| The company discloses in its annual report how the assessments of the Board, its board committees and each director have been conducted, including the identity of any external facilitator and its connection, if any, with the company or any of its directors. |
A. Explanation
This Provision sets out the key disclosures of how the board assessments have been conducted.
Following Provision 5.1, this Provision provides for the disclosure of how the assessments of the Board, Board committees and the individual directors were conducted.
An important principle of evaluation is the objectivity and independence of the evaluator. However, this is difficult for board evaluations as they are largely self-evaluations. In this regard, the use of an external facilitator who can provide objectivity, benchmarks, alongside perspectives and insights that are not otherwise available internally, is crucial. It is, of course, equally important that the external facilitator is independent of the Board and the directors being evaluated.
In this regard, the Provision also provides for the disclosure of the identity of the external facilitator, and any relationship it has with the company and any of the directors.
B. Practice Guidance
C. Related Rules and Regulations
- Nil.
D. CG Guides
- NC Guide 8.2: Disclosure Requirements [Disclosure Requirements].
E. Related Articles
- “Board Evaluation: More Can be Done” by Yvonne Goh. (463KB)
- “The Importance of Evaluating the Board” by Philip Forrest. (457KB)
- “Making ‘Ownself Check Ownself’ Work” by Willie Cheng. (148KB)