The Erawan Group is managed on
the principle of good corporate governance
The Board of Directors has announced a Corporate Governance (CG) Policy with commitment to pursue our business on the CG principle on the basis of legal compliance, integrity and the Code of Conduct where information is disclosed with a transparency and internal control system and mechanism is put in place to reassure confidence among shareholders, financial institutions, business partners and all stakeholders.
The Company focuses on operating the hotel business by earnestly giving priority to Environmental, Social and Corporate Governance and is ready to strengthen the business and to be stable and sustainable regional recognition.
In 2023, the Company has been awarded the “Excellent” for Corporate Governance Rating by Thai Institute of Directors (IOD) and the “Excellence – Recommended as a Role Model” for AGM Checklist 2023 by Thai Investors Association. We also passed the selective criteria required for inclusion in the SET ESG Rating 2023 and received the Certificate of Recognition of A-Level among the Group of Listed Company that have market capitalization between 3,000-10,000 billion baht in Service Industry which organized by The Stock Exchange of Thailand.
The Company also has the greater development in earnest setting the Anti-corruption Policy that consists of reviewing the Anti-corruption Policy on 9 August 2023, determining the Standard Operating Procedure for Anti-corruption Policy and issuing the Facilitation Payment and Revolving Door Policy.
Directors, executives and all staff have a good understanding and acknowledgement of the Corporate Governance policy, Code of Conduct and Anti-corruption policy. Internal Audit Division also has been assigned to monitor and survey customer satisfaction and to prevent all forms of corruption. In addition, the Company actively raises awareness by communicating with employees through company’s website and continues organizing internal training to share corruption knowledge. In 2023, The Company provided an internal training on the topic of “We Prompt Anti-Corruption” to raise awareness and knowingly of fraud and corruption to staff and has formatted it as the Orientation Training Program for the new staff.
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 regularly updated and was distributed to director, executive officers and staff for implementation to ensure our success with integrity and also to promote our corporate culture and ethical performances based on our motto of “Success with Integrity”. Code of Conduct is a mechanism to ensure that our directors, management and staffs commit to their responsibilities to all stakeholders.
Please see details at “Code of Conduct”
Board of Director’s Structure
The Company has set the qualifications of our directors not only are in line with the SET’s requirements, but also are much more intensive. The Director’s office terms is three years each term with clear scopes of work and with power being balanced between non-executive directors that included the Chairman of the Board and the President isn’t the same person where their roles, authority and responsibilities are clearly separated to maintain balance between managing and supervising function.
The Board has appointed the sub-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 sub-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.
As of 31 December 2023, The Board of Directors is comprised of twelve members and has appointed four sub-committees of which the term of office is 3 years from the appointment at the Annual General Meeting of Shareholders. At the AGM of Shareholders, one-third of all directors shall resign by rotation. The resigning directors may be re-elected.
Board of Director’s Composition
Board Skill Matrix
The Board of Directors has participated in establishing the policy and practice guideline of the executives which must cover to their core duties and responsibilities by allowing the management to independently establish the management strategic plan that align to objective and mission of the company then propose for the Board of Director’s approval.
Sub-committees are as follows:
1) 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 Internal Audit Division of the company, to approve the appointment, transfer or termination of head of division who works as its secretary, to review the legal compliance, to select, appoint, remove and propose an auditor and audit’s fees and to review and disclose information about connected transactions to meet the criteria in an accurate and transparent manner.
2) The Executive Committee consists of 6 members and is responsible for considering and formulating the business plan and long-term strategy of the Company to propose to the Board of Directors for final approval, supervising investment projects, reviewing the risks associated with the project. To ensure that the risk management policy covers all relevant risks and the mitigation strategies are being implemented effectively. In addition, to review the risk management framework and risk appetite of the company.
3) The Nominating and Corporate Governance Committee consists of 3 non-executive directors 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 whether directors, executive officers and staff of all levels will comply with the Good Corporate Governance practices and Code of Conduct.
4) The Management Development and Compensation Committee consists of 3 non-executive directors 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.
There also were the appointment of sub-committees at the management level to support the management performance in accordance with the good corporate governance principle. The sub-committees are as follows:
1) The Risk Management Committee consists of 8 executives and is chaired by Mr. Youssef EL KHOMRI, Director and President. The committee is set up to systematically review risk management plans as well as to monitor and establish risk management directions and to introduce mitigation measures. In addition, to manage crises and respond promptly to potential risks that may arise both proactively and reactively.
2) The Sustainability Development Committee consists of 11 executives and is chaired by Mr. Youssef EL KHOMRI, Director and President. The committee is set up to drive sustainability-related policies and practices with flexibility and effectiveness corporate wide. The Sustainability Development and Corporate Communication Division and other business units and/or departments that are assigned by the Committee will drive corporate sustainability practices at operational level.
3) The Data Protection Committee consists of 7 executives who hold the Head of Division position in order to provide supervision and drive data privacy and protection policy to be efficient throughout the organization and to robust the personal data privacy and security program to meet obligations under the Personal Data Protection Act and sub-regulation. The company appointed Ms. Suvimon Rojkangsadan, Director of Risk Management Division, to be a Data Protection Officer (DPO).
Role and Responsibilities of the Board of Directors and the Sub-Committee
Please see details at “Roles and Responsibilities”
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 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 head of management team.
At every board meeting, no fewer than 7 directors must attend the meeting to form a quorum. To adopt a resolution, no fewer than two-thirds of the entire committee must be present at the meeting. For an approval resolution to be adopted, directors accounting for no fewer than half of the quorum shall vote for the agenda. In case of tie, Chairman of the Board shall have a casting vote. All committee meetings must be attended by no fewer than two-thirds of all committee members to form a quorum. Any adopted resolution shall come from no fewer than half of the attending committee members.
In 2023, the Company convened 7 Board of Directors’ meetings, 7 Audit Committee’s meetings, 8 Executive Committee's meetings, 2 Nomination and Corporate Governance Committee’s meetings and 2 Management Development and Compensation Committee’s meetings. On every meeting, the minutes of the meeting were kept in writing at the Company Secretary and Corporate Governance Division and on a data server for easy access by internal stakeholders.
In addition, the Board of Directors provided the meeting between Independent Directors and company auditors for frankly questioning and acknowledging the information related to the limitation or obstacle during performing the task during the Audit Committee Meeting No. 7/2023 on 14 November 2023. The company auditor reported that no obstacles occurred during their review and verification of the company financial statement. There also, the Board Meeting without the presence of top management and the management one level below top management in the Board of Director Meeting No. 7/2023 on 28 November 2023 to provide an opportunity for Independent Directors and Non-Executive Director to openly express their opinion on the performance of the Company managements. There was no record of such opinions in the minutes of the meeting.
The 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 can review and improve their own conduct. The evaluation form is developed from the form issued by the Corporate Governance for Capital Market Department of the Stock Exchange of Thailand (SET) which was applied to suit our business nature and to cover performances of the Board of Directors and the Sub-committees.
The forms that we have used consist of the following:
- Evaluation form of the Board of Directors’ performance.
- Evaluation form of four Sub-committees’ performance.
- Evaluation form of Director’s self- assessment
2023 Board of Directors’ Evaluation Result
As for the Board of Directors’ evaluation performance in 2023, 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 the right check and balance. The opinion that directors did understand their roles and responsibilities and that they were independent when making decisions 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 have an adequate understanding on the nature of the business.
The Board of Directors has formulated several business strategies and has a strong determination to develop a sustainable business by developing processes to create and develop the concept of responsible business practices for all stakeholders: namely, shareholders, employees and families, customers, suppliers, suppliers, competitors, public sector, the communities, the society and the environment.
The Nomination of Directors
The Board entrusts the Nominating and Corporate Governance Committee to review the structure of its Board of Directors, identify qualifications of each position, nominate qualified persons as a director, raise awareness among directors, executives and staff of the importance of CG principles and, finally, comply with the CG principle in a tangible manner that effectively reflects its corporate culture.
The Nominating and Corporate Governance Committee’s members shall refrain from expressing an opinion to certify one’s own qualifications for self-appointment. Nominated directors shall have the least all qualifications stated in The Erawan Group Plc’s Director Qualifications. They must be knowledgeable and have relevant experiences proven beneficial to the Company’s operation. They shall never be expelled or removed due to corruption. Nor shall they be imprisoned for an offence relating to corrupt acquisitions. Nominated directors shall not conduct business in other juristic persons having the same business as and competing with the Company’s business in accordance with the nomination criteria and procedures prior to being proposed to the Board’s meeting. The Board will then seek approval from the Annual General Meeting of Shareholders (AGM) to appoint such directors.
Initial verification of qualifications of a nominated person is carried out to ensure that he/she is qualified according to the Company’s Director Qualifications, of which requirements are above the SEC’s minimum qualifications. Verification is also carried out whenever a director resigns on rotation and is subject to re-election so that the nominated person can be proposed for appointment from the AGM. Performance evaluation of a relevant director while in the office will be independently reviewed on a person-by-personal basis without intervention from a particular person.
At every AGM, not less than one-third (1/3) of the directors shall retire as per the Company’s Articles of Association. To elect a director, shareholders may vote on an individual basis through a ballot where shareholders shall exercise the entire votes, they currently have to elect a nominated candidate on a one-by-one basis. After the appointment, the management organizes a briefing session to introduce the Company’s business direction and corporate strategies to the new directors.
The Nomination of Executives
The Board entrusts the Management Development and Compensation Committee to nominate and prepare a succession plan for its President, which is another individual separating from Chairman of the Board to prevent any disruption of performance that could affect its business. For other management positions, it’s the duty of executives along the chain of command to oversee HR development and mentoring to establish a succession. Consideration is made to executives up to three levels down from executive vice president, i.e. to the level of department head, to decentralize a decision-making process, incentivize participation and retain qualified talents.
The Remuneration
The Remuneration of the Directors
The Nomination and Corporate Governance Committee is tasked to establish a director’s remuneration policy. Remunerations are reviewed for its reasonability on the basis of scopes of work, roles and responsibilities, financial status and the Company’s operation results before benchmarking with peers in the same industry enjoying similar revenues. The remuneration is paid in three forms: retainer fees, meeting attendance fees and bonuses. However, a sub-committee member will receive additional remuneration based on his/her increasing responsibility. The remuneration will be proposed for the AGM’s approval annually.
The Remuneration of Executives and Employee
The Management Development and Compensation Committee is tasked to evaluate the President’s performance in four areas: finance, customer’s satisfaction, internal process and HR and corporate development, as part of the remuneration structure and annual payment review for executives and employees.
President reviews executives’ remunerations through the following two evaluation processes.
1. BSC (Balance Score Card): Strategic priorities of a particular department is evaluated against the organization’s overall strategies through a process that links three levels of strategies, namely, corporate strategy, department strategy and unit strategy with one another.
2. CSB (Competency Skill Behavior): A supervisor evaluates an individual using thematic evaluation based on the Company’s policy and therefore may be different for each staff depending on his/her qualification requirements. To ensure that the evaluation is effective and that inputs from colleagues at various levels are also received as part of the evaluation, the assessment is done in 360 degrees where a supervisor evaluates a supervisee and vice versa. A self-evaluation is carried out at all levels. The results of the two evaluations are implemented to establish the sharing of the Company’s overall returns among staff at the department, section and unit levels.
Please see details at “Sustainability Development”
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.