FRONTLINE COVER FA 070606 CR2.indd

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frontline technologies corporation ltd
annual report 2006
> corporate governance report (cont’d)
2. Principle II: Board Composition and Balance
The Board comprises three (3) executive directors and five (5) non-executive directors. Four (4) of the non-executive
directors are regarded as independent. The objective judgment of the independent and non-executive directors on
corporate affairs and their collective experience and contributions are invaluable to the Company.
The NC reviews the independence of each director, Board structure, size and composition annually. The NC considers
the current Board size and composition to be adequate and appropriate in view of the nature and scope of the Group’s
operations, and as capable of effective decision-making. The strong and independent element of the Board ensures
that it is able to exercise objective and independent judgment on corporate affairs and that the Board’s decision
making process is not dominated by any individual or small group of individuals. NC also takes the view that the
diverse experience and expertise of the directors of the Board provides the necessary core competencies for meeting
Frontline’s performance targets.
3. Principle III: Chairman and Chief Executive Officer
Mr Steve Ting Tuan Toon and Mr Lim Chin Hu are the Chairman and Chief Executive Officer (“CEO”) of the Group
respectively. The role of the Chairman and the CEO are separate to ensure an appropriate balance of power, increased
accountability and greater capacity of the Board for independent decision-making. The Chairman and CEO are not
related to each other.
The Chairman is the founder of the Group and continues to play a pivotal and significant role in developing the
Group’s businesses. The Chairman sets the meeting agenda of the Board in consultation with the CEO and exercises
control over the quality and timeliness of the flow of information between management and the Board.
The CEO has executive responsibility for the Group’s business, and oversees the daily operations of the Group’s
operations and is responsible to execute strategies and policies adopted by the Board.
4. Principles IV and V: Board Membership and Board Performance
The NC comprises of three (3) independent directors. During FY06, four (4) NC meetings were convened. The NC
performs the following functions for the Company:
a) Identifies, reviews and recommends candidates for appointment as directors and appointment to the Audit and
Compensation Committees.
b) Re-nominates directors and determine annually the independence of directors.
c) Assesses the effectiveness of the Board as a whole.
d) Recommends directors who are retiring by rotation to be put forward for re-election.
All directors are required to submit themselves for re-election at regular intervals in accordance with Frontline’s articles
of association. Nominees for directorship and directors seeking re-election are required to submit themselves to
review by NC who will thereafter consider their suitability in line with the requirements of the Company.
The NC also evaluates the performance of the Board as a whole as well as each director’s contribution to the
effectiveness of the Board. This assessment process takes into consideration, inter alia, frequency of meetings,
directors’ independence, quality of decision making and quality and timeliness of board papers. The NC also
considers other performance criteria as set out in the Code, including the performance of the share price of the
Company. Individual directors were evaluated based on their attendance record at meetings, functional expertise and
contributions.