Singapore Airlines 2007 Annual Report Download - page 39

Singapore Airlines 37 Annual Report 2006-07
CORPORATE GOVERNANCE REPORT
For the period 1 April 2006 to 31 March 2007
Board Nominating Committee (NC) (continued)
The NC’s functions include considering and making recommendations to the Board concerning the appointment and
re-election of Directors, and determining the independence of the Directors. The NC’s recommendations are based on
a review of the range of expertise, skills and attributes of current Board members and the needs of the Board, taking
into account the Company’s future business direction, the tenure of service, contribution and commitment of each Board
member. Board rejuvenation is a guiding principle in determining the need for new appointees to the Board. Reviews of
Board performance are undertaken on an informal basis.
The Company’s Articles of Association provide that one-third of the Directors for the time being, or, if their number is
not three or a multiple of three, then the number nearest to but not less than one-third are required to retire from offi ce.
Retiring Directors are selected on the basis of those who have been longest in offi ce since their last re-election, failing
which they shall be selected by agreement or by lot. New Directors appointed in the year are subject to retirement and
re-election by shareholders at the next Annual General Meeting after their appointment. All new appointments and
re-elections require the approval of the Special Member, the Minister for Finance (Incorporated).
Board Compensation and Industrial Relations Committee (BCIRC)
The BCIRC comprised Mr Stephen Lee (Chairman), Sir Brian Pitman, Mr James Koh (appointed on 14 August 2006),
Mr David Michael Gonski (appointed on 14 August 2006) and Mr Fock Siew Wah (until 31 July 2006). All members of
the Committee are non-executive directors. Although Mr Stephen Lee is not considered independent under the Code of
Corporate Governance, by virtue of his position as a member of the Temasek Advisory Panel; the Nominating Committee
is of the view that Mr Lee, being a non-executive Chairman, is able to discern independently and detach himself from the
Management in deciding on remuneration issues.
The BCIRC has been delegated the authority by the Board to review and approve recommendations on remuneration
policies and packages for key executives, and administer the Company’s Restricted Share Plan and Performance Share
Plan for key senior executives and the Company’s Employee Share Option Plan. The award of shares to senior executives
is based on their individual contribution and performance. The BCIRC has access to professional advice from external
advisors as and when it deems necessary.
The BCIRC also ensures that there are suffi cient candidates recruited and/or promoted to leadership positions, which
include monitoring the leadership development programme. The BCIRC ensures that talent is tapped and equitably
distributed throughout the SIA Group of companies, and encourages closer working relationship and management
exchanges within the Group.
The BCIRC also seeks to drive the building of mutual trust and confi dence between Management and the unions. It
directs the improvement of work practices to increase labour fl exibility and optimize the usage of manpower, and
oversees the development of a performance-linked reward system. A strong management-union partnership will be
mutually benefi cial resulting in greater competitiveness for the Company.
Access to Information (Principle 6)
The Directors are provided with Board Papers well in advance before each Board Meeting, to enable them to be properly
informed of matters to be discussed and/or approved. Board Papers contain both regular items such as reports on
its subsidiaries and associated companies, updates on business development, monthly management accounts, and
productivity and performance indicators, as well as matters for the decision or information of the Board.
Directors have separate and independent access to Senior Management and the Company Secretary at all times. Directors
can seek independent professional advice if required. Such costs will be borne by the Company.
Remuneration Matters (Principles 7, 8 and 9)
The Board is proposing an increase in the retainers to be paid to Directors and Committee members, to bring the current
fee structure in line with the market rate for Directors of large global companies with international Directors. In addition,
the Board is proposing that attendance fees be paid for all Directors to compensate them for the time and opportunity
costs incurred, particularly for foreign Directors, to attend Board meetings.