SECTION 3: NOMINATION AND APPOINTMENT PROCESS

70 | Nominating Committee Guide Case Study 3B-2 Common Directors Serving on the Same Board Committees This case study illustrates the advisability and risks of having common directors on the same Board Committees. Context Company DEF currently has six directors on the Board. Three are IDs, two are NI-NEDs, and one is an ED. According to the Companies Act on the requirement of the AC composition and the Code on the guidance of the NC and RC composition, the NC, AC and RC should each comprise at least three directors, the majority of whom should be independent. To meet the requirements of the Code, the Board has appointed the three IDs to serve on the NC, AC and RC as either member or Chairman. The compositions of the three Board Committees are as follows: *Director F is the Board Chairman. Q: Should there be any concern about director independence since: • Each of the three Board Committees (i.e. AC, NC, RC) has at least two common directors who sit on other committees. • The common directors are on the same Board Committees and contribute to the majority of the relevant Board Committees? NC AC RC Director B (ID) Chairman Member Director C (ID) Member Chairman Member Director D (ID) Member Chairman Director E (NI-NED) Member Director F* (NI-NED) Member Director G (ED) Member