Corporate Governance
Corporate Governance
Chapter 5 Responsibilities of the Board

The Board of Directors has the important role of the care and control for benefit to the Company. The Board of Directors is responsible to the duty to shareholders and is independent from the Company’s management.

5.1 Structure of the Board of Directors

Two directors shall be empowered to jointly sign and affix Company seal or one director is authorized to sign and seal of the company only for the following matters.

  • a) Submission of documents and undertaking any work with the Ministry of Commerce and the government agencies under the supervision of the Ministry of Commerce
  • b) Submission of documents and undertaking any work with the Ministry of Labor and the government agencies under the supervision of the Ministry of Labor.
  • c) Submission of documents and undertaking any work with the Revenue Department and the government agencies under the supervision of the Revenue Department
  • d) Submission of documents and undertaking any work with the Ministry of Interior and the government agencies under the supervision of the Ministry of Interior.
  • e) Submission of documents and undertaking any work with Bangkok Metropolitan Administration and the government agencies under the supervision of Bangkok Metropolitan Administration.
  • f) Submission of documents and lodging a complaint to file the case of missing property of the company with the police officers.
  • g) Undertaking and contact with any government agency or state enterprise or private organization related to the services for running water, electricity, telephone, mail and internet to apply for permission, transfer of ownership and accept the transfer of ownership, to pledge or accept the return of deposit, to transfer and accept the transfer of deposit related to running water, electricity, telephone, mail and internet.

5.1.1 Board Elements

  1. The Board of Directors consists totally of not less than 9 persons with qualifications as required by law and the Articles of Association of the Company.
  2. Chairman of the Board must be independent directors.
  3. The Board of Directors consists of not less than 4 independent directors 38% of the Board of Directors. Seafco PLC. in defining the terms of the independent Director of the Board, the Securities and Exchange Commission and the stock exchange of Thailand Thailand. According to the capital market supervisory board supervisory 4./2552 (2009) date 20 February 2552(2009), i.e., the "independent Director" carefully refers to a Director. By features:
    • Holding no more than 1 percent of the total shares with voting rights in the Company, its group companies, associated companies, subsidiaries, or being a potentially conflicting person.
    • Having had no managerial participation; being not an employee, staff, regularly paid advisor, person providing professional service to the Company, such as auditor or lawyer, or a person empowered to control the Company, its group companies, associated companies, subsidiaries, or being a potentially conflicting person, without aforesaid interests or conflicts of interests for a period of not less than 2 years.
    • Having no business relationships, interests, conflicts of interests, directly or indirectly, in finance and management, and being not a customer, partner, raw materials supplier, trade creditor/debtor, loan creditor/debtor of the Company, its group companies, associated companies, subsidiaries, or being a potentially conflicting person which could lead to lack of independence.
    • Being not a close relative of the management or major shareholders of the Company, its group companies, associated companies, subsidiaries, or a potentially conflicting person and not appointed as its fiduciary representative.
  4. Appointment of directors is in accordance with a specifically included agenda focusing on transparency and clearness. Nominating a candidate should be made along with an adequate provision of his/her background information and details for the benefit of selection.
  5. Backgrounds of all directors are publicly disclosed thoroughly and each time of director change.
  6. Board Chairman is not a chairman or member of any sub-committees in order to leave their undertakings independent.
  7. Board of Directors have to arrange a meeting on a regularly basis at least four a year.
  8. Sub-committees have to arrange a meeting on a regularly basis at least two a year.
  9. The number of directors attending the meeting and making any resolution is required to be at least half of the total number of the directors and the resolution is required to be approved by the majority vote.

5.1.2 Board Qualifications

  1. Board qualifications must not be contrary to the Public Limited Companies Act.
  2. Having leadership, broad vision, virtue, ethic, and good record of employment.
  3. Having interest in the Company’s business and being able to provide adequate dedication.
  4. Directors must be nominated by the Recruitment and Compensation Committee and appointed by the shareholders’ meeting.
  5. Neither conducting nor participating in any businesses of the same conditions and competing with Company business, whether for personal or others’ gain.
  6. The director is not allowed to take the directorship more than 5 companies.

5.1.3 Roles, Duties and Responsibilities of Board Chairman

  1. To act as the leader of the Board of Director, control, follow up and manage the Board of Directors, committees and subcommittees to ensure attainment of objectives as planned.
  2. To chair the Board Meetings and Shareholders Meetings.
  3. To cast a ruling vote at the Board Meeting in case of a tie vote.

5.1.4 Roles, Duties and Responsibilities of Board of Directors

  1. Perform duties in compliance with laws, the objects, Articles of Association, and shareholders meeting resolutions with honesty and integrity, Company interests carefully maintained, and responsibility toward the shareholders.
  2. Define policies and operational direction of the Company and supervise to ensure that managerial implementations are effective and efficient based on the policies under good corporate governance and toward the best interest of the Company and its shareholders.
  3. Provide the Company with an effective and reliable accounting system, financial reporting, internal control and internal audit.
  4. Participate in risk management implementation by providing a guideline and suitably adequate risk management measure regularly monitored.
  5. Regulate to ensure that all stakeholder parties are treated ethically and equitably by the management team.
  6. Independent directors are ready to use their own discretion independently in their consideration of strategy determination plan, management, resources use, director appointment, and operational standard establishment so as to raise highest the economic value for the Company and its shareholders.
  7. The good governance policy, including vision, mission and strategy of the company in the preceding years, is required to be reviewed and approved consistently.
  8. Make available a Company secretary to assist in implementing several board activities, such as Board and shareholders meeting, give the Board and Company advices about their personal performance and carrying out in compliance with applicable laws and ordinance on a regular basis, and ensure proper disclosure by the Board and Company of data and information.
  9. Provide as guidelines for internal performance, provisions about the Code of Conduct and business ethics, and ethics for directors, executives and staff.
  10. Stop trading securities at least 1 month prior to a news release of financial statements and at least 3 days subsequent to such release.
  11. Report securities holding by them, their spouses and children of an illegal age to a Board meeting at every occurrence of change, and to the Company without delay on the following cases:
    • Having a conflict of interest, directly or indirectly, in any contract executed by the Company during a financial year.
    • Holding stocks, debentures or preference shares of the Company and its group companies.
  12. To assess themselves annually to ensure that they properly take control and perform their tasks well enough. The assessment shall be used for management improvement. The assessment shall be done on the SEC form adapted by the company in line with the company’s Board of Directors. The assessment results shall be reported to the Board of Directors for use by the management.

5.1.5 Roles, Duties and Responsibilities of the President and CEO

  1. To adopt business policies and strategies; to set targets and allocate annual budgets for the Company and affiliates for approval by the Board of Directors.
  2. To operate business according to the business policies and strategies; to attain the targets with the annual budgets allocated for the Company and affiliates and approved by the Board of Directors.
  3. To report results of operation of the company and affiliates monthly and quarterly for comparison with the plan and budget for acknowledgement and suggestions by the Board of Directors.
  4. To approve payment up to 5 million Baht at a time, subject to reporting such payment to the Board of Directors.
  5. To approve investment not exceeding 50 million Baht in a project related to the company’s core business with IRR Project not less than 15%; any project investment – such as maintenance, efficiency increase and replacement of machinery -- that do not meet the above criteria should be submitted to the Board of Directors for approval.
  6. To approve reorganization of sections or lower units.
  7. To perform other tasks assigned by the Board of Directors.

    The authority of the President and CEO does not include (must not be in conflict with the rules of the SEC) approval of transactions which create conflict of interests of the President and CEO, other stakeholders, the company or affiliates or the intercompany transactions, sale of the assets of the company or affiliates which requires approval of the Board Meeting or Shareholders Meeting.

  8. To comply with the purchase regulations adopted on 1 March 2006.
  9. The director is not allowed to take the directorship more than 3 companies.
  10. To prepare and make disclosure of shareholding and change in shareholding in his securities and forward contracts, his spouse or those living like a spouse and underage children to the board of directors of the company.

Individual self-assessment of the director

In 2016 the individual self-assessment of the director has been launched as a tool to help the directors to review and develop their duties to ensure efficiency and effectiveness. The assessment topics are related to the key responsibility and duty of the board of directors in accordance with the laws, ethics of the directors, good governance practice of the Office of the Securities and Exchange Commission of Thailand.

  1. Ethics and duties to be performed by the director
  2. Determination of strategy, supervision and monitoring
  3. Responsibility towards stakeholders

Procedures

The Internal Auditing Division of the company will submit the assessment form to every director for self-assessment at the end of every year and collect and make a report to the audit committee for further submission to the board of directors of the company for acknowledgement and discussion. In 2016 the overall assessment is about 90%, which is quite satisfactory.

Assessment of the entire board of directors is planned to be made in 2017 while the assessment forms are being prepared at present.

5.1.6 Assessment of performance of the President and CEO

The Board of Directors requires that the performance of the President and CEO be assessed annually, using the targets and criteria related to successful implementation of the strategic plans, for determination of proper remuneration and rewards.

5.1.7 Improvement of Directors and Executives

The Board of Directors encourage the training and education of directors and executives to provide ongoing operational improvements, such as holding meetings between the directors and high level executives so that they can exchange ideas with each other; make plan for the development of President, Executive Vice President and Vice President to ensure that they are competent enough to perform the following duties.

  1. The Board of Directors shall make plan for the increase of the executives’ potential, replacement of executives such as President and CEO and Executive Vice President or his deputy.
  2. The Recruitment and Remuneration Fixing Committee shall set forth the competency of each executive to ensure engagement of persons with the right qualifications for any vacant positions.
  3. To assign the Deputy Executive Vice President: Administration Group the task of overseeing the training and development of knowledge and skills of the new President and CEO.
  4. The President shall report the results of the operation and development according to the leadership development program to the Recruitment and Remuneration Fixing Committee twice a year.
  5. The Recruitment and Remuneration Fixing Committee shall regularly review and summarize the plan for the replacement of President and Executive Vice President and submit a report to the Board of Directors twice a year.

5.2 The Executive Committee

The Duty and Authority of the Executive Committee

The Executive Committee is to establish policy, guideline, strategy, and core management structure to operate the business of the company corresponding and supportive to the economic environment and competition as announced at the General Shareholders’ Meeting. The Executive Committee is to report to the Board of Directors for approval its business plan, budget, and delegation of authority, to enable the Board to follow-up on the policy, the efficient conduct of the company’s business, and the operating results according to the approved business plan. The Committee is to engage in financial transaction with financial institution and perform other matters as assigned by the Board of Directors.

Quorum of the meeting of the board of directors to pass a resolution

The policy of the company is that the resolution of the board of directors is required to be passed by the meeting of the board of directors attended by at least two-thirds of the total directors.

5.3 Sub-committees

The company has established a Sub-Committee, Audit Committee, The Recruitment and Compensation Committee, Corporate Governance and Risk Management Committee and Social responsibility and sustainable development Committee as follows:-

5.3.1 Audit Committee

The audit committee has been appointed since March 2, 2004 with the term in the office of 3 years and the audit committee is required to arrange a meeting and make a report to the board of directors of the company.

The Audit Committee must consist of not less than 4 independent directors, at least one being knowledgeable and experienced in financial review

Currently, Mr. Somkual Musig – In an experience in the financial statements. The Bachelor of Business Administration (Accounting) from Thammasat University.

The Duty and Authority of the Audit Committee

  1. Review to ensure proper financial reporting and adequate disclosure by coordinating with an auditor from outside, with the management being responsible for producing financial reports both quarterly and annually. The Audit Committee might suggest the auditor to review or audit any transactions deemed necessary and important during an audit.
  2. Review to ensure the halving of a suitably efficient internal control and internal audit, jointly with external and internal auditors.
  3. Review to ensure that Company performance conforms to the law on securities and stock exchange, Stock Exchange’s requirements, or laws related to securities business.
  4. Consider, select and nominate for appointment, a Company auditor and propose auditor emolument with regard to credibility, resourcefulness and amount of audit works of such auditing firm, including the experience of the person designated for auditing.
  5. To disengage auditor who fails to accomplish to tasks.
  6. To recruit and nominate the auditor who will conduct audit as assigned; to have the power to disengage the auditor who fails to accomplish the tasks.
  7. Consider the Company’s disclosure in the event of party-related transactions or those potentially with conflicts of interests to ensure accuracy and completeness and consider approving such transactions for further proposing to the Board’s and/or shareholders’ meeting.
  8. Carry out anything else as designated by the Board of Directors and agreed to by the Audit Committee, such as review of financial management and risk management, review of adherence by executives to the Code of Conduct, joint review with the management of important reports legally required to be presented to the public such as executive reports and analysis, etc.
  9. Produce and disclose an Audit Committee activity report in the Company’s annual report, which is signed by the Chairman of Audit Committee and should consist of the following particulars:
    • Opinion toward the accuracy, completeness and reliability of the production process and disclosure of financial reports.
    • Opinion toward the adequacy of the internal control.
    • Decent reason justifying the appointment of the auditor for another term.
    • Opinion toward compliance with the law on securities and stock exchange, Stock Exchange requirements, and laws related to Company business.
  10. Any other reports that in its opinion should be known by the shareholders and general investors, under the scope of duties and responsibilities assigned by the Board of Directors.
  11. Report the Audit Committee’s performance to the Board of Directors at least 4 times a year.
  12. Arrange a meeting between the Audit Committee and the external auditor at least 4 times a year.

Quorum of the meeting of the board of Audit Committee to pass a resolution

The policy of the company is that the resolution of the board of Audit Committee is required to be passed by the meeting of the board of Audit Committee attended by at least two-thirds of the total directors.

5.3.2 The Recruitment and Compensation Committee

The Duty and Authority of the Recruitment and Compensation Committee

  1. Review and establish qualification and recruit individuals for the positions of
    • company director and submit to the Board for appointment consideration at the General Shareholders’ Meeting
    • executive committee member and submit to the Board for appointment consideration
  2. Establish criteria for compensation to directors, managing director, and submit to the Board for approval consideration at the General Shareholders’ Meeting
  3. Conduct other matters as assigned by the Board of Directors.
  4. To recruit and select the persons to become the directors and chairman of the executives at the expiry of the term or when there is any vacancy or the other executive post assigned by the board of directors.
  5. To provide recommendation on method to evaluate the performance of the directors and the board of directors to the board of directors.
  6. To review and suggest any correction to scope, duty and responsibility of the recruitment committee in compliance with the conditions.
  7. Other works assigned by the board of directors.

Quorum of the meeting of the board of The Recruitment and Compensation Committee to pass a resolution

The policy of the company is that the resolution of the board of The Recruitment and Compensation Committee is required to be passed by the meeting of the board of The Recruitment and Compensation Committee attended by at least two-thirds of the total directors.

Directors with diversity of background

The Selection Committee is required to arrange the requirements on selection of the directors and to determine the procedure related to diversity of the other qualifications of the entire board such as directors from various group of stakeholders and educational background, age, gender, etc.

In addition, the Selection Committee will look into the schedule of the directors whose term is about to expire to determine the skill and competency that the new directors recruited should have to replace the missing skill and competency. There are three categories of competency.

  1. Knowledge directly involving with construction business, construction business background and engineering education
  2. Knowledge and experience related with construction business, organization management, human resource management and administration in government agencies.
  3. Specific knowledge and experience such as related laws, rules and regulations related to the business undertaken, accounting and finance, understanding in financial statements, accounting standards or being an audit committee of the listed company and knowledge in communication and information technology.

Orientation for new directors

The director who is newly appointed a director of the company will be provided with an orientation for new directors to provide information on duties and businesses of the company, introduction to duties of each executive and rules and regulations, requirements of SEC and other related laws.

5.3.3 Risk management committee

The Board of Directors has made the appointment of a new set of risk management Committee in accordance with the Board of Directors meeting No. 5/2011 date November 11, 2011 policy risk management in the administration of the company, in accordance with management policies and corporate strategies, including assessment of the risks that may arise, to report to the Board of Directors.

The Duty and Authority of the risk management committee

Corporate governance

  1. To determine policies and to arrange corporate governance manual of the company and to prepare the business ethics manual for submission to the board of directors for approval on practice by every level of the employees.
  2. To supervise strict and continuous compliance with corporate governance manual and business ethics manual.
  3. To make an assessment and review related to policies, directions, guidelines or practices on international corporate governance.
  4. To monitor movement, trend and comparison with leading companies on good corporate governance for better improvement.
  5. To provide suggestion to the company, the board of directors, the management and working group on matters related to good corporate governance.
  6. To prepare and submit a report on compliance with the good corporate governance policy to the board of directors immediately on matters with significant impacts on the company.
  7. Disclosure on information related to good corporate governance in the website of the company and the annual report to all stakeholders for acknowledgement.

Risk

  1. To formulate a policy on risk management covering various risk management for consideration by the board of directors
  2. To follow up the risk management since the commencement of the process to identify the risk and to analyze, assess, monitor and report the risk management systematically
  3. To advise internal units in the organization with the risk management process and to monitor and assess the outcome consistently
  4. To prepare a report to the audit committee on the improvements needed in compliance with the policy and strategy of the company

Quorum of the meeting of the board of the risk management committee to pass a resolution

The policy of the company is that the resolution of the board of the risk management committee is required to be passed by the meeting of the board of the risk management committee attended by at least two-thirds of the total directors.

5.3.4 Social responsibility and sustainable development Committee

Roles, duties of the committee on social responsibility and sustainable development

  1. To arrange and submit the policy and tendency of social responsibility and sustainable development to the board of directors of the company for approval.
  2. To provide assistance to the work on social responsibility and sustainable development with attendance to the meeting and guidelines on the operations and periodic monitoring with the time frame provided.
  3. To screen the operating plan, annual budget and inquire about the performance on social responsibility and to make a report to the board of directors.
  4. To examine and assess the performance on social responsibility and sustainable development and provide recommendations for development and report to the board of directors at least once a year on sustainable development with disclosure to the public.
  5. To appoint a subcommittee on social responsibility and sustainable development as deemed suitable.

5.4 Company Secretary

Roles, Duties and Responsibilities of the company secretary

  1. To advise the directors on legal matters, related rules and regulations.
  2. To ensure that the company complies with the law, articles of association, regulations and good governance practice.
  3. To hold meetings as required by law and articles of association; to make and keep director registration, invitations to Board Meetings, annual reports, invitations to shareholders meetings and minutes of shareholders meetings; to ensure compliance with the resolutions of Board Meetings and Shareholders Meetings.
  4. To ensure disclosure of information to regulatory agencies.
  5. To contact and communicate with shareholders and regulatory agencies concerned.
  6. To provide information on training courses for directors for the benefit of their duty performance.
  7. To perform other duties assigned by the Board of Directors.

Ensuring compliance with and revision

The company Board shall supervise for the director’s, executives’ and staff’s compliances with the good practices specified in the corporate governance handbook for continuous operations control quality upgrading and development to ensure stability and sustenance of the entity, shareholders and stakeholders for all.

As determined by the Company Board and the audit and corporate governance committee the corporate governance handbook will be reviewed annually.

Sources/ References

  1. The Principles of Good Corporate Governance for Listed Companies 2006: The development of corporate governance, The Stock Exchange of Thailand
  2. The Securities and Exchange Commission ACT(No.4)B.E.2008
  3. The Securities and Exchange Commission ACT(No.5)B.E.2016
  4. The Code of Best Practice for Directors of Listed Companies: The Stock Exchange of Thailand.
  5. Report on Corporate Governance : The Stock Exchange of Thailand
  6. Director’s Handbook : The securities and Exchange commission
  7. The Criteria for evaluating the status of corporate governance : The Thai Institute of Directors Association
  8. The Roles, Duties and Responsibilities of the Director of Listed Companies : DCP Program : Thai Institute of Directors
  9. OECD Principles of Corporate Governance: Organization for Economic Cooperation and Development.