Corporate Governance - Singapore Technologies Engineering

During the year, Mr Tan Guong Ching, an independentdirector, retired at the Company’s Annual GeneralMeeting (AGM) upon the expiry of his term ofoffice and did not stand for re-election. Mr Tan wasChairman of the Business Investment and DivestmentCommittee and a member of the Executive Resourceand Compensation Committee (ERCC). He had servedon the Board since its inception in 1997 and theBoard and management are deeply appreciative ofhis unstinting support and contributions. Mr Tan’sassociation with the company began in April 1992when he was appointed to the Board of SingaporeTechnologies Marine, a subsidiary of ST Engineering.Mr Lim Chin Beng succeeded Mr Tan as Chairman(co-opted) of the Business Investment and DivestmentCommittee on 15 July 2004.The Board held a total of four meetings during theyear, two of which, in accordance with its planningcycle, were for the approval of the FY2003 resultsand release of half year results. Two special Boardmeetings were held to specifically consider the businessgrowth strategies of the Group.Board Committees (Principles 4, 7 and 11)Supporting the Board are the following BoardCommittees:• Audit Committee• Business Investment and Divestment Committee• Executive Resource and Compensation Committee• Nominating Committee• Budget and Finance Committee• Research, Development and Technology Committee• Senior Human Resource Committee• Risk Review Committee• Tenders CommitteeThe composition of the Board Committees is found onpage 31.Board Selection, Training and Evaluation ofPerformance (Principles 4 and 5)The Nominating Committee is responsible foridentifying and selecting new directors and the reelectionof directors due for retirement by rotation atthe AGM. Its members are Mr Peter Seah (Chairman),Dr Philip Pillai and Mr Venkatachalam Krishnakumar.The Nominating Committee has the same membersas the ERCC. This is because both committees sharesimilar objectives of searching for talent and expertiseto enrich the Board and to strengthen management.During the year, four Nominating Committeemeetings were held to approve the format of anannual independent questionnaire for independentdirectors, adopt a Directorship Review Policy andreview the membership of the Board and BoardCommittees in the Company and its key subsidiaries.The Committee decided not to fix a term of office fordirectors. Instead, it provided for a regular reviewof the Board composition to ensure that suitabledirectors are appointed to address the relevant industryand business needs of the Company and its keysubsidiaries. The Committee determined that the Boardis of an appropriate size to meet the objective ofbringing a balance of skills and experience to bear onthe deliberations of the various Board Committees. Anexpertise considered useful as a criterion for selectionto the Board was “knowledge of security” in thecontext of the nature of the Group’s business.Informal reviews of directors of the Board areundertaken by the Nominating Committee when adirector is due for retirement and re-election.At each AGM, one third of the directors with thelongest term in office is required to retire and submitfor re-election. Mr Venkatachalam Krishnakumar,Dr Philip Pillai, Mr Lucien Wong and Mr Tan PhengHock will retire and submit themselves for re-electionat the Company’s forthcoming AGM under Article 98 ofits Articles of Association.25TheEnterpriseInstinct