Vtech 2016 Annual Report Download - page 37

Corporate Governance Report
33VTech Holdings Limited Annual Report 2016
Corporate Governance Practices
VTech Holdings Limited is incorporated in Bermuda and has its
shares listed on the Stock Exchange. The corporate governance
rules applicable to the Company are the Corporate Governance
Code (the “Code”) set out in Appendix 14 to the Listing Rules.
Throughout the year ended 31 March 2016, 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 deviations from code provisions A.2.1 and A.6.7 of the Code as
described below.
Under code provision A.2.1 of the Code, the roles of chairman and
chief executive 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 O cer. The Board
considers that this structure will not impair the balance of power
and authority between the Board and the management of the
Company and its subsidiaries (the “Group”) as independent non-
executive directors form the majority of the Board, with four out
of seven of the directors of the Company (the “Directors”) being
independent non-executive Directors. The Board believes the
appointment of Dr. Allan WONG Chi Yun to the combined role of
Chairman and Group Chief Executive O cer is bene cial to the
Group as he has considerable industry experience.
Under code provision A.6.7 of the Code, independent non-
executive directors should attend general meetings and develop
a balanced understanding of the views of shareholders. Dr. Patrick
WANG Shui Chung was unable to attend the annual general
meeting of the Company held on 15 July 2015 due to his other
prior business engagement. However, the Board believes that the
presence of other independent non-executive Directors at such
general meetings has allowed the Board to develop a balanced
understanding of the views of shareholders.
In May 2015, the charters of the Audit Committee and the Risk
Management and Sustainability Committee were updated to
incorporate the new code provisions in the revised Code relating
to the risk management and internal control e ective from
1 January 2016.
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 four
independent non-executive Directors. The independent non-
executive Directors are executives of high calibre with diversi ed
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 human resources
management through their contribution at Board meetings. In
addition, the Directors disclose to the Company the number and
nature of o ces held in public companies or organizations and
other signi cant commitments with an indication of the time
involved annually. Their names and brief biographies are set out on
page 38 of this Annual Report.
Appointment and Re-election of Directors
All Directors are appointed for a speci c term of three years and 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 o ce until the next annual general
meeting and thereafter the same Director, if re-elected, shall be
subject to retirement by rotation. There exists no relationship
among Board members and senior management, including
 nancial, operational, family or other relevant material relations.
Independence of Independent Non-executive
Directors
The Board has received from each independent non-executive
Director a written annual con rmation of independence pursuant
to Rule 3.13 of the Listing Rules. The Board considers that the four
independent 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.
Any further reappointment of an independent non-executive
Director who has served the Board for more than nine years will be
subject to separate resolution to be approved by shareholders.
Roles and Responsibilities of the Board
The Board’s focus is on the formulation of business strategy and
policy, and control. Matters reserved for the Board are those
a ecting the Company’s overall strategic policies,  nances and
shareholders. These include, but are not restricted to, deliberation
of business plans, risk management, internal control, preliminary
announcements of interim and  nal results, dividend policy, 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 speci cally delegated to the management, specifying matters
which require approval by the Board.
Four Board meetings at approximately quarterly intervals are
scheduled with other meetings held as required. All Directors have
access to the advice and services of the company secretary of the
Company (the “Company Secretary”) and independent professional
advice may be sought by the Directors if required.
The attendance of individual Directors at Board Meetings (BM),
Audit Committee Meetings (ACM), Nomination Committee
Meeting (NCM), Remuneration Committee Meetings (RCM), Risk
Management and Sustainability Committee Meetings (RMSCM)
and Annual General Meeting (AGM) during the  nancial year is set
out below:
Meetings attended/Eligible to attend
Directors BM ACM NCM RCM RMSCM AGM
Executive Directors
Allan WONG Chi Yun (Chairman) 5/5 – 1/1 – 2/2 1/1
PANG King Fai 5/5 – – – 2/2 1/1
Andy LEUNG Hon Kwong 5/5 – – – 2/2 1/1
Independent Non-executive Directors
William FUNG Kwok Lun 4/5 1/2 1/1 2/2 – 1/1
Michael TIEN Puk Sun 5/5 2/2 1/1 1/2 – 1/1
Patrick WANG Shui Chung 3/5 – 1/1 – – 0/1
WONG Kai Man 5/5 2/2 1/1 2/2 2/2 1/1
In addition to the regular Board meetings, the Chairman had
meetings with the independent non-executive Directors without
the presence of the executive Directors during the  nancial year.