Vtech 2011 Annual Report Download - page 26

Corporate Governance Report
24 VTech Holdings Ltd Annual Report 2011
Corporate Governance Practices
VTech Holdings Limited is incorporated in Bermuda and has its
shares listed on The Stock Exchange of Hong Kong Limited
(the “Stock Exchange”). The corporate governance rules
applicable to the Company are the Code on Corporate
Governance Practices (the “Code”) as set out in Appendix 14
to the Rules Governing the Listing of Securities on the
Stock Exchange (the “Listing Rules”). Throughout the year ended
31 March 2011, the Company has complied with all the code
provisions of the Code and to a large extent, the recommended
best practices in the Code except for the deviation from code
provision A.2.1 of the Code as described below.
Under code provision A.2.1 of the Code, the roles of chairman
and chief executive officer should be separate and should not
be performed by the same individual. Dr. Allan WONG Chi Yun
has the combined role of Chairman and Group Chief Executive
Officer. The Board considers that this structure will not impair
the balance of power and authority between the Board and the
management of the Group as the non-executive directors form
the majority of the Board, with five out of eight of our directors
being independent non-executive directors. The Board believes
the appointment of Dr. Allan WONG Chi Yun to the posts of
Chairman and Group Chief Executive Officer is beneficial to the
Group as he has considerable industry experience.
The key corporate governance principles and practices of the
Company are set out below.
Board of Directors
The Board currently comprises three executive directors and
five independent non-executive directors. Their names and
brief biographies are set out on page 27 of this Annual Report.
The non-executive directors are high calibre executives with
diversified industry expertise and bring a wide range of skills
and experience to the Group. They bring to the Company
independent judgement on issues of strategy, performance,
risk and people through their contribution at Board meetings.
The Board considers that the five non-executive directors, being
the majority of the Board, are independent in character and
judgement and they also meet the independence criteria set out
in Rule 3.13 of the Listing Rules. All non-executive directors are
appointed for a specific term of three years and all directors are
required to submit themselves for re-election at least once every
three years under the Company’s Bye-laws. In accordance with
the Company’s Bye-laws, each new director appointed by the
Board during the year shall hold office until the next following
annual general meeting and thereafter the same director, if
re-elected, will be subject to retirement by rotation. There exists
no relationship among Board members, including financial,
operational, family or other relevant material relations.
The Board has received from each independent non-executive
director a written annual confirmation of independence pursuant
to Rule 3.13 of the Listing Rules.
The Board’s focus is on the formulation of business strategy and
policy, and control. Matters reserved for the Board are those
affecting the Company’s overall strategic policies, finances and
shareholders. These include, but are not restricted to, deliberation
of business plans, risk management, internal controls, preliminary
announcements of interim and final results, dividend policy,
the annual budgets, major corporate activities such as material
acquisitions and disposals, and connected transactions.
The Board may delegate part of its functions and duties to
executive committees and day-to-day operational responsibilities
are specifically delegated to the management, specifying matters
which require approval by the Board.
Four Board meetings at approximately quarterly intervals are
scheduled for 2011/12 with other meetings held as required. All
directors have access to the advice and services of the Company
Secretary and independent professional advice may be sought by
the directors if required.
The attendance of individual members of the Board and other
Board Committees during the financial year ended 31 March 2011
is set out below:
Meetings attended/Eligible to attend
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Risk
Management
Committee
Executive Directors
Allan WONG Chi Yun 4/4 – – 1/1 2/2
PANG King Fai 4/4 – – – 2/2
Andy LEUNG Hon Kwong 4/4 – – – 2/2
Independent Non-executive Directors
William FUNG Kwok Lun 4/4 2/2 1/1 1/1 –
Denis Morgie HO Pak Cho 3/4 1/2 1/1 1/1 –
David SUN Tak Kei
(appointed on 25 January 2011)
1/1 – 1/1 – –
Michael TIEN Puk Sun 3/4 2/2 1/1 1/1 –
Patrick WANG Shui Chung 4/4 1/1 * – 1/1 –
* ceased to be a member of the Audit Committee on 25 January 2011
Board Committees
The Board has established a Remuneration Committee, a
Nomination Committee, an Audit Committee and a Risk
Management Committee with defined terms of reference which
are no less exacting than those set out in the Code.
Dr. David SUN Tak Kei was appointed as an independent
non-executive director, member of the Audit Committee, the
Remuneration Committee, and the Nomination Committee of
the Company, while Dr. Patrick WANG Shui Chung ceased to
be a member of the Audit Committee of the Company both
with effect from 25 January 2011. Dr. David SUN Tak Kei was also
appointed as a member of the Risk Management Committee on
30 March 2011.