Corporate Governance Board and Board Committees The NC recommends for the Board’s approval the process and objective performance criteria, and undertakes an annual evaluation of the effectiveness of the Board and Board Committees, facilitated by an independent external consultant. The consultant engaged for the FY 2024 review, Aon, is independent of and is not related to the Company or any of its Directors. As part of the process, the consultant sends questionnaires to the Directors and interviews are conducted where necessary. In addition to numerically scored multiple-choice items, the questionnaires use open-ended questions to solicit qualitative or strategic input. The findings are evaluated by the consultant and reported, together with recommendations, to the NC and thereafter the Board. The evaluation categories covered in the questionnaire for FY 2024 included Board Composition, Information Management, Board Processes, Representation of ESG, Managing Company’s Performance, Human Capital Management, Director Development and Management, Risk Management and Board Committee Effectiveness. The Senior Management team also provides feedback on areas including Board Composition and Board Committee Effectiveness, Information Management, Developing Strategy, Monitoring the Strategy, Working with Management and Managing Risks. The consultant’s findings and recommendations, including benchmarking information and best practices of other boards, are considered by the Board and follow-up action is taken, where necessary. The evaluation process for FY 2024 found that the Board has been functioning well as a team with each of the Board members contributing to Board deliberations. It was found that the level of engagement amongst Board members was satisfactory and there was openness and rigour in Board discussions. The different members and committees of the Board work well together, and Board members and Management are respectful of each other and able to reach consensus amicably. Board Committees were also assessed to work well with thorough robust debate, a good understanding of the issues and functional knowledge. There are no concerns or issues affecting any Board or Board Committee requiring attention or follow-up work. Individual Directors A formal evaluation of individual Directors is conducted annually. For FY 2024, the Board Chairman and NC Chairman jointly evaluated each Director using an agreed evaluation framework, with the process and objective performance criteria recommended by the NC and approved by the Board, which criteria included Director’s duties, contributions and conduct. Feedback was also sought from selected Senior Management members. The NC Chairman held one-to-one conversations with each Director to discuss strengths and opportunities. The outcome of the FY 2024 individual Director evaluation is that every Director contributes to Board deliberations. Each of them participates actively and is fully engaged in Board deliberations. Additionally, Directors work well with one another, and with Management, contributing to the overall smooth functioning of the Board. Deliberations at meetings were open, constructive and robust. Management has also provided positive feedback on the performance and contributions of the individual Directors, noting that the relationship between the Board and Management is healthy and good. Directors are also generally accessible to Management outside the formal environment of Board and/ or Board Committee meetings. As with the Board and Board Committee evaluations, there are no concerns or issues affecting any Director requiring attention or follow-up work. The Board believes that performance evaluation should be an ongoing process and seeks feedback on a regular basis. The regular interactions among Board members, and between Board members and Management, also contribute to this ongoing process. Through such engagement, the Board benefits from an understanding of shared norms between Board members which contributes to a positive Board culture. REMUNERATION MATTERS Principles 6, 7 And 8: Procedures for Developing Remuneration Policies, Level and Mix of Remuneration, and Disclosure on Remuneration The Board, assisted by the ERCC, has in place a formal policy and transparent procedures for developing policies on Director and executive remuneration, recommending Directors’ remuneration for shareholders’ approval and determining the remuneration of key management personnel (KMP). All ERCC members are non-executive Directors, the majority of whom (including the ERCC Chairman) are independent Directors. In FY 2024, the ERCC met three times. 60 CapitaLand Investment Limited Under the ERCC’s terms of reference, its key responsibilities are: (1) to oversee the Company’s leadership development and succession planning for the Group CEO and KMP. The ERCC reviews the succession plan for these KMP on an annual basis, and presents its recommendations on the strategic talent pipeline to the Board. Potential leadership candidates are identified across different talent segments based on immediate, medium and long-term readiness, to ensure sustainable business growth and continuity; and (2) to review and recommend to the Board a framework of remuneration for the Board and KMP, and to oversee the administration of the Company’s share plans. The Board sets the remuneration policies in line with the Company’s business strategy and approves the executive compensation framework based on the key principle of linking pay to performance. Pay-for-performance is emphasised by linking remuneration to the achievement of business and individual goals and objectives, factoring in industry practices and norms in compensation to ensure market competitiveness and fairness. The ERCC approves the specific remuneration package for each KMP, and recommends to the Board (a) for endorsement, the specific remuneration package for each Director, and (b) for approval, the specific remuneration package for the Group CEO. In its deliberations, the ERCC considers all aspects of remuneration, including termination terms, to ensure they are fair. For FY 2024, the ERCC appointed an independent remuneration consultant, Willis Towers Watson (WTW), to provide professional advice on Director and executive remuneration, comparing, among other factors, the reasonableness of compensation levels against the performance achieved, and the competitiveness of compensation levels against relevant industry peers, global compensation trends and practices. WTW is not related to the Company or any Director and does not have any relationship(s) with the Company that could affect its independence and objectivity. Remuneration Policy for Group CEO and KMP The remuneration policy for the Group CEO and KMP is designed to support the implementation of the Group’s strategy, facilitate the sustained performance and value creation of the Company, and deliver sustainable returns to shareholders. The policy has four key principles: (1) Business Alignment: The Company creates sustainable value and drives returns above the risk-adjusted cost of capital to align with the long-term interests of its stakeholders, while providing sound and structured funding to ensure affordability and cost-effectiveness in line with performance goals. The Company also enhances the retention of key talents to build strong organisational capabilities as well as strengthens alignment to ESG practices. (2) Fair and Appropriate: The Company ensures competitive remuneration relative to the appropriate external talent markets and manages its internal stakeholders such that remuneration is viewed as fair across the Group. A significant but appropriate portion of the remuneration is at risk, which is symmetric with risk outcomes and sensitive to risk time horizon, while aligned with the risk policies of the Group. (3) Motivate the Right Behaviour: The Company adopts a pay-for-performance principle. Rewards are aligned, differentiated and balanced using multiple dimensions of performance. Strong and clear line-of-sight linking rewards and performance are established to drive superior outcomes. It also strives to foster Group-wide interests and leverage on the synergies of the various businesses of the Group. (4) Effective Implementation: The Company maintains rigorous corporate governance standards, and exercises appropriate flexibility to meet strategic business needs and practical implementation considerations. The Company also strives to facilitate employee understanding to maximise the value of the remuneration programmes. Remuneration Framework for Group CEO and KMP The remuneration framework for the Group CEO and KMP is designed to attract, retain and motivate them to successfully manage the Company for the long-term. A significant and appropriate proportion of their total remuneration is in the form of variable compensation, awarded in a combination of short-term, deferred and long-term incentives, with an emphasis on linking pay to corporate and individual performance. This ensures alignment of their interests with those of the Company’s shareholders and other stakeholders and promotes the long-term success of the Company. 61 Annual Report 2024
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