Singapore Airlines 2008 Annual Report Download - page 42

Singapore Airlines Annual Report 2007-08
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CORPORATE GOVERNANCE REPORT
For the period 1 April 2007 to 31 March 2008
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 office. Retiring Directors
are selected on the basis of those who have been longest in office 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 and Mr David Michael Gonski. 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 EVA-based Incentive Plan, Performance Share Plan and
Restricted Share Plan for key senior executives and the Company’s Employee Share Option Plan. The award of shares to senior
executives is based on organizational and individual performance. In developing, administering and maintaining the reward
programmes, the BCIRC has access to professional advice from external advisors as and when it deems necessary.
The BCIRC also reviews leadership development programmes and ensures that there are sufficient candidates recruited and/or
promoted to leadership positions. The BCIRC ensures that talent is tapped and equitably distributed throughout the SIA Group
of companies, and encourages close working relationship and management exchanges within the Group.
The BCIRC also seeks to drive the building of mutual trust and confidence between Management and the unions. It directs
the improvement of work practices to increase labour flexibility and optimize the usage of manpower, and oversees the
development of a performance-linked reward system. A strong management-union partnership will be mutually beneficial
resulting in greater competitiveness for the Company.
Access to Information (Principle 6)
The Directors are provided with Board Papers 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.