20 เมษายน 2560
รายงานความคืบหน้าของคณะกรรมการบรรษัทภิบาลเครือเจริญโภคภัณฑ์
เรียน ท่านผู้มีส่วนได้ส่วนเสีย (Stakeholders)
 
ตามที่เครือเจริญโภคภัณฑ์ได้ประกาศนโยบายขับเคลื่อนด้านบรรษัทภิบาลหรือการกำกับดูแลกิจการไว้เมื่อปีที่ผ่านมา ผมขอรายงานความคืบหน้าของกระบวนการดังกล่าวไปพร้อมกับเรื่องการสืบทอด ตำแหน่งผู้บริหารระดับสูง เพราะทั้งสองเรื่องนี้มีความเชื่อมโยงกันอย่างใกล้ชิด และผมต้องการให้ ผู้มีส่วนได้ส่วนเสียของเรามั่นใจได้ว่า ผู้นำองค์กรของเราจะดำเนินกิจการอย่างมีความรับผิดชอบและสร้างความเจริญรุ่งเรืองได้เฉกเช่นเดียวกับผู้นำรุ่นก่อนที่สร้างประวัติศาสตร์การเติบโตให้กับธุรกิจ ของเครือเจริญโภคภัณฑ์
 
เป้าหมายของเรามีความชัดเจน คือ เราต้องการให้การเปลี่ยนผ่านผู้นำองค์กรประสบความสำเร็จ ควบคู่ไปกับการดำเนินงานด้านกำกับดูแลกิจการที่ได้มาตรฐานชั้นนำระดับโลก อันจะนำไปสู่ การเติบโตทางธุรกิจอย่างยั่งยืนในระยะยาว
 
ความคืบหน้าในการขับเคลื่อนนโยบายบรรษัทภิบาล
 
เพื่อยกระดับบรรษัทภิบาลของเครือเจริญโภคภัณฑ์ให้เข้มแข็งทั้งองค์กรตามมาตรฐานด้านการกำกับดูแลกิจการที่ดีในระดับสากล เราได้วางโครงสร้างการกำกับดูแลที่มีคุณภาพสูง มีการพัฒนานโยบาย และหลักการที่สามารถนำไปสู่การปฏิบัติได้อย่างชัดเจน เพื่อให้แน่ใจได้ว่าพนักงานทุกคนเข้าใจ และเห็นความสำคัญของความเปลี่ยนแปลงที่กำลังเกิดขึ้นจากนโยบายใหม่นี้ ดังนั้น เราจึงได้วาง โครงสร้างการกำกับดูแลกิจการด้านบรรษัทภิบาลของเครือเจริญโภคภัณฑ์ซึ่งเป็นบริษัทแม่ (Holding Company) ให้ครอบคลุมและแผ่ขยายไปยังกลุ่มบริษัทในเครือฯ สอดคล้องกับแนวปฏิบัติที่เป็นเลิศ ในระดับโลก
 
ในการก้าวไปสู่เป้าหมาย เราตระหนักถึงความจำเป็นที่ผู้นำของเราควรได้รับคำแนะนำจาก คณะที่ปรึกษา ผู้ทรงคุณวุฒิและมีอิสระทางความคิด ดังนั้น เมื่อเดือนกันยายน 2559 ที่ผ่านมา เราจึงได้จัดตั้งคณะกรรมการด้านบรรษัทภิบาลขึ้น นำโดยท่านประธานอาวุโสธนินท์ เจียรวนนท์ และผู้บริหารระดับสูงจากบริษัทในเครือเจริญโภคภัณฑ์ ที่จดทะเบียนในตลาดหลักทรัพย์ แห่งประเทศไทย ตลอดจนกรรมการอิสระที่ไม่ได้เป็นผู้บริหารองค์กรแต่เป็นกรรมการในคณะกรรมการ บริหารของบริษัทในเครือฯ ที่จดทะเบียนในตลาดหลักทรัพย์ฯ และกรรมการอิสระที่เป็นผู้เชี่ยวชาญ ด้านการกำกับดูแลกิจการทั้งในและต่างประเทศ
 
ทั้งนี้ ที่ผ่านมา คณะกรรมการด้านบรรษัทภิบาลเครือเจริญโภคภัณฑ์ ได้ทุ่มเท และเอาใจใส่ ต่อการขับเคลื่อนการกำกับดูแลกิจการที่ดีของเครือฯ โดยนับตั้งแต่ก่อตั้ง ได้จัดการประชุมไปแล้ว 3 ครั้ง  ซึ่งคณะกรรมการฯ ได้รับเกียรติจากบุคลากรชั้นนำทางธุรกิจทั้งในและต่างประเทศ ที่มีประสบการณ์สูง เข้ามาช่วยเครือเจริญโภคภัณฑ์ขับเคลื่อนการกำกับดูแลกิจการ ทั้งด้านโครงสร้าง หลักการและนโยบาย
 
พร้อมกันนี้ได้แนบรายงานความคืบหน้าของการดำเนินงานด้านบรรษัทภิบาลของเครือเจริญโภคภัณฑ์มาให้ท่านพิจารณา โดยมีสาระสำคัญ ดังนี้

1) กระบวนการเปรียบเทียบและทบทวน ในช่วง 2 ปีแรกของการทำงาน คณะกรรมการด้านบรรษัทภิบาลได้มีมติที่จะ ทบทวนบรรษัทภิบาลในด้านต่าง ๆ รวมทั้งการประเมินจุดอ่อนจุดแข็งทั้งในระดับ
เครือเจริญโภคภัณฑ์ และบริษัทในเครือฯ โดยเริ่มต้นจากการพิจารณาเรื่องการเปิดเผย ข้อมูลและความโปร่งใส และขณะนี้ ได้เริ่มพิจารณาด้านการกำกับดูแลความเสี่ยงแล้ว
 
2) ยกระดับแนวปฏิบัติสู่นโยบายอย่างเป็นรูปธรรม   หลังจากที่ได้ทบทวนเรื่องการเปิดเผยข้อมูลและความโปร่งใส ก็ได้มีการพัฒนาเพื่อยกระดับ มาตรฐาน นโยบาย แนวทางและคู่มือปฏิบัติของเครือเจริญโภคภัณฑ์ที่เป็นบริษัทแม่ โดยในระหว่างนี้ ยังอยู่ในช่วงการนำระบบใหม่และกระบวนการที่กำหนดไว้มาใช้กับ บริษัทที่ไม่ได้จดทะเบียนในเครือฯ ให้เป็นแนวทางเดียวกับมาตรฐานที่ดีของบริษัท ที่จดทะเบียนในตลาดหลักทรัพย์ฯ 

3) การพัฒนาหลักการบรรษัทภิบาลของเครือเจริญโภคภัณฑ์
คณะกรรมการฯ มีมติกำหนดหลักการด้านการกำกับดูแลกิจการรวม 11 ประการ โดยมี รายละเอียดปรากฏอยู่ในรายงานความคืบหน้าฉบับเต็ม ซึ่งจะต้องนำมาใช้ภายใน
เครือเจริญโภคภัณฑ์อย่างเต็มรูปแบบ เพื่อเป็นแนวทางในการปฏิบัติของเราเอง และเป็น แนวทางให้แก่บริษัทที่เราไปลงทุน                                                               

4) การฝึกอบรม และการเปลี่ยนแนวความคิด      เรากำลังพัฒนาและเตรียมจัดโครงการอบรมด้านการกำกับดูแลกิจการ โดยคาดว่าจะเริ่ม อบรมผู้บริหารอาวุโสเป็นกลุ่มแรกได้ในไตรมาสถัดไป  มุ่งเน้นไปที่หลักการบรรษัทภิบาล
2 หัวข้อ คือ (1) การเปิดเผยข้อมูลและความโปร่งใส และ (2) การดำเนินธุรกรรม
ที่เกี่ยวโยงกัน นอกจากนี้ เราวางแผนที่จะขยายการอบรมให้ครอบคลุมทั่วทั้งบริษัท ในเครือฯ ภายในระยะเวลา 12 เดือนจากนี้ไป  โดยได้รับการสนับสนุนจากสถาบันพัฒนา ผู้นำเครือเจริญโภคภัณฑ์ และที่ปรึกษาจากภายนอก รวมถึงการรณรงค์เรื่องการสื่อสาร ภายในองค์กร โดยการฝึกอบรมนี้จะช่วยให้พนักงานมีความเข้าใจเรื่องการกำกับดูแลกิจการ และปฏิบัติไปในทิศทางเดียวกันกับหลักการที่เครือเจริญโภคภัณฑ์ได้กำหนดไว้ 

กิจกรรมการดำเนินงานเรื่องการกำกับดูแลกิจการของเครือเจริญโภคภัณฑ์ ได้สร้างความเปลี่ยนแปลง ที่เป็นรูปธรรมในเชิงบวกแล้วแก่บริษัทในเครือฯ ที่จดทะเบียนในตลาดหลักทรัพย์ฯ ได้แก่ บริษัท เจริญโภคภัณฑ์อาหาร จำกัด (มหาชน) บริษัท ซีพี ออลล์ จำกัด (มหาชน) และบริษัท สยามแม็คโคร จำกัด (มหาชน) ซึ่งได้จัดตั้งคณะกรรมการบรรษัทภิบาลขึ้น ในขณะที่ บริษัท ทรู คอร์ปอเรชั่น จำกัด (มหาชน) ได้มีการปรับปรุงกฎบัตรคณะกรรมการบรรษัทภิบาลไปเมื่อเร็ว ๆ นี้ เราคาดว่า จะมีการเปลี่ยนแปลงหลาย ๆ ประการเกิดขึ้นในไม่ช้า ขณะเดียวกัน นโยบายด้านความโปร่งใส และการเปิดเผยข้อมูลที่ได้พัฒนาขึ้นมาใหม่นั้นกำลังได้รับการทบทวนจากบริษัทต่าง ๆ ในเครือฯ ที่จดทะเบียนในตลาดหลักทรัพย์ฯ โดยแต่ละบริษัทจะตัดสินใจเองว่า จะนำนโยบายใหม่ไปใช้ หรือจะปรับนโยบายเดิมที่มีอยู่ให้สอดคล้องกับมาตรฐานใหม่ที่เครือเจริญโภคภัณฑ์ได้กำหนดไว้
 
คณะกรรมการบรรษัทภิบาลจะประชุมกันทุกไตรมาส โดยจะมุ่งไปที่ประเด็นสำคัญต่าง ๆ ตามที่ได้ ระบุไว้ในรายงานของคณะกรรมการฯ และเราจะแจ้งความคืบหน้าให้ท่านทราบเป็นระยะ ๆ
 
โครงสร้างผู้บริหารเครือเจริญโภคภัณฑ์
 
เมื่อเร็ว ๆ นี้ เราได้ปรับโครงสร้างผู้บริหารระดับสูงของเครือเจริญโภคภัณฑ์  โดยคุณธนินท์ เจียรวนนท์ ดำรงตำแหน่งประธานอาวุโส (Senior Chairman) ผมดำรงตำแหน่งประธานกรรมการ (Chairman) ส่วนคุณศุภชัย เจียรวนนท์ ดำรงตำแหน่งประธานคณะผู้บริหาร (CEO)
 
ท่านประธานอาวุโสธนินท์ เจียรวนนท์ จะยังคงมีบทบาทสำคัญด้านการควบคุมเชิงกลยุทธ์ และทิศทาง ด้านธุรกิจ ส่วนคุณศุภชัยและผมจะร่วมกันขับเคลื่อนประเด็นสำคัญของเครือเจริญโภคภัณฑ์มากยิ่งขึ้น และผม ในฐานะประธานกรรมการจะเน้นไปที่โครงการใหม่ ๆ และการลงทุน ในขณะที่คุณศุภชัย ซึ่งมีตำแหน่งประธานคณะผู้บริหาร จะรับผิดชอบดูแลการบริหารงานของเครือเจริญโภคภัณฑ์ รวมถึงการนำยุทธศาสตร์ใหม่ ๆ มาสู่การปฏิบัติ ทั้งนี้ เราทั้งสามคนล้วนมีตำแหน่งในคณะกรรมการ บรรษัทภิบาลเครือเจริญโภคภัณฑ์ และพวกเรามุ่งมั่นที่จะนำเครือเจริญโภคภัณฑ์ไปสู่มาตรฐานสูงสุด ในเรื่องนี้
 
เราทั้งสามคนจะทำงานกันอย่างใกล้ชิดในช่วงการเปลี่ยนผ่าน เป้าหมายระยะยาว คือ การดำเนินธุรกิจ โดยผู้ทรงคุณวุฒิมืออาชีพที่เหมาะสม ขณะที่สมาชิกในครอบครัวของเราจะมีบทบาทสำคัญ ในการขับเคลื่อนและบริหารจัดการทรัพย์สิน รวมถึงกำหนดมาตรฐานการลงทุนในบริษัทที่เราจะไป ร่วมลงทุน เราคาดหวังว่า คณะกรรมการบริษัทของเราจะให้มุมมอง ความคิด ตลอดจน การกำกับดูแลที่เป็นอิสระ ฟังเสียงผู้ถือหุ้นรายย่อย พนักงาน และผู้มีส่วนได้ส่วนเสียที่เกี่ยวข้อง
 
ในนามของคณะกรรมการบริษัทเครือเจริญโภคภัณฑ์ ผมขอยืนยันในความมุ่งมั่นที่จะนำ เครือเจริญโภคภัณฑ์ไปสู่เป้าหมายดังกล่าว ผมขอขอบคุณในความเชื่อมั่น และการสนับสนุนของท่าน ที่มีต่อเครือเจริญโภคภัณฑ์อย่างต่อเนื่องเสมอมา
 
นายสุภกิต เจียรวนนท์
ประธานกรรมการ เครือเจริญโภคภัณฑ์
 
 
 
 
COMMITTEE PROGRESS REPORT
 
This document reports on the establishment of, recent progress in
and future priorities for the
C.P. Group Corporate Governance Committee (est. September 2016).
 
   20 APRIL 2017

 
CONTENTS
 
CONTEXT. 3
COMMITTEE ESTABLISHMENT. 3
PROGRESS UPDATE. 5
Setting Standards  5
Reviewing Materials  5
Codifying Practices  6
Expanding Capacity  6
FUTURE PRIORITIES. 8
APPENDIX. 9
A. CORPORATE GOVERNANCE PRINCIPLES OF C.P. GROUP  9
B. COMMITTEE TERMS OF REFERENCE  12
C. COMMITTEE MEMBERHIP  19
 
 CONTEXT
At the time that this Committee was established in September 2016, significant change was occurring both in Thailand and internationally in the corporate governance expectations of investors, regulators and other public bodies. International institutional investors had begun integrating governance codes into their investment frameworks. Regulators and independent governance organisations worldwide were starting to articulate higher standards for and practical implementation guidance on corporate governance. Groups of investors and companies too started banding together to issue guidance on “practical” corporate governance. But despite this rising tide of expectations for stronger corporate governance and proliferation of best practice guidance, no single framework offered a roadmap that could account for the full complexity and situation of any individual company. 

COMMITTEE ESTABLISHMENT
Against this context and in view of recent scrutiny of C.P. Group’s governance standards and practices, the C.P. Group Corporate Governance Committee was formed. Its mandate was to determine how best to establish and adopt a guidance framework for corporate governance suited specifically to the unique complexities of C.P. Group: a widely diversified multinational conglomerate and third-generation family business that includes listed companies operating across multiple sectors and jurisdictions. 
To enable it to deliver best-practice guidance aligned with the unique operating and cultural contexts of C.P. companies, the committee’s membership was accordingly comprised of both internal business leaders  and external governance experts.  
In its first half year (September 2016 – February 2017), the Committee has focused on developing the corporate governance standards and practices of Charoen Pokphand Group Company Limited, the private parent company, which will guide its major listed subsidiaries in due course, across the following areas: 
1.    Setting Standards: The Committee’s first order of business was to map out the landscape of corporate governance topics it considered most relevant to C.P. Group and against those topics, set clear standards to which it would hold itself going forward.

2.    Reviewing Materials: Supported by external advisers, the next part of the programme comprises an assessment, benchmarking exercise and gap analysis of corporate governance policies, practical guidance, procedures, training and other practices.

3.    Codifying Practices: Against the findings of the review, the Committee is providing guidance on the articulation of a common set of corporate governance documents. This entails the codification of policies and practical guidance materials to serve as an internal best practice framework for C.P. companies.

4.    Expanding Capacity: Also against the findings of review topics and following the creation of documents codifying practices, the Committee recommends specific areas for which C.P. Group Company Limited should additionally adopt new compliance procedures, and oversight roles and functions.  
The following report outlines progress made since the Committee’s establishment and specifies key priorities for the remainder of its initial two-year term.

PROGRESS UPDATE
Setting Standards
To articulate standards for governance approach, priorities and goals, the Committee has developed and C.P. Group has now adopted a set of 11 Corporate Governance Principles of C.P. Group (Appendix A) that articulate fundamental expectations on stakeholder engagement, risk governance, corporate culture and board stewardship among all C.P. companies.

Reviewing Materials
The Committee set itself the following focus areas, listed in sequence of review. This sequencing was determined through the Committee’s assessment that each represents a successively more interconnected area of corporate governance, the consideration of which is best informed by building upon the findings and conclusions of those preceding. 
•    Stakeholder engagement – focusing in particular on the decision-making process and supporting practices for how C.P. Group approaches disclosure and transparency issues stemming from its intrinsic connectedness as a business group sharing reputation, stakeholders and, occasionally, strategic activity. 

•    Risk governance – focusing in particular on the major risk areas to and risk management framework of C.P. Group that, as a collective entity, both exposes all subsidiaries to common reputation risks and at the private parent level, is exposed by its subsidiaries to specific operational risks.

•    Board stewardship – focusing in particular on the approach to board structure, composition, succession, and evaluation of global best practice, in light of the overlapping membership of C.P.’s listed company boards and dual Group and listed-company roles held by family member directors.

•    Corporate culture – focusing on the values underpinning the mindset and behaviours of all C.P. employees; defining the century-old corporate culture and bringing it to life with fresh looking content, in particular how to drive meaningful growth through sustainability.

Diagram: Review Areas  


While the review is an ongoing process, individual topics are considered on a quarterly or half-yearly basis. Up to half a year has been allocated for the consideration of each focus area. To date, disclosure and transparency, under stakeholder engagement, has been completed, while various risk governance topics are now in the process of review.  

Codifying Practices
Following the review process, the Committee recommended that current practices within C.P. Group be formally codified through policies and practical guidance materials that sit in letter for the parent company and in spirit for the wider C.P. Group. 
To date, the Committee, supported by external advisers, has developed policies and guidance materials on disclosure and transparency, specifically on shares and securities dealings, persons with access to inside information, identification of connected persons, conflicts of interest, and disclosure of inside information.  
The Committee has recommended that suite of documentation be adopted by C.P. Group, and the company is currently finalising plans that would enable their roll out at a Group level. It is also in the early stages of developing similar documentation on various risk governance topics. 
Separately, key C.P. listed companies are also currently in the process of developing a roadmap for benchmarking and, where appropriate, alignment with the codified Group-level practices. 

Expanding Capacity
The Committee recommended disclosure and transparency as the priority focus for expanded capacity at the Group level in 2017 because of the intrinsic connectedness of C.P. Group and C.P. companies’ occasionally shared strategic activity aimed at achieving greater synergy. In addition to the newly codified practices, it is finalising plans that would enable the roll out of the following: 
•    To facilitate adoption at group level, policies and procedural guidelines in the area of disclosure and transparency.

•    To guide alignment in practical application of the newly developed best practice policies and guidance materials, a training programme targeting all key functional staff on the new policies and guidance materials. The programme would focus on areas of procedural collaboration pending the final shared policy structure determined by all companies upon completion of their review of the best practice documentation. 

•    To enable governance-minded leadership, a director and senior executive workshop training that improves practical understanding of the associated topics, in addition to specific responsibilities, under the updated policy structure. This training has been developed to focus in particular on those leaders who hold roles across multiple C.P. companies. 


FUTURE PRIORITIES
In the year ahead, the Committee will focus on the below priorities:
•    Risk Governance
The Committee will next address additional risk governance topics as part of its materials review.

•    Board Stewardship and Corporate Culture  
Subsequently, the Committee will consider and recommend a second focus area for expanding capacity based upon the conclusions of the remaining review areas (board stewardship and corporate culture). 

Formal Group-level Corporate Governance System
The Committee will also continue to work towards the following governance priorities for C.P. Group, the parent company.

1.    Training: Rolling out general compliance training for all corporate staff, integrating annual certification and new hire onboarding requirements - in particular for directors and senior management. This will be the first iteration of a continuous exercise of refreshment and accreditation among C.P. corporate staff. Long-term, these will also be reinforced by KPIs embedded into management incentive schemes and individual performance evaluations. 

2.    Code of Conduct: Establishing, reviewing and updating, as appropriate, a Code of Conduct that clarifies all standards of behaviour consistent with C.P. companies

3.    Oversight Roles and Functions: To establish Group-wide visibility on and maintain newly developed policies and practices, and monitor areas for improvement, the appointment of various Group-level management roles and supporting functions (e.g., sustainability and compliance). The Committee will leverage its collective experience and network to scope these roles and identify appropriate leadership candidates and functional structures.

APPENDIX

A. CORPORATE GOVERNANCE PRINCIPLES OF C.P. GROUP 
C.P. Group has become a leading Asian business through entrepreneurship and a pioneering spirit, and by anticipating the changing needs of countries and communities as they develop.  We grow and build businesses diligently and responsibly. Many remain wholly owned by C.P. Group. Over time, we have taken some public but remain large shareholders and hands-on managers.  
As we diversified over the years into new sectors and across geographies, we have been guided by the values of integrity and honesty, a commitment that began nearly a century ago when we pioneered the use of expiration dates and product warranties in our very first business, selling seeds directly to the farmers of Thailand. 
All of our businesses are united by shared values – what we call our Three Benefits Principle. Applying to all our people, it affirms our vow to conduct business always with the aim of providing benefit to the countries in which we invest; the people whose communities we share; and the companies for which we are responsible. With our Corporate Governance Principles, we seek to define a common set of fundamental expectations for how the Boards of those companies should lead our businesses, respect minority shareholders, engage all stakeholders, oversee risk and govern their own stewardship. 
Anyone who works with us; as co-investor, investee or other stakeholder in our shared futures, should know that these Corporate Governance Principles will be our North Star. We know we do not yet consistently meet each of them across all our businesses today. We are working hard to change, and as we do, these are the standards against which we will judge ourselves and against which we are willing to be judged. 

1.    We take the long view. Continual evolution made us who we are today, and it is what will keep us here tomorrow. Companies must evolve to stay competitive and to seize new opportunities. We have always embraced this truth: Entrepreneurialism is in our DNA. But we are never opportunistic for its own sake. We plan our growth thinking always about the long term. 


2.    Connectedness is a source of strength. With our greater ability to share resources, however, comes the greater responsibility to act with subtle understanding of and total adherence to the complex regulations that will apply at any given time. Each of our businesses has a separate board of directors. Some of those directors overlap, and sometimes, they have both Group and listed company responsibilities. We hold that our intrinsic connectedness as a single Group allows us uncommon synergy and ability to deliver higher quality and better service to all our customers. Nevertheless, we are well aware of the inherent complexity and potential for conflicts that results. We work hard to ensure that we remain in compliance with all the rules and regulations that may apply to us at any time and that we stay consistent in our protection of minority shareholders’ interests.

3.    We strive to enable responsible risk management — but always while understanding that our boldness is an asset we must never lose. While the Board oversees and should regularly assess the risk management framework, it must not be reflexively risk averse. We have become the multinational conglomerate we are today because of our entrepreneurial mindset and pioneering spirit. As such, we expect the Board to define and communicate a risk appetite that balances risk and reward, always in the view of prioritizing the long-term interests of the company and its stakeholders.

4.    Our Boards exist to provide leadership, set strategic objectives and make the decisions that will build real and long-term value for the company and all of its stakeholders. We expect every CP board to set its own agenda and to provide the clear direction and sustainable structures and processes that will stimulate robust and forward-looking business. We also expect the Board to unambiguously and appropriately empower Management to implement those objectives and measure success against them. 

5.    Our Directors serve to provide the informed and critical perspective that collectively results in all Board decisions. To uphold their duties, they must be strong, steadfast, and willing and able to challenge constructively. Every Director has a unique role and contribution to deliver the Board. While the dynamics of the room and culture of the group will vary for each individual board, we expect all of our directors, particularly non-executive directors, to act with independence of mind and strength of conviction.

6.    It is vital to the long-term health of our boards that director perspectives remain sufficiently current, fresh and broad enough to contend with the rapidly expanding range of critical issues and shifting business dynamics. We expect all CP boards and directors to proactively educate themselves on the company, its industry, external issues and all relevant external developments. They must also enable themselves to acquire the necessary information and professional advice to duly perform their duties.


7.    We structure our Boards with the aim of cultivating a board culture where decisions stay informed and remain sound as a result of the collective wisdom, judgment and experience of all Directors. 
We know there is no one formula for structuring board leadership and composition. We require that each of our boards has a structure, size and composition that balances the diversity of experience, skillset and perspective, as well as strength of commitment and independence of mind that will be conducive to effective performance.

8.    We aim for rigor and appropriate transparency in our approach to incentivising and evaluating performance at the individual, firm and board level. 
The performance of everyone within our Group should align with the long-term interests of the firm; it is the responsibility of the Board to set, oversee and, if listed, disclose the remuneration framework that can incentivise Management and Staff to deliver on business objectives.

The Board must establish and enforce clear guidelines on Director and Management compensation, as well as benchmarks and performance assessments on individuals, as well as for committees and the board as a whole. Listed companies must additionally disclose these materials and should also consider appointing external consultants to perform regular board assessments to ensure that their leadership teams may remain sharp, vigilant and aligned with best-in-class expectations in the international business community. 


9.    We commit to open, effective and ongoing communications with all of our stakeholders. 
Good corporate governance goes beyond regulatory compliance. It demands due respect to and careful management of the key relationships between CP and all those stakeholders who hold an interest in the proper conduct of our affairs. Whenever appropriate, we aim to engage in robust two-way communication with these groups. In how we measure success, we also aim to critically assess and hold ourselves to an assessment of our efficacy in engaging and aligning with the long-term interests of those stakeholders. 


10.    We must be unwavering in our commitment to enabling the minority shareholders of our listed businesses to exercise their rights effectively. 
Our shareholders have the right to appropriate access to management and to being informed in a timely manner about our business performance. To that end, each Board must facilitate and disclose a clear, balanced and comprehensible assessment of the financial position and prospects of the company. To safeguard the integrity of our listed businesses, it is also the responsibility of the Board to ensure effective systems of financial and non-financial control and reporting are established, maintained and independently verified. 

11.    Integrity and honesty go to the heart of who we are. 
From our first day, we have defined ourselves by the pursuit of shared value. We expect the Board, Management and Staff to maintain high ethical standards in everything that they do. That includes honest and fair dealing with suppliers and customers; responsible action towards the environment and maintaining business dealings only with partners who share similar ethical business practices. 


 
B. COMMITTEE TERMS OF REFERENCE 

13 SEPTEMBER 2016
        (AS AMEDNDED ON 8 MARCH 2017)

TERMS OF REFERENCE
(otherwise known as “The Charter”)
 
CORPORATE GOVERNANCE COMMITTEE OF
CHAROEN POKPHAND GROUP COMPANY LIMITED
(THE COMMITTEE)


1.    INTRODUCTION AND PURPOSE
1.1    The purpose of the Committee is to serve as the body established by the Board to provide it with advice in order to assist and enable the Company and the Group (including its Key Group Companies) to conduct business responsibly and in line with global standards of best practice in Corporate Governance.
1.2    The Committee’s duties and responsibilities set out in these Terms shall be discharged by it acting in an advisory capacity to the Company, including in particular in its capacity as the controlling shareholder of the Group, in each case in respect of the matters contemplated by these Terms.  In doing so, the Committee shall:
(a) report to the Board and make recommendations on matters relevant to and affecting the     Company, as well as the Group taken as a whole; and
(b) make recommendations to the respective boards of directors of each Key Group Company (as the principal investee companies of the Company).
1.3    The Committee shall be accountable to the Board and shall have non-executive responsibility for oversight of Company and Group policies and standards covering Corporate Governance.
1.4    Corporate Governance shall, for the purposes of these Terms, be construed in the broadest sense to refer to the systems and standards by which the Company (and, in turn, the Group (including, in particular, each Key Group Company)) carries on its business.  As contemplated by these Terms, this shall include but not be limited to the relationships between the Company, the Group (including, in particular, each Key Group Company) and each of their respective stakeholders, including shareholders, employees, customers, suppliers, regulators and the broader community and environment.
1.5    For the purposes of these terms of reference (the Terms, otherwise known as “The Charter”), the definitions in the Appendix shall apply.

2.    ESTABLISHMENT AND AUTHORITY
2.1    The Committee was established by resolution of the Board on 6 September 2016.
2.2    The Committee is authorised by the Board to:
(a) perform any activity within these Terms;
(b) to the extent permitted by applicable laws and regulations, seek any information it requires from any member of Management or employees of the Group and all Management and employees are directed (so far as it is within the powers of the Company) to co-operate with any request made by the Committee; and
(c) obtain, at the Company’s expense, external independent professional advice and to secure the attendance of external persons and parties with relevant experience and expertise if it considers this necessary.
2.3     The Committee shall be provided with sufficient resources to perform its duties.  The Committee shall also be responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference and appointment for any external party who advises the Committee. 
2.4    In discharging its duties under these Terms, the Committee shall give due consideration to all laws, regulations, codes, listing rules and other applicable rules as appropriate and necessary.

3.     MEMBERSHIP AND COMPOSITION
3.1    The Members shall be appointed by the Board.  The Committee shall comprise of the following Members:
(a) the Senior Chairman and/or the of the Company;
(b) at least two Members shall be Group Listed Company Executive Directors (excluding the Senior Chairman and/or the Chairman of the Company, as applicable);
(c) at least four Members shall be Group Listed Company Independent Non-Executive Directors; and
(d) six Members shall be External Independent Members,
provided that in each case that at any time (i) not less than one fourth of Members shall be External Independent Members and (ii) not less than a majority of Members shall, taken together and in aggregate, comprise Group Listed Company Independent Non-Executive Directors and External Independent Members.
3.2     Appointments of Members shall be for a period of up to two years, or such other period as may be approved by the Board and the relevant Member provided that the requirements of paragraph 3.1 above continue to be satisfied following any such approval.
3.3    The Chairman of the Committee shall be the Senior Chairman or the Chairman of the Company.
3.4    To the extent it may be considered appropriate or necessary, a simple majority of the Committee may appoint a Senior Committee Member of the Committee (the Senior Committee Member).  The Senior Committee Member shall be an External Independent Member.  The responsibilities and powers of the Senior Committee Member shall be set out in the relevant resolution appointing the Senior Committee Member to that position. 
3.5    The Secretary of the Committee shall be appointed by the Board.
3.6    No External Independent Member may become a director, officer, employee or shareholder (whether direct or indirect) of any Group Company during his or her term of appointment as a Member.  All External Independent Members shall procure that none of their respective close family members becomes a shareholder (whether direct or indirect) of any Group Company, save to the extent that any such shareholding is of a de minimis level.  In addition, no External Independent Member may have any business relationship(s) with any Group Company pursuant to which a significant proportion of the relevant External Independent Member’s (or his or her close family member’s) earnings, net worth and/or assets are attributable to such business relationship(s).

4.    DUTIES AND RESPONSIBILITIES
4.1    The Committee shall have responsibility for the review and oversight of Corporate Governance (as more particularly described in paragraph 4.2), including:
(a) corporate governance policies, procedures and systems;
(b) risk management systems and internal controls; and
(c) conduct with regard to corporate and societal obligations and reputation as a responsible corporate citizen,
in each case of the Company, the Group and, as appropriate, each Key Group Company, with a view to (1) bringing any relevant issues to the attention of the Board, (2) making recommendations relating to any such matters to the Board and (as appropriate) the boards of directors of each Key Group Company, and (3) periodically reviewing the implementation of such recommendations and updating the Board as appropriate.
4.2    Without limiting the generality of paragraph 4.1, the Committee’s specific responsibilities shall include but not be limited to the following matters:
(a) assisting the Board to scope, define and articulate and, to the extent deemed appropriate, implement its overarching approach to and its key priorities and goals in relation to Corporate Governance matters;
(b) defining the strategy, scope and nature of the Corporate Governance standards, policies, procedures, systems and other guidelines of the Company and the Group (including as may be recommended for each Key Group Company) (the Governance Policies);
(c) following their implementation, reviewing and evaluating the Group’s Governance Policies on an ongoing basis to ensure such Governance Policies are effective and aligned with global standards of best practice in Corporate Governance, and to propose any amendments and revisions to the Board for approval (or as may be recommended to the relevant board of directors of any Key Group Company);
(d) reviewing and recommending training programmes concerning Corporate Governance matters (including the Governance Policies) relating to the Group, as may be provided to the Company or any Key Group Company internally or by external advisers from time to time;
(e) periodically reviewing the Group’s legal and compliance functions (including those specific to each Key Group Company), making periodic assessments as to the effectiveness of such functions and reporting any deficiencies to the Board;
(f) to the extent permitted by these Terms and applicable laws and regulations, periodically reviewing and evaluating the performance of the Board and the respective boards of directors of each Key Group Company and considering and discussing future senior leadership issues for the same, including succession planning;
(g) identifying and reviewing those external developments which are likely to have significant influence upon the Group’s reputation (including the respective reputations of each Key Group Company individually) and/or its ability to conduct its business appropriately, in a sustainable and responsible manner and as a good corporate citizen.  Relevant developments will include those in the fields of government relations, best corporate practice (both in Thailand and internationally), the views and programmes of particular interest groups, academia and other opinion formers and issues of growing importance to the general public;
(h) establishing, reviewing and updating as appropriate a Group-wide Code of Business Principles, to be recommended for application to each Key Group Company to ensure that the Group’s standards of business behaviour are up-to-date and reflect the best practices of business in this area; and
(i) reporting to the Board on the Company’s and the Group’s standing in the external world, particularly by way of feedback from external surveys, investors, other key stakeholders and target audiences.

5.    REPORTING PROCEDURES
5.1    The Committee shall report to the Board after each meeting and shall make whatever recommendation to the Board it deems appropriate where action or further investigation is needed in respect of the Company and the Group.
5.2    The Committee may make whatever recommendation to the respective boards of directors of each Key Group Company it deems appropriate where action or further investigation is needed.  To the extent permitted by applicable laws and regulations and so far as it is within its powers, the Company shall procure that each relevant Key Group Company: (a) implements such recommendations in a reasonable and timely manner; and (b) periodically reports to the Committee regarding the progress and status of such implementation.

6.    FREQUENCY AND PROCEDURE OF MEETINGS
6.1    Meetings of the Committee shall be held not less than four times per calendar year, expected (as at the date of these Terms) to be scheduled: during the week commencing 12 September 2016; during the week commencing 14 November 2016; during the week commencing 27 February 2017; and in May or June 2017, with further meetings thereafter to be scheduled in due course, and with any other meetings to be held as and when Members unanimously consider it appropriate.
6.2    Meetings shall be convened by written notice of not less 14 days prior to the intended date of the meeting (or such other period as may be agreed by all Members), to be served on each Member by the Secretary of the Committee.  The Secretary of the Committee shall be responsible, in conjunction with the Chairman of the Committee, for compiling and circulating an agenda for the meeting and other relevant documents for the meeting with the written notice.
6.3    All Members shall be expected to attend each meeting of the Committee in person.  Other members of senior management of the Company and external advisers to the Company may be invited to attend meetings of the Committee as and when considered appropriate by the Board.
6.4    The quorum for meetings shall be a minimum of the Senior Chairman and/or the Chairman of the Company, three Group Listed Company Executive Directors (excluding the Senior Chairman or the Chairman of the Company, as applicable), two Group Listed Company Independent Non-Executive Directors and four External Independent Members, provided that in any event that for any meeting (i) not less than one fourth of Members attending shall be External Independent Members and (ii) not less than a majority of Members attending shall, taken together and in aggregate, comprise Group Listed Company Independent Non-Executive Directors and External Independent Members. For the purposes of this paragraph 0, the quorum requirement in respect of the Senior Chairman or the Chairman of the Company shall be met if a Senior Committee Member (appointed under the terms of paragraph 0 to perform the role of the Chairman of the Committee), is present (and, for the avoidance of doubt, any such Senior Committee Member shall also be counted towards the foregoing quorum requirements in respect of External Independent Members).
6.5    Formal decisions of the Committee shall be made by a simple majority vote, with the Chairman of the Committee holding a casting vote.
6.6    Management shall be obliged to supply the Committee with adequate information in a timely manner in order to enable it to make informed decisions.
6.7    The Secretary of the Committee shall prepare minutes of all meetings of the Committee and these shall be promptly circulated to all Members.  The minutes should be available for inspection on reasonable notice by any Member or Director.  Minutes of the meetings of the Committee should record in sufficient detail the matters considered by the Committee and decisions reached, including any concerns raised by Members or dissenting views expressed.  Draft and final versions of minutes of such meetings should be sent to all Members for their comment and records within a reasonable time after such meetings and in any event, with adequate time before the next meeting.

7.    SELF-ASSESSMENT AND PERFORMANCE EVALUATION
7.1    The Committee shall, if requested by any Member, review and assess the adequacy of these Terms (including the scope of its duties under section 4 of these Terms), to ensure the Committee is operating effectively and in accordance with the objectives of the Board.  Any amendments proposed to these Terms by the Committee shall be subject to approval by the Board.
7.2    The Committee shall ensure that these Terms are made available at http://www.cpgroupglobal.com.
7.3    The Committee shall conduct an annual performance self-evaluation to ensure that it is functioning in accordance with these Terms and reports thereon to the Board. This evaluation shall take into account the views of the Board on the performance of the Committee.
 
APPENDIX:
DEFINITIONS
Board means the board of directors of the Company from time to time;
Committee means the corporate governance committee of the Company established by resolution of the Board in accordance with these Terms;
Company means Charoen Pokphand Group Company Limited;
Corporate Governance shall have the meaning given to it in paragraph 1.4 of these Terms;
Directors means the members of the Board from time to time;
External Independent Members means those Members who are not directors, officers, employees, shareholders, business partners or otherwise associated persons of the Group and who are considered by the Board to have the requisite qualifications, skills and knowledge of Corporate Governance matters to be appointed as external independent Members to assist the Committee in discharging its duties;
Group means the Company, its subsidiaries and any other entity in which the Company owns, directly or indirectly, at least a 5% equity interest, and Group Company means accordingly any of the foregoing;
Group Listed Company Executive Directors means any executive director or key strategic advisor from time to time of any Key Group Company and, for clarity, shall include the Senior Chairman, the Chairman and the Chief Executive Officer of the Company;
Group Listed Company Independent Non-Executive Directors means any independent non-executive director from time to time of any Key Group Company;
Key Group Company means any of the Company, Charoen Pokphand Foods Public Company Limited, C.P. Pokphand Company Limited, CP All Public Company Limited., Siam Makro Public Company Limited, True Corporation Public Company Limited and C.P. Lotus Corporation, as may be amended from time to time;
Management means any persons discharging an executive management role within the Group (which includes but shall not be limited to any Group Listed Company Executive Director and any other senior manager of any Key Group Company);
Member means any member of the Committee appointed by the Board in accordance with these Terms; and
Senior Committee Member shall have the meaning given to it in paragraph 0 of these Terms.

C. COMMITTEE MEMBERHIP

Executive Directors of C.P. Group and its Main Listed Companies: 
1.    Mr. Dhanin Chearavanont (Senior Chairman, C.P. Group)
2.    Mr. Soopakij Chearavanont (Chairman, C.P. Group)
3.    Mr. Suphachai Chearavanont (Group CEO, C.P. Group)
4.    Dr. Ajva Taulananda (Vice Chairman, C.P. Group; Vice Chairman, True Corp.)
5.    Mr. Adirek Sripratak (Vice Chairman, CP Foods; Director of CP All and Siam Makro)
6.    Mr. Tanin Buranamanit (Director, CP All)
7.    Mr. Umroong Sanphasitvong (Deputy Group CFO, C.P. Group; Director of True Corp. CP All, and Siam Makro) 
8.    Mr. Hans Werner Reich (Senior Advisor, C.P. Group) 
Independent Non-executive Directors of the Key C.P. Listed Companies:
9.    Dr. Chaiyawat Wibulswasdi (Independent Director, CP Foods)
10.    Dr. Kosol Petchsuwan (Independent Director, True Corp.)
11.    Professor Prasobsook Boondech (Independent Director, CP All)
12.    Mr. Andrew Ma (Independent Director, C.P. Pokphand)
External Independent Members 
13.    Mr. Paron Israsena Na Ayudhaya (former CEO of Siam Cement)
14.    Professor Hiran Radeesri (Expert on Corporate Governance and Social Responsibility at the Stock Exchange of Thailand, and Honorary Chairman of the Thai Institute of Directors)
15.    Dr. Kittipong Kittayarak (Executive Director at the Thai Institute of Justice and previously Permanent Secretary at the Ministry of Justice)
16.    Mr. David Gordon Eldon (former Chairman of HSBC Asia Pacific)
17.    Ms. Kath Cates (former COO of Wholesale Banking at Standard Chartered and Global Head of Compliance at UBS)
18.    Mr. George Hongchoy (CEO of Link Asset Management Limited)