, the full annual report, and notice of AGM, which is held within four months after the close of the financial year. The notice is also advertised in the newspapers. The summary financial report and the annual report are also available on the Company’s corporate website, www.sph.com.sg.
At the start of each AGM, the Chairman updates shareholders on the Group’s performance in the past year, as well as its growth plans and outlook.
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|Principle 15: Greater shareholder participation at AGMs
The Articles allow a shareholder to appoint one or two proxies to attend and vote instead of the shareholder. The Articles currently do not allow a shareholder to vote in absentia. Singapore Press Holdings annual report 2012
Resolutions are, as far as possible, structured separately and may be voted on independently. All polls are conducted in the presence of independent scrutineers.
For greater transparency in the voting process, all resolutions are passed at the AGM through electronic poll voting. Votes cast for and against each resolution are displayed live on-screen to shareholders immediately at the meeting. The total numbers of votes cast for and against each resolution are also announced after the meeting via SGXNET.
The Company is in full support of shareholder participation at AGMs. For those who hold their shares through CPF nominees and who are not registered as shareholders of the Company, the Company welcomes them to attend the AGM as observers. All Directors, including the chairmen of the EC, AC, NC, RC and BRC, and senior management, are in attendance at the AGMs and Extraordinary General Meetings to allow shareholders the opportunity to air their views and ask Directors or Management questions regarding the Company. The external auditors are also invited to attend the AGMs to assist the Directors in answering any queries relating to the conduct of the audit and the preparation and content of the auditors’ report.
Directors’ Attendance at Board and Board Committee Meetings (for the financial year ended 31 August 2012)
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