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FRENCKEN GROUP LIMITED
ANNUAL REPORT 2014
CORPORATE GOVERNANCE STATEMENT
(CONT’D)
BOARD COMPOSITION AND GUIDANCE
Principle 2 There should be a strong and independent element on the Board, which is able to exercise
objective judgement on corporate affairs independently, in particular, from Management and 10%
shareholders. No individual or small group of individuals should be allowed to dominate the Board’s
decision making.
The Independent Directors form at least one third of the Board composition. The independence of each director is reviewed
by the Nominating Committee. The Nominating Committee adopts the 2012 Code definition of what constitutes an
Independent Director in its review. As the Chairman is not an Independent Director, the Nominating Committee is reviewing
the composition of Independent Directors on the Board and targeting to increase the independent element to comply with
the requirements of the Code.
Policy on the independence of Independent Directors
The Company is committed to have a strong independent element on the Board and has adopted a policy and established
a process to obtain and maintain the requisite degree of independent representation for good and sound governance. As
prescribed by the policy, the process:
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Establishes the methodology the Board shall use to assess the independence of each Independent Director bearing in
mind the definition of independence in the Code;
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Identifies the information that shall be collected from each Independent Director to make the assessment of
independence; and
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Fixes the elements of disclosure to shareholders with regard to the assessment to be made, including the disclosure of
any relationships and associations that may be perceived to affect the independence or objectivity of an Independent
Director.
The process requires the Nominating Committee to make a formal assessment and report to the Board their findings
as to whether the Independent Directors are independent of management and independent in character and judgment
and whether there are any business or other relationships that could materially affect or interfere with the exercise of
objective, unfettered or independent judgment by the Independent Director or the Independent Director’s ability to fulfill
their mandate and duties. The Board’s rigorous review of the process is an important element in this process. The key
features of the process are briefly set out below.
On an annual basis, the Nominating Committee shall require each Independent Director to complete, confirm and sign a
Confirmation of Independence, the content and form of which has been approved. Each declaration shall be reviewed by the
other members of the Nominating Committee. This forms the basis of the assessment. All relevant facts and circumstances
shall be considered in making the assessment. Generally (but without limiting the scope of the factors which may be taken
into account), in accordance with the Code, independence is, prima facie, established if the criteria set out below is met.
A Director is independent if he or she:
(a) is not employed by the Company or any of its related corporations for the current or any of the past three financial
years;
(b) does not have close family ties to an executive director of the Company or any of its related corporations;
(c) does not have an immediate family member who is, or has been in any of the past three financial years, employed by
the Company or any of its related corporations whose remuneration is determined by the Remuneration Committee;
(d) does not accept any compensation from the Company or any of its related corporations other than compensation for
board service for the current or immediate past financial year;
