SECTION 3: NOMINATION AND APPOINTMENT PROCESS

Section 3: Nomination and Appointment Process | 43 3.4.7 When assessing the balance between EDs, IDs and NI-NEDs, the requirements under the Companies Act, the LR, and the Code should be kept in mind. For example: • The Board should comprise a majority of Non-Executive Directors 12 . • There must be at least two IDs 13 , and IDs must form at least one third of the Board 14 . However, IDs should make up a majority of the Board where the Board Chairman is the is not independent 15 . The Board Chairman is not independent when 16 (i) he is not an ID, (ii) he is also the CEO, (iii) he and the CEO are immediate family members 17 , (iv) he has close family ties with the CEO 18 as determined by the NC, or (v) he is part of the management team. • The NC and RC should comprise at least three directors, the majority of whom, including the Chairman, should be independent 19 . All members of the RC should be NEDs 20 . 12 Provision 2.3 of the Code. 13 MR 210(5) and CR 406(3) require at least two NEDs who are independent and free of any material business or financial connection with the company. 14 MR 210(5)(c) and CR 406(3)(c). Effective 1 January 2022. 15 Provision 2.2 of the Code. 16 Footnote 8 of Provision 2.2 of the Code. 17 The term “immediate family” has the same meaning as defined in the SGX-ST Listing Manual, i.e. the person’s spouse, child, adopted child, step-child, brother, sister, and parent. 18 “Close family ties” means a familial relationship between two parties which extends beyond immediate family members and which could influence the impartiality of the Board Chairman (Footnote 8(iv) of Provision 2.2 of the Code). 19 Provisions 4.2 and 6.2 of the Code. 20 Provision 6.2 of the Code. 3A-2 3B-1