Understanding their roles and responsibilities to the company and the shareholders, the Board of Directors have studied the 15 item good governance principles and recommendations for directors of listed companies as per guidelines of the Stock Exchange of Thailand. This is to further enhance the company’s transparent operations, business ethics, internal control Meeting on 10 September 2004, the Board formulated a corporate governance policy with the following detailed guidelines and implementation results for the preceding year.
 
(1) CORPORATE GOVERNANCE POLICY

Realizing benefits and importance of the good corporate governance for the enhancement of transparent and efficient management and administration which will create confidence among shareholders, investors and all parties concerned, the Board of Directors set a corporate governance policy as the company’s operations standard and procedures. It covers following principles:
• To treat shareholders and stakeholders equally and fairly.
• To carry out their roles and responsibilities in supervision and management honestly, ethically, prudently and discreetly to achieve the set goals for the maximum benefits of the company and shareholders as well as to prevent possible conflicts of interest.
• To manage the company with transparency under the efficient internal control and audit systems and to disclose adequate information to shareholders and all parties concerned to ensure equal information.
• To control and manage risks to be at levels appropriate to the company’ s business.
• To run the business with honesty under.
 
(2) RIGHTS AND EQUALITY OF SHAREHOLDERS

The Board of Directors shall equally treat and protect rights and benefits of all shareholders, no matter they are majority or minority ones, institute or foreign investors, particularly the rights to access the company’s data and information, to attend shareholders’ meeting, to express their opinions and enquiries in the meetings and to jointly deliberate and vote during the sessions. The Board shall facilitate the shareholders’ meetings in positive manners to encourage equal and transparent treatment for all shareholders.
 
(3) RIGHTS AND VARIOUS GROUPS OF STAKEHOLDERS

All groups of stakeholders shall be treated equally by the Board of Directors, no matter they are shareholders, employees, business partners, customers, competitors, communities in the factory’s vicinity or other stakeholders to ensure that their basic rights and benefits shall be protected and taken care of in accordance with relevant laws and legal requirements with no discrimination towards any particular person or groups just because of personal relationship or benefits.
 
(4 ) SHAREHOLDERS MEETINGS

The Board of Directors gives an importance to shareholders’ meetings as they are basic rights of the shareholders. The meetings shall be organized and run according to the company’s regulations, Public Limited Company Act B.E. 2535, SEC and SET rules and regulations. The Board shall encourage an equal treatment for all shareholders with transparency and simplified handling procedures and facilitate shareholders to exercise their right to attend meetings and to obtain the company’s data and information prior to the sessions. Equal opportunities and time allocations shall be provided for all shareholders to express their opinions and raise any questions during the meeting as per the proposed agenda and issues. The minutes shall be recorded accurately for shareholders’ follow up and examination. The Board shall also require the company’s management team members relating to the agenda and its legal advisors to attend the shareholders’ meetings every time to provide information and address shareholders’ questions and enquiries.

In 2005, the company held the shareholders’ ordinary meeting once and the shareholders’ extraordinary meeting once. It has endeavored to correct shortcomings found in each session and set guidelines to organize the meetings as below.

• Disclosing adequate information for shareholders’ decision making, disseminating to them in advance information and an invitation letter to the meeting as legally required to give them time to study and contemplate the matters prior to the meeting date. • Facilitating shareholders and their proxy to attend the meeting and notification of voting method and counting as well as other relevant meeting regulations they should be aware of.
• Strictly conducting the meeting as per the set agenda and providing a question-answer session for clarification and fairness to shareholders and all parties concerned. Explicitly disclosing voting results of each agenda with details on numbers of voting shares exercised for approval, disapproval or abstention.
• Having shareholders meeting session tape-recorded, taking main contents of enquiries in the minutes for future references and also to enable absentee shareholders to catch up with the relevant details.
• Overseeing and conducting the shareholders meeting in accordance with the company’s regulations, the Public Limited Company Act. B.E. 2535. SEC and SET announcements or regulations.
 
(5 ) VISION AND LEADERSHIP

With and aim to establish the company’s business stability and sustaining success in the long run, the Board of Directors together with the Management team reviewed and adapted the vision and mission to suit changing environments. They stipulated goals, business plans and budgeting, taking into account the highest economic value added and long term stability for the company and shareholders. They supervised and monitored managerial execution to carry out effectively and efficiently as per the set business plan.
Besides, to enhance good governance in the organizational management, the Board of Directors served as a leader to set guidelines on good corporate governance, code of conduct, standards and procedures to approve inter-related transactions with companies or parties with possible conflicts of interest, a clear division of authority between shareholders and the Board, as well as between the Board and the management and committees for balance of power and independent cross-checks.
 
(6 ) CONFLICTS OF INEREST

The Board of Directors shall contemplate inter-relate transactions with possible conflicts of interest among shareholders, Directors, and the management team with discretion, honesty, justifications and independence within an ethical framework. This includes complete disclosure of information for the company’s benefits as a whole in strict conformity with guidelines and methods in SET announcements and regulations. Observations by the Audit Committee on necessity and appropriateness of the transactions shall be included.
The Board of Directors regulated measures and procedures to approve inter-related transaction with related companies or parties with possible conflicts of interest, not allowing parties with director or indirect conflicts of interest to take part in deliberating the transactional item. The Audit Committee was required to jointly contemplate and make observations on necessity and justifications of the items for the company’s maximum benefits. It was also regulated that the disclosure of the transactional items be included in the Notes to the Financial Statements in the annual report as per the generally accepted accounting practice and an annual information disclosure form (Form 56-1).
 
(7) BUSINESS ETHICS

The Board of Directors shall monitor and supervise the company’s business operations, and execution of duties by the Directors, management team and employees to conform with business ethics, apart from the company’s rules and regulations and pertinent legal framework.
The Board of Directors had the company’s code of conduct for the management and employees to refer to as guidelines in as execution of their duties with consistent and stringent compliance. The code covers business execution with honesty, equal and fair treatment to stakeholders, conflicts of interest, confidentiality, and an abuse of information as well as receipt of gifts and rewards. The Internal Audit Department was assigned to monitor and examine compliance with the stipulated codes.
The Board of Directors has a policy for the Executive Directors and employees to avoid or abstain from trading the company’s shares for one month prior to a revelation of the company’s information, i.e. financial data and so on, to the public that may have effects on share prices.
 
(8) BALANCE OF POWER FOR DIRECTORS WITHOUT MANAGEMENT AUTHORITIES

The structure of the Board of Directors should comprise directors without management authorities and independent directors of not less than 60% of the total members. Of this, at lease 3 directors shall be independent directors and audit committee members. As at 31 December 2005, the Board consisted of 14 member as follows:

• Directors with management authorities 3 member (or 21%)
• Directors without management authorities 6 member ( or 43%)
• Independent Directors 5 member ( or 36%)


The directors without management authorities and independent directors totaled 11 or 79%, more than a half which was enough to balance with directors with management authorities, thus enabling the Board to deliberate independently.
 
(9) INTEGRATION OR SEGREGATION OF POSITIONS FOR MANAGERIAL BALANCE OF POWER

The Board of Directors clearly divided scopes of roles and responsibilities among Board of Directors, Executive Committee, Audit Committee and the Chief Executive Officer (CEO) with a clear stipulation that the Chairman of the Board shall not be the same person as the Chairman of the Executive Committee or the CEO and shall not have any relationships with any executive or management team. This is to prevent any executive to have unlimited power and to enable managerial balance of power and cross-checking.
 
(10) REMUNERATIONS FOR DIRECTORS AND THE MANAGEMENT

The Board of Directors shall be responsible for regulating criteria on remunerations for Directors in accordance with a resolution of the shareholders’ meeting and have the Executive Committee regulate fair, appropriate and motivating remunerations for the Chief Executive Officer based on his/her performance appraisal and the company’s operating results. The Executive Committee shall also stipulate policies on the company’s salary structure and compensations as well as reveal information on remunerations for the Directors and Management Team in the Annual Report.
The 2005 Shareholders’ Ordinary Meeting on 29 April 2005 regulated the maximum amount of not over Baht 10 million annual remunerations to the Board of Directors and assigned the Board to scrutinize a detailed allocation as deemed appropriate. In this regard, the 3/2005 Board Meeting on 20 May 2005 resolved that any Director with a managerial position who received a monthly remuneration in the form of salary not be entitled to any remunerations for Directors.
 
(11) BOARD OF DIRECTORS’ MEETING

The Board of Directors is required to convene at least 4 times a year, and each meeting shall be conducted as per the company’s regulations, the Public Limited Company Act B.E. 2535 as well as SEC and SET regulations. The Chairman of the Board as the chairman of the meeting shall promote prudent discretion and allocate appropriate time for the Management to present any matters and adequate time for Directors to comprehensively discuss on key issues thoroughly and carefully. Minutes of each meeting shall be taken to enable Directors and parties concerned to check. All Directors are required to attend the every meeting except there are sound reasons for their absence.
In 2005, the Board of Directors convene 10 times, the meetings were strictly organized and conducted as per the company’s regulations, as well as the Public Limited Company Act. B.E. 2535. Agenda and relevant information were disseminated to the Directors for their study and contemplation approximately 7 days prior to the meetings. During each session, the Board members were given opportunities to comprehensively discuss key issues thoroughly. The secretary to the Board and legal advisors attended the session and took minutes which also included enquiries and the Board’s suggestions for future references of the Board and parties concerned. Details on attendances of the Board at the meetings is 2005 were listed below.
 
(12) COMMITTEE

The Board of Directors appointed committee(s) to assist it in studying, monitoring and controlling the operations and screening their respective assignments with distinct scopes of roles and responsibilities. Currently, 2 committees have been appointed.
1) The Executive Committee comprising 7 directors
2) The Audit Committee with 3 year service term, comprising 3 members, each of them is an independent director. Criteria on the committee selections are as follows:
• Holding not over 5% of overall voting shares in the company, subsidiaries, affiliations or any parties with possible conflicts of interest (including related persons as per Clause 258 of the Securities and Exchange Act B.E. 2535). • Having no participation in management not employment, advisors receiving regular monthly salary nor having controlling authorization in the company, subsidiaries, affiliations or any parties with possible conflicts of interest at least for one year.
• Having no business relationship, direct or indirect stakes in financial and managerial areas in the company, subsidiaries, affiliations or any parties with possible conflicts of interest in manners to lose their independency.
• Having no close kinship with the management, the major shareholders of the company, subsidiaries, affiliations or any parties with possible conflicts of interest nor being appointed a representative to protect benefits of the major shareholders or Directors.
• Being competent to perform their duties, to voice out comments or to report results of any tasks assigned by the Board of Directors with independence and not being under control of the management nor the company’s major shareholders or related parties or close kins of the afore-mentioned persons.
 
(13) INTERNAL CONTROL AND AUDIT SYSTEMS

With an emphasis on efficient internal control and audit systems both in management and operational levels, the Board of Directors and the Executive Committee are directly responsible for organizing and maintaining the internal control system and assessing an adequacy of the system in 5 areas, namely, organizational control and environment protection measure; risk management measure; management control actives; information and communication measure; and monitoring. Of this it is included a stipulation of business direction and follow up, development of information and communication system to support decision making, regulation of scopes of roles and authorization amount for each managerial level, provision of distinct standard and procedure manuals for each function, execution of duties in compliance with the code of conduct, controlling measures and procedures for inter-related transactions between the company and parties with possible conflicts of interest, and adoption of generally accepted accounting practice policy in which external auditors have independence to make observations and access to significant data.
Apart from having set up an internal audit department to audit in the areas of finance and operations, the company commissioned external legal advisors with expertise in particular areas to supervise compliance with rules, regulations and pertinent legal requirements to ensure that the company’s operations and key activities were efficiently executed in the stipulated direction. To enable the internal auditors to independently perform for an organizational balance, the Board of Directors has the Internal Audit Department to directly report to the Audit Committee and the Board of Directors. In 2005, the Audit Committee convened 6 times to review justifications of inter-related transactions, adequacy of internal control systems. They also met with the external auditors to examine financial statements and deliberate reports on disclosure of financial data in the financial statements and to scrutinize an annual auditing plan as well as to monitor results of the internal audits.
 
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