Policy of Corporate Governance
PDI conducts its business in compliance with “The Principles of Good Corporate Governance,” published in 2012, and outlined by the Stock Exchange of Thailand. In doing so, we at PDI have demonstrated our commitment to these accepted standards and have fostered the confidence of our employees, our investors and all stakeholders involved in our operations and business endeavors.” Our Audit Committee, by means of the “Internal Audit Department”, supervises financial statements, internal control and practices of good corporate governance to ensure compliance with our vision, values and policies. PDI has also endorsed a Code of Conduct including an Anticorruption Policy to which all executives and employees are assumed to comply with, in conducting business and business related affairs. We have installed a Nomination and Remuneration Committee to supervise the process of director nominations and to recommend fair and reasonable annual remuneration for the Board of Directors, the subcommittees and the top executives. To ensure efficient and productive business operations, a Strategic Committee has also been established to oversee our strategic plan, prior to giving recommendations to the Board of Directors.
The Company has proceeded in other areas as well, in an effort to be recognized by all our stakeholders as ensuring good corporate governance as enforced by the Stock Exchange of Thailand.
(1) The structure of the Board of Directors consists of three Subcommittees as follows:
1) The Audit Committee
The Audit Committee was first established on December 22, 1998. At present it consists of three directors:
|1. Mr. Vinai Vamvanij||Chairman|
|2. Mr. Aswin Kongsiri||Member|
|3. Mr. Karel Vinck||Member|
|Dr. Surin Tanticharoenkiat||Secretary to the Audit Committee|
In 2016, the committee held four meetings in order to perform its duties as stipulated in the Audit Committee Charter, and the proceedings from each meeting were reported to the Board of Directors. Additionally there were also several additional meetings between the committee members and the external auditors.
In 2016, Audit Committee Charter has been revised regarding objectives and responsibilities in order to monitor compliance with Anti-Corruption Policy and review reported concerns about fraud or corruption that was proposed in the Audit Committee Meeting no.04-2016 and Board of Directors’ Meeting no.06-2016 on 7 November 2016.
The Scope of Authority of the Audit Committee
- To have the authority to request any information it considers relevant to its activities from the managing director and/or any managers of the Company.
- To seek independent professional advice as it deems necessary.
- To abstain from executive powers with regard to its findings and recommendations.
Duties and Responsibilities of the Audit Committee
- To review the Company’s financial reporting process to ensure that it is accurate and adequate.
- To review the Company’s internal control system and internal audit system to ensure that they are suitable and efficient, and to determine an internal audit unit’s independence, as well as to approve the appointment, transfer and dismissal of the chief of an internal audit unit or any other unit in charge of an internal audit.
- To review the Company’s compliance with the law on securities and exchange, the Exchange’s regulations, and the laws relating to the Company’s business.
- To consider, select, nominate, and dismiss an independent person to be the Company’s auditor, and to propose such person’s remuneration, as well as to attend a non-managerial meetings with an external auditor at least once a year.
- To review the Connected Transactions, or the transactions that may lead to conflicts of interests, to ensure that they are in compliance with the laws and the Stock Exchange of Thailand’s regulations, and are reasonable and for the highest benefit of the Company.
- To prepare, and to disclose in the Company’s annual report, an audit committee’s report, which must be signed by the audit committee’s chairman and consist of at least the following information:
- (a) Opinion on the accuracy, completeness, and Credibility of the Company’s financial report.
- (b) Opinion on the adequacy of the Company’s internal control system.
- (c) Opinion on the compliance with the law on securities and exchange, the Stock Exchange of Thailand’s regulations, or the laws relating to the Company’s business.
- (d) Opinion on the suitability of an auditor.
- (e) Opinion on the transactions that may lead to conflicts of interests.
- (f) The number of the audit committee meetings, and the attendance of such meetings by each committee member.
- (g) Opinion or overview comment received by the audit committee from its performance of duties in accordance with the charter.
- (h) Other transactions which, according to the audit committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s board of directors.
- To monitor the risk management process.
- To monitor compliance with Anti-Corruption Policy and review reported concerns about fraud or corruption.
- To perform any other act as assigned by the Company’s board of directors, with the approval of the audit committee.
- Report any matter to the board that the audit committee considers appropriate.
2) The Executive Committee
The Executive Committee was established on November 10, 2015 and at present consists of six members:
|1. Mr. Sadawut Tachaubol||Chairman of the Executive Committee|
|2. Mr. Tommy Tachaubol||Member|
|3. Ms. Prapa Puranachote||Member|
|4. Mr. Aswin Kongsiri||Member|
|5. Mr. Vinai Vamvanij||Member|
|6. Mr. Francis Vanbellen||Member|
|Dr. Surin Tanticharoenkiat||Secretary to the Strategic Committee|
Authority and Responsibilities
The Committee shall have, and may exercise, the powers of the Board in the management and direction of the business and affairs of the Company in between full meetings of the Board, as determined by the Board, in line with the Company’s certificate of incorporation or by-laws, each as amended and in line with applicable law or regulations.
The Committee shall maintain minutes of meetings and activities. It shall provide the Board a summary of the matters discussed and decisions taken at each meeting. The Committee minutes shall be presented to the Board at the next Board meeting for acknowledgement and approval.
The Committee shall have the authority to obtain advice and assistance from internal or external legal, accounting or any other advisors and to approve the fees and other retention terms related to any such external counsel, consultants or advisors.
The Committee may form and delegate authority to subcommittees when appropriate.
The Committee shall annually review its own performance.
In 2016 the committee held two meetings and reported to the Board of Directors.
3) The Nomination and Remuneration Committee
The Nomination and Remuneration Committee (NRC) was established on February 25, 2005 and at present consists of three members:
|1. Mr. Aswin Kongsiri||Chairman, Independent Director|
|2. Mr. Pinit Vongmasa||Member, Independent Director|
|3. Mr. Tommy Taechaubol||Member, Director|
|Dr. Surin Tanticharoenkiat||Secretary to the Nomination and Remuneration Committee|
In 2016 the committee held three meetings and reported to the Board of Directors.
The Scope of Authority of the Nomination and Remuneration Committee
- To set the criteria and process of nominating board members and top executives.
- To set the process to review and assess the performance of the board and top executives.
- To recommend new nominees to the Board to fill positions made vacant by directors who complete their terms or resign.
- To review and recommend to the Board on the hiring of advisers to the Board as it deems necessary.
- To review for the Board the succession plan of the Company’s top executives.
- To recommend fair and reasonable annual remuneration for the Board, the subcommittees, and the top executives.
The Attendance of the Directors on the Subcommittees
|Directors (Attendance/No. of the meeting)||Audit Committee||Strategic Committee||Nomination and Remuneration Committee||AGM|
|1. Mr. Arsa Sarasin||-||-||-||1/1|
|2. Mr. Francis Vanbellen||-||2/2||-||1/1|
|3. Mr. Sadawut Tachaubol||-||2/2||-||1/1|
|4. Mr. Tommy Tachaubol||-||2/2||3/3||1/1|
|5. Mr. Prapa Puranachote||-||2/2||-||0/1|
|6. Ms. Wimol Chatameena 1)||-||-||-||1/1|
|7. Mr. Karel Vinck||3/4||-||-||0/1|
|8. Mr. Vinai Vamvanij||4/4||2/2||-||1/1|
|9. Mr. Aswin Kongsiri||4/4||1/2||3/3||1/1|
|10. Mr. Pinit Vongmasa||-||-||3/3||1/1|
|11. Dr. Kurujit Nakornthap 2)||-||-||-||-|
1) Ms. Wimol Chatameena has been appointed as the director on February 18, 2016.
2) Dr. Kurujit Nakornthap has been appointed as the director on April 25, 2016.
(2) Mr. Vinai Vamvanij is chairman of the Audit Committee. He has knowledge and experience reviewing financial statements of Companies. His background on financial statement reviews are as follows:
|1967-1968||Senior Auditor||Price Waterhouse & Co., Chartered Accountants|
|1963-1966||Audit & Accounting Clerk||R.J. Oehr & Church, Chartered Accountants, Melbourne Australia|
The Selection and the Appointment of Company Directors and Executives
(1) Independent Director
The Nomination and Remuneration Committee will consider from the list of candidates and nominate persons with proper qualification and experiences that can beneficial to the Company.
Qualification of Company Independent Directors
- Holding shares not exceeding five percent of the paid-up capital of the Company, affiliated company, associated company or related company, inclusive of the shares held by any related persons.
- Not taking part in the management of the Company, affiliated company, associated company, related company or majority shareholders of the Company. Not being an employee, staff member or advisor who receives a regular salary from the Company, affiliated company, associated company, related company or majority shareholders of the Company.
- Having no direct or indirect benefit or interest in finance and management of the Company, affiliated company, associated company or majority shareholders of the Company. Having no benefit or interest of the said nature during the period of one year before his appointment as a director except where the Board of Directors has carefully considered that such previous benefit or interest does not affect the performance of duties and the giving of independent opinions.
- Not being a related person or close relative of any management member or majority shareholder of the Company.
- Not being appointed as a representative to safeguard the interests of the Company’s directors, majority shareholders of the Company or those who are related to the Company’s majority shareholders.
- Being capable of performing duties, giving opinions, or reporting the results of performance of work according to the duties delegated by the Board of Directors free and clear of the management or the majority shareholders of the Company, including related persons or close relatives of the said persons.
(2) The Selection of Company Directors and Executives
The NRC, consisting of three independent directors, is responsible for the selection of a qualified person, not subject to the prohibitive characteristics under the law for nomination, to the Board of Directors prior to submitting for final election in the “Annual General Shareholders’ Meeting (AGM)”.
The Company has also allowed the shareholders to submit names of qualified candidates to be nominated for selection as PDI Board of Directors in advance of the annual general shareholders’ meeting through the Company’s website. The Company also refers to the list of qualified candidates released by the Thai Institute of Directors (IOD).
The Selection of Directors by the Annual General Shareholders’ Meeting
The appointment of a director requires a majority vote from the eligible voting shareholders present at the annual general shareholders’ meeting. Voting shall be casted according to the following guidelines:
- Each shareholder shall have one vote for each share.
- Each shareholder must exercise all the votes he has under item (1) to elect one or several persons to be directors, but cannot divide his votes to any person particularly.
- The candidates shall be ranked in order descending from the highest number of votes received to the lowest, and shall be elected as directors equivalent to the number of directors who are to be elected.
- If there is a tie in the last to be elected and this exceeds the said number of directors, the presiding Chairman shall have an additional casting vote.
In the case of a vacancy on the Board of Directors prior to the expiration of the term of office due to death, resignation, or for reasons other than by rotation, the Board of Directors shall elect any person who is qualified and not subject to the prohibitive characteristics under the law as the substitute director at the subsequent Board of Directors meeting, unless the remaining term of office of the said director is less than two (2) months.
The aforesaid substitute director shall retain his office only for the remaining term of office of the director whom he replaces. The resolution of the Board on this matter must receive no less than three-fourths (¾) of the votes from the remaining directors.
At present, of all the Company’s directors, five are independent directors and two are executive directors.
Supervision the Operations of Subsidiary and Affiliated Companies
In the case of a subsidiary company, executives of the Company will be appointed as directors, in proportion of no less than half of the total number of directors, to supervise operations of the subsidiary company so that the subsidiary’s activities are under Company policy.
In the case of an affiliated company, executives of the Company will be appointed as members to the Board of Directors, in proportion to the number of shares held by the Company. As a representative of the Company, the director(s) will receive policy mandates from the Company for the control or supervision of the operations of the affiliated company.
Controlling the Use of Internal Information
The Company has established policies and guidelines to prevent executives and related persons from using internal company information for personal gains. Before the announcement of company results, internal data is restricted to related departments including Accounting and Finance, Investor Relations, Internal Audits, and the Company Secretary. Each quarter, a summary of changes of company holdings (if any) by directors and executives is submitted for review to monitor any use of inside information by executives.
Directors, executives, and employees at all levels are forbidden from using internal data containing crucial information that would have a significant impact on the stock price and has not yet been declared to the public or the Stock Exchange of Thailand for trading to the advantage of self or others. Furthermore, in 2017 the Company has established a policy such that aforementioned parties are to avoid or refrain from trading the Company’s stock for two (2) weeks prior to the last day as required by the Stock Exchange of Thailand to submit financial statements and for 24 hours after the release of the financial statements to SET. (Blackout Period).
1. Audit Fee
The Company and its subsidiaries have paid audit fees to audit companies, individual auditors or other businesses relating to the auditors and auditing companies during the previous fiscal year totaling 4,021,000 Baht.
2. Non-Audit Fee
The Company and its subsidiaries have a general policy not to hire individual auditors or other businesses relating to its auditor for non-audit services.
Compliance with Good Corporate Governance Principles
1. Rights of Shareholders
The Company considers each shareholder equally and stipulates procedures for the shareholders meeting accordingly the law and in compliance with the guidelines of the Stock Exchange of Thailand.
In 2016 the Company organized an annual shareholders’ meeting on April 25, 2016 at the Queen Sirikit National Convention Center, Bangkok. An invitation letter with agenda of the meeting and related documents were sent to the shareholders 7 days prior to the meeting. Topics included the views of the Board of Directors and the review of minutes of the previous meeting. As such allowing shareholders ample time and opportunity to review and consider the topics. The Company accommodated shareholders in a convenient location with appropriately sized meeting space. Shareholder proxies’ were permitted in the event they were unable to attend the meeting. The Company also posted the information regarding shareholders meeting on the Company’s website and shareholders were invited to submit questions related to the Company operations through the website, prior to the meeting.
During the 2016 annual shareholders’ meeting, a total of eight directors attended, including the Chairman of the Audit Committee. The Chairman of the meeting allowed equal opportunity for all shareholders to question, comment, and submitted suggestions regarding Company operations. Prominent opinions were recorded in the minutes of the meeting.
In addition to the annual shareholders’ meeting, the Company will call additional shareholders’ meetings, if necessary, in the event of specific emerging topics, which are pertinent to the shareholders’ interests or relate to laws or regulations that require the shareholders’ approval.
2. Equitable Treatment of Shareholders
The Company treats all shareholders equally and stipulates procedures for the shareholders meeting in accordance to the law and in compliance with guidelines of the Stock Exchange of Thailand. Each shareholder has one vote for each share. Shareholders can send a proxy on their behalf in the event that they are unable to attend.
To prevent conflicts of interest and misuse of inside information for personal gain, the Board of Directors investigates any occasion which may lead to a dispute and has established a policy and guidelines to prevent executives and related persons from using internal company information for personal gains. Company holdings by directors and executives are assessed to screen any use of inside information for gains by executives. In addition, in the Board of Directors meeting no. 01-2017 on February 22, 2017, the company has set a policy that Directors, executives, and employees at all levels are avoid or refrain from trading in the securities of the Company during the two (2) weeks prior to the last day as required by the Stock Exchange of Thailand to submit financial statements and for 24 hours after the release of the financial statement to SET (Blackout Period).
In case of related parties’ transactions, the Audit Committee is responsible for reviewing the related transactions to ensure that no conflict of interest will occur in order to maximize the overall company’s benefits. The Company discloses all necessary information together with Directors’ opinion to the public according to SET regulation.
The Company has established a channel, through the company’s website, to allow shareholders to submit names of qualified candidates to be nominated as board members and to propose an agenda for, and in advance of, the annual general shareholders’ meeting.
3. Role of Stakeholders
The Company maximizes added value for its clients, with respect to its people and the environment. PDI supports the communities in which it operates and gives the best possible return to its shareholders.
Commitment to Shareholders
The Company respects the rights of its major and minor shareholders equally. In alignment with PDI’s vision, the Company commits to profitable and safe operations yielding the best possible return for the benefit of all its shareholders. More details can be found in “the Corporate Social Responsibility (CSR) report section.”
The details of Commitment to Customers & Suppliers, commitment to Employees and commitment to the Community (Local and National) can also be found in the CSR report section.
The Company announced its desire to become an ally of CAC (Private Sector Collective Action Coalition against Corruption) and submitted CAC self-evaluation tool on 13 December 2016 for certification process. It is being reviewed by CAC committee and expected to obtain certification in 2017. However, PDI strictly adheres to anti-corruption policy in order to meet CAC’s requirement and to reiterate its firm intentions as a private company whose business ideals consist of integrity and righteousness.
The Company has dedicated an open channel for receiving complaints regarding corporate governance and the Code of Conduct. This can be done through the secretariat of the Audit Committee or the Chairman of the Audit Committee using the following email: [email protected] All information received will be treated as confidential and properly investigated in a timely manner.
4. Disclosure and Transparency
The Company manages its business with honesty, ethical conduct, and responsibility concerning all stakeholders: customers, employees, shareholders and the general public. The Company issued a Code of Conduct, which gives guidelines for work and employee behavior. All employees use this as a guide for their daily work, along with the influence and inspiration of the vision of the Company. The latest version of Code of Conduct has been revised in 2015.
The Company ensures that important information, both financial and non-financial, as specified in relevant regulations of the SET, is disclosed correctly, accurately, on a timely and transparent basis. In addition to this, the financial report, the annual statement (Form 56-1), and the annual report are available on the PDI website.
The Board of Directors has also called for the disclosure of company information in an accurate, complete, transparent, and widespread manner. As such, all financial information, as well as general information about the Company that might impact the value of company, is readily available. Shareholders and other interested parties can access any such information through the various Stock Exchange of Thailand media outlets or directly from the Company’s website. A specific investor relations function has been established and existing and potential investors can obtain information by contacting the Company directly at Tel: 66(0)2695-9499 or at www.padaeng.com or e-mail inquiries to the Investor Relation Manager at [email protected]
The Company recognizes the importance of internal control systems at managerial and operational levels, and has created an authority manual for reference. An independent internal audit department, reporting directly to the Audit Committee, organizes various internal checks and conducts audits as needed.
5. Responsibilities of the Board
The PDI Board of Directors is responsible for acting in compliance with the by-laws, objectives, and guidelines of the Company, as well as the resolutions of the shareholders’ meeting, with honesty and prudence and in the best interest of the Company. In addition to this, the Board of Directors also makes contributions towards establishing the vision, mission, strategy, objectives, business plans and the budget of the Company. The Board ensures that the management team conducts operations in accordance with the Company’s business plan, in order to add value to its business and ensure sustainability for its shareholders.
The Board of Directors acknowledges that the Company maintains adequate internal controls and that its financial statements as of December 31, 2016 are reliable.
Balance of Authority for Non-Executive Directors
The Company’s Board of Directors consists of qualified directors with a broad realm of experience, totaling eleven members at the end of 2016 as follows:
- Executive Directors: 2 directors.
- Non-Executive Directors: 9 directors;
- Directors major shareholders: 4 directors
- Country Group Holdings Public Company Limited holds 3 seats
- Ministry of Finance holds 1 seat
- Independent directors: 5 independent directors; 3 of which are Audit Committee members.
- Directors major shareholders: 4 directors
Aggregation or Segregation of Positions
The function of the Chairman of the Board of Directors and the Managing Director (MD) are separated to ensure a clear distinction between responsibilities in policy making and managing daily operations. The Company has clearly defined the authority and responsibilities of management at every level.
The Board of Directors annually engages in self-assessment, which enables all board members to consider their overall performance and resolve any potential problems or issues. This serves as a tool for reviewing performance, as well as a way to identify issues and obstacles that each director faced over the past year. It also helps increase the operational effectiveness of the Board. At present, the performance assessment of the Board is conducted using an overall performance method. To facilitate this, the Company has developed an assessment form consistent with the Statement of Corporate Governance Principles and the duties and responsibilities stated in the Board of Directors Charter. In 2016, the results of the self-assessment will be distributed to all board members for acknowledgment and self-improvement in 2017.
Orientation for New Directors and Director Participation in Seminars
The Board of Directors secretary division is responsible for preparing general information and briefing newly elected directors on the actions and procedures of the Company to ensure that they are updated on all Company operations, as well as the SEC and SET regulations and requirements. Site visits will also be available for new directors who would like to have a more in-depth knowledge of Company operations.
In order to keep the directors currently informed on new rules, regulations, and requirements, they are encouraged to attend refresher courses and seminars organized by the Thai Institute of Directors and other relevant organizations.
In 2016, directors and executives of the Company who participated in such courses are listed below:
|1. Mr. Vinai Vamvanij||Independent Director||1. Board that Make a Difference (BMD), 1/2016
2. The Power of Culture: From Performance Culture to Winning Culture, 2016
|2. Mr. Sadawut Taechaubol||Director||1. Corporate Governance for Capital Market Intermediaries (CGI), Class 14/2016|
|3. Mr. Tommy Taechaubol||Director||Corporate Governance for Capital Market Intermediaries (CGI), Class 13/2016|
|4. Ms. Wimol Chatameena||Director||Director Certification Program (DCP), 228/2016|
|5. Ms. Woratip Rerkpiboon||Corporate Vice President Finance||Strategic CFO, Class 2/ 2016|