The Erawan Group is managed on
the principle of good corporate governance
The Erawan Group Public Company Limited has conducts the business based on the Corporate Governance Principle by focusing on a law-abiding operation and adhering to morality and business code of conduct where the information is disclosed in a transparent and straightforward manner. We also established the internal control system and auditing mechanisms to ensure that our operations are effective and efficient. We operate the business by taking into account our responsibility in every aspect to shareholders and stakeholders. The Company Board of Directors’ structure, that stipulated 36.36% of total number must be independent directors, was consist of 4 sub-committees in order to supervise the management in detail.
With regard to the corporate governance, The Erawan Group has set up the Nominating and Corporate Governance Committee (NCG) to establish, review and update the corporate governance policies and practices to ensure that the company have the management standard and guidelines which can be actually and appropriately implemented under the President’s supervision. The established corporate governance practices was divided into 8 areas and, for more effective, it was used as one of the factor of the staff’s annual performance appraisal.
The Erawan Group has emphasized the staffs’ understanding on the concept of Corporate Social Responsibility where business is run by properly taking into consideration the interest of all stakeholders whether they are employees and family, customers, suppliers/creditors, competitors, public sector, society and environment and has appointed the responsible unit to monitor and conduct an opinion survey of stakeholders regularly. In 2015 and 2017-2019 the Erawan Group was certified as an ESG100 Company are recognized for its outstanding sustainability performance in the tourist & leisure sector in Thailand by ThaiPat Institute and the Securities and Exchange Commission, Thailand (SEC) and Certifies as The Member of Thailand’s Private Sector Collective Action Coalition Against Corruption’s (CAC) on 30 June 2020
Corporate Governance can be divided into eight areas as follows:
The Erawan Group have announced a policy to conduct our business based on the principles of good corporate governance. We combined the best practices and the Code of Conduct, which not only were in line with our corporate strategy, but were also practicable, into our Code of Conduct manual. The manual was updated in 2014, which was indeed a significant move based on our motto of “Success with Integrity”. The updated Code of Conduct has been distributed to executive officers and staff for implementation to ensure our success with integrity and also to promote our corporate culture and ethical performances. Our Code of Conduct is now posted in our website at www.TheErawan.com, a mechanism to ensure that our directors, management and staffs commit to their responsibilities to all stakeholders.
Not only qualifications of our directors are in line with the SET’s requirements, but they are also much more intensive. Director’s term of office is three years each term with clear scopes of work and with power being balanced between non-executive directors. The Board of Directors consists of 11 members - the Chairman of the Board who is a different person from the President where their roles, authority and responsibilities are clearly separated to maintain balance between managing and supervising function, 4 Independent Directors, 6 Non-executive directors and 1 executive directors.
The Board has appointed 4 different committees to clearly define duties and responsibilities and also has a rotation policy among directors to sit at different committees for appropriate timeframe and on appropriate occasions. Chairman of the committee is responsible for submitting a clear-cut policy of his committee to the Board. Every committee must appoint a secretary, who will coordinate with directors and the management to ensure that the policy was applied in action and record minutes of meeting in writing.
The Committees are as follow:
The Audit Committee (AC): The Audit Committee consists of 3 independent directors who must have sufficient knowledge on accounting, finance and nature of company business in order to be responsible for reviewing the company’s financial statements and its internal control system and monitoring the company’s risk management practices on a regular basis. The Audit Committee’s responsibilities are also to review the independence of the company’s Internal Audit Unit, to approve the appointment, transfer or termination of head of unit who works as its secretary, to review the legal compliance, to select, appoint, remove and propose an auditor and auditor’s fees and to review and disclose information about connected transactions to meet the criteria in an accurate and transparent manner.
The Strategic and Investment Committee (SIC): The Committee consists of 8 members and is responsible for considering and formulating the business plan and long-term strategy of the Company, supervising and approving the investment projects and divestment transactions as set out in the Company’s master plan. The Committee’s responsibilities shall include a preliminary approvals of project feasibility, financial returns, and review of risks associated with the project, financial structure and source of financing and giving the recommendation to management in relation to business opportunity.
The Nominating and Corporate Governance Committee (NCG): The Committee consists of 3 members and is responsible for reviewing the structure of the Board, setting qualifications of a particular position, reviewing and recruiting experts to become our directors as well as assessing the Board’s performances and other committees appointed by the Board. The Nominating and Corporate Governance Committee also oversee that directors, executive officers and staff of all levels will comply with the Good Corporate Governance practices and Code of Conduct.
The Management Development and Compensation Committee (MDC): The Committee consisting of 3 members and is responsible for proposing development policies, assessing knowledge and skills of and compensations to the Executive Management writing the executive management’s succession plan and reviewing the company’s HR development policy.
Please see details at “Board and Committees-Qualification of Directors”
The Board of Directors determines policies and practices for the management, which include important tasks of an executive. In addition, the Board also allows the management to formulate a management policy based on the Company’s objectives and missions, which will be subject to the Board’s approval.
The Board of Directors also sets to have the meeting of Independent Directors, and the meeting between the directors and senior executives without the top management’s presence.
The Company has established a number of the Board Meetings and Committee Meetings where directors and relevant parties are notified in advance throughout the year. There are also agendas where independent directors may meet each other and independently exchange opinions without the presence of the President and the executive management team.
In 2021, the Company convened 12 Board of Directors’ meetings; 6 Audit Committee’s meetings; 12 Strategic and Investment Committee’s meetings; 2 Nominating and Corporate Governance Committee’s meetings; and 3 Management Development and Compensation Committee’s meetings. On every occasion, the minutes of the meeting was kept in writing at the Company Secretary and Corporate Governance Division and on a data server for an easy access by internal stakeholders.
Our Board of Directors is subject to an annual performance evaluation. To comply with the principle of good corporate governance for listed companies, the Board of Directors and sub-committees are having a self-evaluation at least once a year so that they could review and improve their own conduct. The evaluation is based on the latest forms developed by the Corporate Governance for Capital Market Department of the Stock Exchange of Thailand (SET) released in February 2015, which is applied to suit our business nature and to
cover performances of one Board of Directors and four Subcommittees. The forms we have used consist of the following:
- Evaluation form of the Board of Directors’ performance to evaluate the entire Board.
- Evaluation form of four Sub-committees
- Evaluation form of Self- assessment
As for the Board of Directors’ evaluation performance in 2021, 100% of the board members agreed with the structure of the board and its components that they were appropriate and that members were independent enough to create a right check and balance. The opinion that directors did understand their roles and responsibilities that they were independent when making a decision without being dominated by anyone. They performed their duties with responsibilities to maximize the interest of shareholders. They did have a good relationship with the management and could frankly communicate with executives. They were properly exposed to both self-development and executive development processes that allowed them to adequately understand the nature of the business.
The Board entrusts the Nominating and Corporate Governance Committee to draft a clear nomination policy and process for the selection of directors. This refers to a process to initially check a nominee’s qualifications to ensure that his/her is in compliance with director’s qualifications; a selection and courting process of a nominee to be our director; a nomination process to the Board or shareholders and a reviewing process of director being re-nominated. An individual evaluation of a director’s performances while in the office will be used to support the consideration.
Furthermore, the selection was independently conducted without being subject to anyone’s influence. The management conducted a two-hour orientation session and arranged for a management team to meet the new director so that he learned about the company, got access to corporate information and strategic plans.
The Board designated the Management Development and Compensation Committee to recruit and formulate a succession plan of executive management, to ensure continued performances and to avoid business disruption.
The Board of Directors has formulated several business strategies and also has a strong determination to develop a sustainable business through the nurturing of internal CSR mentality. Known internally as the “CSR-in-process” the mechanism refers to our responsibilities to all stakeholders; namely, shareholders, employees and families, customers, suppliers, creditors, competitors, public sector, the communities, the society and the environment. In addition, the Board of Directors has also set aside budget to conduct corporate contribution activities (CSR-after-process). The project is called “The ERAWAN for Society and the Environment” which involves annual activity programs on a continuous basis for the benefit of communities and the society at large.
which takes into consideration all groups of stakeholder
In addition, we have benefited from the development of a process aimed to enhance the CSR concept by taking into consideration the interests of all stakeholders. Aside from creating values to the society, as a company, we have benefited from the fact that it keeps us run our business on a fair practice, allows us to support trade competitions and liberation and prevents us from doing anything considered a conflict of interest and intellectual property infringement and leads us to oppose all forms of corruption (For more information, please go to the Anti-Corruption Policy, the Anti-Money Laundering and Countering Financing of the Terrorism Policy and the Sustainable Development Policy,). In addition, it also helps preparing us for the ISO37001 anti-bribery management system and makes us consider human rights, fair labor treatment as well as community, social and environmental development under the CSR-in-process concept as our practice with all groups of stakeholders. (For more information, please go to “Code of Conduct” on our website.)
The Board of Directors takes into consideration shareholders’ rights without limiting only to their fundamental rights as stipulated by laws. This refers to their rights to trade or transfer shares, to share the company’s profits, to adequately receive the company’s information, to attend meetings to vote at shareholders’ meeting in order to either appoint or remove directors and to appoint or remove auditors and discuss important matters affecting the company. In this regards, important matters can range from allocating dividends to formulating or amending rules and regulations and the Memorandum of Association, increasing or reducing capital and approving special transactions. The Board of Directors also supervises to ensure that meeting’s time, date, place and meeting agendas are given to shareholders, that relevant documents and information required for making decisions at a meeting are available to shareholders, that shareholders are notified of applicable rules at the meeting, that voting procedures are not too complicated and that a meeting location is convenient and not expensive for shareholders to attend the meeting.
The Board of Directors has allowed shareholders to propose agendas of the Annual General Meeting of Shareholders in advance prior to the meeting date. Clear rules and regulations in doing so have been posted in the company’s website to facilitate shareholders. Shareholders may submit a document to propose potential meeting agendas by January 31 of every year. The Board encourages shareholders to use Proxy Form B so that shareholders can determine a voting direction as there are names and information of five Independent Directors who can be alternative proxy for shareholders. In addition, the information must be posted in the Company’s website at least 30 days prior to the meeting. Documents must also be sent to shareholders in advance enough for them to study prior to the meeting. During the Meeting, the Company treats every procedure equally. No agendas are shortened, deleted or alternated. This is especially the case of an agenda to appoint directors where shareholders are entitled to vote for directors individually upon enough information. All ballots featuring yes, no and abstention votes are duly kept as evidence. At the Annual General Meeting of Shareholders for the year 2020, no voided ballot.
At every shareholder’s meeting, Chairman of the Board, Chairman of the Committees, Directors, the Chief Executive Officer (CEO) and the President attend the meeting to allow shareholders to express their views and ask questions about relevant matters to the meeting. During the past, the Chairman, Chairman of Sub-committee and Management attended the meeting to allow shareholders to ask questions in an adequate fashion, which however did not delay the meeting. In addition, Q&A sessions, resolutions adopted at the meeting and votes received at each agenda were properly recorded in writing in the Company’s minutes of meeting and posted at the Company’s website within 14 days from the shareholders’ meeting date.
Aside from the Board’s responsibilities to shareholders as mentioned above, the Board also formulates a Corporate Social Responsibility policy, which includes responsibilities to shareholders as follows.
- To manage the Company in a way that will turn it into a quality corporation committed to integrity while creating sustainable strength and growth for shareholders in the long run.
- To perform our job with thorough care and competency as a business may do under the same situation.
- To perform our duty with integrity and to fairly treat both major and minor shareholders for the benefit of all relevant parties.
- To manage the Company’s properties in a manner that avoids their depreciation.
- To report the Company’s status and operation results regularly, accurately and completely based on existing facts.
- To prevent the Company’s confidential information from being improperly disclosed to the third party.
- To avoid doing anything that may lead to a conflict of interest against the Company without any advanced notice.
- To respect the rights and to equally treat all shareholders, whether they are executive or non-executive shareholders, and foreign shareholders.
We set up the Investor Relations Survey (IR Survey) Department as a center to provide complete company information to retail and institutional investors, shareholders, analysts and the public sector. Contacts can be made directly at the Company’s office or visit us at www.TheErawan.com. Inquiries can also be made through IR@TheErawan.com.
We give all stakeholders an access to information. We also determine guidelines and practices for our executive officers and staff to encourage their fair and equal interactions with all stakeholders. We also allow stakeholders to directly contact the Board, the Audit Committee and the Nominating and Corporate Governance Committee for their valuable suggestions that will not only benefit but also add more values to our management at our office, No. 2, Ploenchit Center Building, 6th Floor, Sukhumvit Road, Klongtoey District, Bangkok; or at the Office of Corporate Governance, email: GCG@TheErawan.com. All information is treated confidential and will be directly forwarded to the Board.
The Erawan Group considers that it’s the responsibility of directors, executives and all employees to acknowledge and perform their duties diligently. It’s the duty of the Nominating and Corporate Governance Committee to have directors, executives and employees at all levels comply with the corporate governance best practices and the Business Code of Conduct. The secretary will help coordinating, following up with results and reporting the practices so that information can be disclosed to shareholders through both internal and external channels.
- Keep confidential information secret and refrain from disclosing any information considered confidential to the third party without proper authorization.
- Those directly involved with financial information and/or other information which may affect the Company’s securities price are prohibited to trade the Company’s securities during a 30-day period prior to the disclosing date of the Company’s operation or the reporting date of its business to the Stock Exchange of Thailand and the Securities and Exchange Commission.
- The first four executives succeeding the President and the Head of Accounting Department shall submit the changes in securities and derivatives holding report within 3 working days in accordance with the SEC’s requirements.
- Refrain or avoid expressing any opinion to the third party or the press in any matter related to the Company without proper authorization.
- Avoid using one’s position and/or information acquired as a result of duty to seek interests for oneself or others.
- Refrain from doing anything or participating in any action or covering anything that might lead to a conflict of interest or that prevents one from performing his duty with fairness or refrain from participating in any illegal cover-up operation.
- Not demanding and accepting gifts, favors or any benefits from business partners, vendors or any third parties who related to the company business unless on appropriate occasions and the gift with a monetary value not exceeding 3,000 baht. In the event that refusal to accept gifts or other benefits is not appropriate, the disclosure of acceptance should be done, and the gifts must be delivered to Good Governance Office.
- Those involving in negotiating a business deal worth more than One Hundred Thousand Baht are required to reveal his personal relationship and a couple and closed relatives according to the personal relationship disclosure form before submitting it to the Good Corporate Governance Center as an expression of opinion to the President and avoided using mobile phone and at least one employee should be presented in such negotiation.
- Any negotiation relating to the bidding shall be discussed at the Company’s premise only unless it is necessary where the Good Corporate Governance Center shall be notified in advance and at least one representative from the Bidding Committee shall attend such negotiation.
- Avoid using or giving any information or indicating any detail about the operation which may prompt any one or several bidder or bidding party to be more advantageous when submitting the tender.
- Perform one’s duty with honesty, fairness, responsibility, commitment and enthusiasm by taking into consideration the Company’s interests.
- Perform one’s duty conscientiously; seeking ways and means to improve one’s performance for higher efficiency.
- Use the Company’s properties for its full benefit; take care to ensure that they are not depreciated or lost; do not use the Company’s properties in any useless meaning to the firm; do not use them for the interest of one’s own or of others.
- Employees are prohibited to participate in any action, or to conceal any action that may possibly lead to a conflict of interest with the Company, or that may prevent employees from fairly performing their duties, or that may lead them to participate in covering any illegal action.
- Encourage a teamwork spirit by providing cooperation and assistance to each other for the benefit of the Company’s business.
- Supervisor must perform his duties to the respect of his supervisees whereby he shall become their role model.
- Treat supervisor with respect; treat colleagues with care and respect of other people’s integrity.
- Pay attention and do everything to ensure that the workplace remains safe and has a good environment.
- Employees are prohibited to unduly use the Company’s information acquired during their performances for their interest or for the interest of others.
- Keep the Company’s confidential information; ensure that no secret document or information is leaked or fell into non-relevant parties which may damage the Company.
- Refrain or avoid expressing opinions to the third party or the press in any matter relating to the Company if one has no authority to do so; this shall include any matter that may affect the Company’s reputation and operation.
- Not demanding and accepting gifts, favors or any benefits from business partners, vendors or any third parties who related to the company business unless on appropriate occasions and the gift with a monetary value not exceeding 2,000 baht. In the event that refusal to accept gifts or other benefits is not appropriate, the disclosure of acceptance should be done, and the gifts must be delivered to Good Governance Office.
- Do not claim others’ work as one’s own.
- Do not use one’s title or position to seek the interest for one’s own or for others.
- Do not do anything that may damage the Company’s image and reputation.
- Notify relevant agencies and the Company’s executives should one find that there is an unusual operation or illegal action going on within the Company.