Corporate Governance

Transparency, accountability and integrity in StarHub’s business practices and culture.

Corporate Governance Statement

StarHub continues to be committed to embrace good corporate governance practices that foster transparency, accountability and integrity. We see this as fundamental for the long-term sustainability of our business and value creation for our stakeholders.

Corporate Governance Report 2015

This report describes our corporate governance framework, policies and practices for the financial year ended 31 December 2015 (FY2015). StarHub has complied, in all material aspects, with the principles and guidelines of the Code of Corporate Governance (Code) issued by the Monetary Authority of Singapore on 2 May 2012.

Board Matters

The Board's Conduct of Affairs

The Board's Role

The Board has oversight of the business performance and affairs of the Group. The Board leads, directs and works closely with Management, with a view to the long-term success of the various businesses of the Group.

The Board takes on the following key roles and responsibilities:

  • Provide entrepreneurial leadership and guidance to Management and steers the Group through its strategy and corporate plan;
  • Ensure that the necessary financial and human resources are in place for the Group to meet its objectives;
  • Establish a framework of prudent and effective controls which enables risks to be assessed and managed in order to safeguard shareholders’ interests and StarHub’s assets. This framework is supported by clear and robust procedures and delegated authorities;
  • Regularly review the performance of Senior Management and the remuneration framework of the Board and Senior Management;
  • Review and approve key operational and business initiatives, major funding and investments proposals, acquisitions and divestments;
  • Recognise that the perceptions of key stakeholder groups affects StarHub’s reputation, identify the key stakeholder groups (which include customers, suppliers, and business partners) and guide Management in StarHub’s strategy and approach in addressing the concerns of these key stakeholder groups;
  • Set StarHub’s values and standards (including ethical standards), to ensure that the Group’s obligations to shareholders and stakeholders are well understood and duly met;
  • Provide guidance on the social, ethical and environmental impact of the Group’s activities and monitor compliance with our sustainability policies and practices; and
  • Ensure the Group’s compliance with all relevant laws and regulations.

Directors, collectively and individually, are obliged to act in good faith and consider the best interests of StarHub and all its shareholders at all times.

The Board has established a framework on authorisation and approval limits for capital and operating expenditure, and specified transactions including acquisitions and disposals of investments, procurement of goods and services, bank facilities and cheque signatories. Within this framework, the Board has set relevant authority and approval sub-limits for delegation to various Management levels to optimise operational efficiency.

Board Committees

The Board has established the following Board committees (Board Committees) to facilitate the discharge of its functions:

  • the Audit Committee (AC);
  • the Nominating Committee (NC);
  • the Executive Resource and Compensation Committee (ERCC);
  • the Strategy Committee (SC); and
  • the Risk Committee (RC).

The composition of the Board Committees and their specific responsibilities are set out in the later sections of this Report.

Additional Board committees may be formed to undertake specific duties, as necessitated by business imperatives.

The Board delegates specific areas of responsibilities to each Board Committee. Each Board Committee is required to operate and make decisions on matters within its terms of reference and applicable limits of authority.

The Board reviews the decisions made by each Board Committee regularly. The respective Chair of the Board Committees updates the Board at Board meetings, on key matters raised and/or decisions made at the last held Board Committee meeting. For any matter requiring the Board’s approval, the Board Committees would recommend the course of action to the Board for its consideration and decision. Minutes of the meetings of the AC, the SC and the RC are also circulated to the Board for its information.

Throughout the financial year, as and when deemed necessary by the Board, additional Board meetings may be convened to consider urgent proposals or matters that require the Board’s expeditious review and approval. StarHub’s Constitution allows Board meetings to be held via audio and video conferencing to facilitate the Board’s decision-making process.

Board meetings for the ensuing financial year are scheduled in advance before the end of the current financial year so that the Directors are able to plan ahead and attend the next year’s Board meetings in their respective meeting schedules.

Board Committee Meetings

Note:
(1) Mr Ma Kah Woh was appointed as a non-executive Director and the AC Chairman with effect from 23 September 2015. He attended the Board meeting and the AC meeting which were held after his appointment.
(2) Mr Teo Ek Tor was appointed the RC Chairman and ceased to be an AC member with effect from 15 July 2015. He attended the RC meeting which was held after his appointment.
(3) Ms Rachel Eng Yaag Ngee was appointed as a non-executive Director with effect from 4 May 2015 and an AC member with effect from 15 July 2015. She attended the Board meetings and the AC meetings which were held after her respective appointments.
(4) Mr Nikhil O.J. Eapen was co-opted onto the SC as a member with effect from 5 August 2015, succeeding Mr Stephen Miller. Mr Eapen attended the SC meetings which were held after his appointment.

Board Orientation and Continual Training & Development

StarHub has a comprehensive induction programme for all newlyappointed Directors tailored specifically for the businesses of the Group. Management conducts briefings for new Directors to familiarise them with the Group’s business activities, strategic directions, financials, policies and governance practices, as well as StarHub’s corporate culture and the key developments in the Group and industry. The induction program includes meetings with the CEO and Senior Management.

To ensure that all Directors have relevant information and up-todate working knowledge of the Group’s business and operations, each Director is issued with a tablet which enables him or her to access the StarHub Board Portal. The StarHub Board Portal is bespoke to provide information in accordance with the guidelines and principles of the Code including:

  • information on Directors’ duties and how to discharge those duties;
  • the contact details of the Board and Senior Management;
  • the terms of reference of the respective Board Committees; and
  • the insider trading policy of StarHub.

The Board encourages the Directors to continually develop and refresh their knowledge and skills, and keep themselves abreast with relevant developments in the Group’s business and the regulatory and industry-specific environments in which the Group operates. The Company Secretary facilitates the arrangement of internal briefings as well as external seminars and trainings for the Directors (including those conducted by StarHub’s panel law firms and the Singapore Institute of Directors in conjunction with SGX-ST). In addition, the Company Secretary also regularly provides updates to keep the Directors abreast with relevant developments, including:

  • Updates on key legal, regulatory, industry and accounting changes which affect the Group, given during Board meetings or via email; and
  • Articles and reports (including industry news and analyst reports) relevant to the Group’s businesses, regularly circulated to the Directors and uploaded on the StarHub Board Portal for their reference.

In addition to the above, the Directors are free to conduct independent or collective discussions with Management and subject matter experts on any area of interest or concern. Where requested, visits to operations are organised to enable Directors to have a clear understanding of issues faced by the Group.

Board Composition and Guidance

As at 31 December 2015, the Board comprises 13 Directors. During FY2015, Mr Steven Terrell Clontz succeeded Mr Tan Guong Ching as the non-executive Chairman, following Mr Tan’s resignation on 15 July 2015 after having served on the Board for 14 years. Mr Clontz is a non-executive Director. Mr Kua Hong Pak also stepped down as the non-executive AC Chairman, and Mr Ma Kah Woh was appointed to assume the role on 23 September 2015. The Board thanks Mr Tan and Mr Kua for their past service and contributions to the Group.

Mr Tan Tong Hai, the Group CEO, remains the sole executive Director on the Board.

The independent Directors on the Board are: Mr Ma Kah Woh, Mr Nihal Vijaya Devadas Kaviratne CBE, Mr Teo Ek Tor, Mr Liu Chee Ming, Mr Robert J. Sachs and Ms Rachel Eng Yaag Ngee, representing more than one third of the Board. The Chairman, Mr Steven Terrell Clontz, is not an independent Director within the meaning of the Code given his executive position at Singapore Technologies Telemedia Pte Ltd.

The individual profile of the Directors and all principal directorships and chairmanships in any listed companies held by the Directors currently and in the preceding three years, are found in the ‘Board of Directors’ and ‘Directors’ Particulars’ sections of the Annual Report.

The NC rigorously reviews the independence of each nonexecutive Director annually, particularly those who have served more than nine years. As at 31 December 2015, four independent Directors of StarHub, namely Mr Nihal Vijaya Devadas Kaviratne CBE, Mr Teo Ek Tor, Mr Liu Chee Ming and Mr Robert J. Sachs have served on the Board for more than nine years. The NC recommends, and the Board takes the view that the key consideration in ascertaining the effectiveness of a Director’s independence is his ability to exercise independence of mind and judgement to act honestly and in the best interest of the Group. When assessing objectivity and independent judgement, the NC and the Board consider, inter alia, the approach, character and attitude of each nonexecutive Director, including whether such Director:

  • is free from any interest and any business or other relationship which could, or could reasonably be perceived to, interfere with the exercise of the Director’s independent business judgement with a view to the best interests of the Group; and
  • has any material contractual relationship with the Group other than as a Director.

After careful rigorous review, the NC recommends, and the Board is of the firm view that Mr Nihal Vijaya Devadas Kaviratne CBE, Mr Teo Ek Tor, Mr Liu Chee Ming and Mr Robert J. Sachs have each demonstrated the essential independence of mind and objectivity of judgement to act in the best interests of StarHub in the discharge of their Directors’ duties, and therefore considers them to be independent.

Any Director who has an interest or relationship which is likely to impact on his/her independence or conflict with a subject under discussion by the Board is required to immediately declare his/her interest or relationship to the Board, remove himself/herself from the information flow, and abstain from participating in any discussion or voting on the subject matter.

Interested person transactions (IPTs) entered into by any of the entities in the Group are governed by the Shareholders’ Mandate for Interested Person Transactions as approved by shareholders each year at StarHub’s EGM, as well as Chapter 9 of the SGX-ST Listing Manual. All IPTs are undertaken on an arm’s length basis and on normal commercial terms. StarHub does not provide loans to Directors. No loans have been provided to the Directors by StarHub. In FY2015, there were no IPTs or related party transactions that can be classified as financial assistance to entities other than wholly-owned subsidiary companies.

The Board, through the NC, annually examines its size and composition to ensure its overall effectiveness. Given the scope and nature of the Group’s operations, the Board is of the view that its current size of 13 is conducive and facilitates effective decision-making. In this regard, the Board has also taken into account the complexity and requirements of the business.

The Board consists of Directors who are business leaders and professionals of high calibre and integrity. They possess a broad range of core competencies and experience in banking, accounting and finance, legal, regulatory, technical, business and industry knowledge, management and strategic planning 54 experience, and customer-based experience and knowledge. The Board, as a group, constantly seeks to maintain an appropriate mix of expertise, experience (both local and international), knowledge, gender, culture and geography. It encourages robust and quality deliberations among the Directors, and mitigates ‘group thinking’ in decision making. The Board enjoys the unique contribution that each Director brings in the development of the overall strategy of the Group by way of alternative perspectives and fresh challenges at discussions. The immense network of contacts across the industry which the diversity provides has proven invaluable to StarHub.

The Chairman and Directors support the CEO in stakeholder engagements, such as with shareholders, business partners and regulators.

In furtherance of their duties, Directors are given access to independent professional advice at StarHub’s expense should they deem such advice necessary. Non-executive Directors meet to discuss, inter alia, Management’s performance, without the presence of Management at least once a year.

Chairman and CEO

In StarHub, there is a clear division in responsibilities between the leadership of the Board and Management. The Chairman and the CEO of StarHub are separate persons, ensuring an appropriate balance of powers, increased accountability and greater capacity for the Board to make independent decisions. No one individual holds considerable concentration of power within the Group. The Chairman is Mr Steven Terrell Clontz. He is a non-executive Director and is unrelated to the CEO. He:

  • leads the Board to ensure its effectiveness on all aspects of its role;
  • sets the agenda and ensures that adequate time is available for discussion of all agenda items, in particular strategic issues;
  • promotes a culture of openness and debate at the Board;
  • ensures that the Directors receive complete, adequate and timely information. He works with the CEO in relation to the Board’s requirements for information to contribute effectively to the Board decision-making process;
  • encourages effective communication with shareholders;
  • encourages constructive relations within the Board and between the Board and Management. As the primary link between the Board and Management, he provides continuity between Board meetings and thereby oversees the effective implementation of the Board’s decisions;
  • facilitates the effective contribution of non-executive Directors; and
  • promotes high standards of corporate governance.

The CEO is Mr Tan Tong Hai. He leads the Management, and is responsible for the day-to-day running of the Group’s business operations and the effective implementation of the Group’s strategies and policies.

The Board does not have a lead independent Director. The NC and the Board are of the view that the appointment of a lead independent director is not necessary as the Board has sufficient independence given that: (a) the Chairman and the CEO are separate persons; (b) the Chairman and the CEO are not family members; (c) the Chairman is not part of the Management team; and (d) the Directors are able to exercise objective and independent judgement.

Board Membership

StarHub has instituted a formal and transparent process for the selection, appointment and re-appointment of Directors to the Board. To this end, the Board has established the NC to lead on this process with written terms of reference clearly setting out its authority and duties.

As at 31 December 2015, the NC comprises the following nonexecutive Directors, who are independent of Management:

  • Mr Peter Seah Lim Huat (NC Chairman);
  • Mr Teo Ek Tor (independent Director); and
  • Mr Sio Tat Hiang.

During FY2015, the NC held three meetings.

The Board notes that the NC Chairman and Mr Sio Tat Hiang are not considered independent within the meaning of the Code given their directorships at STT Communications Limited. However, after due consideration, the Board and the NC are of the view that such appointments do not interfere with the exercise of independent judgement by the NC Chairman and Mr Sio on the Board or prevent them from acting objectively in the best interests of the Group in carrying out their duties. The Board and the NC further note that the NC Chairman and Mr Sio are not involved in the day-to-day running of the Group’s business and operations, and are independent of Management, with a clear separation of role from Management in the deliberations of the NC

In considering each candidate (whether new or for reappointment), the NC considers several factors, including the composition, diversity and progressive renewal of the Board, each candidate’s competencies, commitment, contribution and performance (including attendance, preparedness, participation and candour) and potential conflicts of interest. This is to ensure that an appropriate balance of skills, experience, expertise and diversity is maintained on the Board, enabling the Board to stay engaged and agile in meeting the needs of the Group. External consultants are engaged to assist with Board renewal and selection process as necessary. All new appointments to the Board are subject to the approval of StarHub’s regulators, namely the Info-communications Development Authority of Singapore and the Media Development Authority of Singapore.

In accordance with StarHub’s Constitution, all Directors who are appointed by the Board are subject to retirement at the first AGM of StarHub subsequent to their appointment. In compliance with the Code, all Directors retire from office at least once in every three years. The Directors retiring from office will be eligible for re-election by the shareholders.

The NC reviews and considers the independence of each Director on an annual basis. If the NC considers a Director to be independent, notwithstanding that he has one or more of the specific relationships mentioned in the Code, it provides its view to the Board for the Board’s consideration. Conversely, the NC has the discretion to consider that a Director is not independent even if he or she does not fall within the circumstances set out in the Code, and similarly provides its views to the Board for the Board’s consideration. The NC has considered and is of the view that all the independent Directors are sufficiently independent and are able to objectively exercise their judgement in the interest of StarHub.

Directors with multiple board representations and/or other principal commitments (as defined in the Code) must ensure that they are able to devote sufficient time and attention to the affairs of StarHub to adequately carry out their duties as Directors of StarHub. The NC has reviewed the individual performance of each Director and is satisfied that all Directors have dedicated adequate time to the affairs of StarHub and have properly discharged their duties for FY2015, and will continue to do so in the financial year ending 31 December 2016 (FY2016). Although no maximum limit has been formally set by the Board on the number of listed company board representations a Director with multiple board representations may hold, the NC is of the view that the duties of all Directors have been fully discharged based on the time and attention devoted by each Director, their individual abilities and their respective individual contribution of skills, knowledge and experience and their commitment to the affairs of StarHub.

The Board does not have any alternate Directors. All Directors dedicate their personal time and attention to the affairs of StarHub.

Board Performance

StarHub believes that Board performance is ultimately reflected in the performance of the Group. The NC has the responsibility of assessing the effectiveness of the Board as a whole, and the contribution of the Board Committees and each Director to the effectiveness of the Board.

For FY2015, the Board engaged the assistance of Aon Hewitt Singapore Pte Ltd as independent external consultants to facilitate the annual evaluation process on the effectiveness of the Board and the Board Committees. The evaluation included a review of detailed questionnaires completed by each Director, which invited feedback on key areas such as:

  • the adequacy of the Board composition;
  • the relationship between the Board and Management, including the level of engagement and flow of information;
  • Board processes, including level and timeliness of information provided to the Board;
  • managing the Company’s performance;
  • the effectiveness of Board Committees; and
  • risk management.

The evaluation process also included individual interviews with each Director.

The results of the performance evaluation exercise are collected, analysed and presented to the NC, in consultation with the Chairman. The NC reviews and recommends to the Board the follow-up actions required to strengthen the Board’s leadership so as to improve the effectiveness of the Board’s oversight of StarHub. Where appropriate, Management may also be involved in the review process, and assist in implementing the measures needed.

The awards and accolades that StarHub has received from the investment community are testament to sound corporate governance. The significant awards received by StarHub in 2015, included the Sliver – Best Managed Board in the Singapore Corporate Awards 2015 and the Most Transparent Company Award (Services Category) in the SIAS 16th Investors’ Choice Award.

Access To Information

Management provides the Directors with timely information relevant to matters on the agenda for the meeting at least three (3) business days prior to each Board and Board Committee meeting, except for the sensitive matters which may be tabled at the meeting itself. All sensitive Board materials that are communicated electronically are password-protected to safeguard security. Throughout the financial year, the Board also receives monthly management and financial reports providing updates on key performance indicators and financial analysis on the Group, and regular analysts’ reports and media articles on StarHub and the industry. Collectively, such reports enable the Directors to keep abreast at all times of key issues and developments in the industry, as well as challenges and opportunities for the Group and thereby make informed and sound decisions.

In addition to and independent of the information provided above, Management remains available at all times to answer any query raised by any Director. Frequent dialogue and interaction take place between Management and the Directors. The Directorsare able to access StarHub’s operations and information at a deeper level, allowing them to better strategise and guide StarHub in their role as Directors.

Furthermore, the StarHub Board Portal allows Board members to securely access and read Board/Board Committee papers and materials electronically at any place and any time, using tablet devices provided by StarHub.

The Directors have separate and independent access to the Company Secretaries. The Company Secretaries are trained in legal and company secretarial practices. They attend all Board meetings and are responsible for ensuring that board procedures are followed and that applicable rules and regulations are complied with. Under the direction of the Chairman, they facilitate good information flows within the Board and its Board Committees, between the Board and Management, and advise the Board on all legal and governance matters. The Company Secretaries also facilitate the orientation of new Directors and assist in arranging professional development and training for Directors as required. The appointment and the removal of the Company Secretaries are subject to the Board’s approval.

Remuneration Matters

Procedures for Developing Remuneration Policies

The Board has instituted a formal and transparent procedure for developing policies on executive remuneration and for determining the remuneration packages of individual Directors. The Board has established the ERCC to ensure this is duly implemented.

The ERCC comprises the following non-executive Directors, who are independent of Management:

  • Mr Peter Seah Lim Huat (ERCC Chairman);
  • Mr Teo Ek Tor (independent Director).
  • Mr Sio Tat Hiang; and
  • Mr Lim Ming Seong.

During FY2015, the ERCC held four meetings.

The Board notes that the ERCC Chairman and Mr Sio Tat Hiang are not considered independent within the meaning of the Code given their directorships at STT Communications Limited. However, after due consideration, the Board and the NC are of the view that such appointments do not interfere with the exercise of independent judgement by the ERCC Chairman and Mr Sio on the Board or prevent them from acting objectively in the best interests of the Group in carrying out their duties. The Board and the NC further note that the ERCC Chairman and Mr Sio are not involved in the day-to-day running of the Group’s business and operations, and are independent of Management, with a clear separation of role from Management in the deliberations of the ERCC.

In overseeing StarHub’s remuneration policies, the ERCC’s key duties are to review and recommend to the Board for endorsement:

  • the general remuneration framework and specific remuneration packages for key management personnel (as defined in the Code); and
  • the remuneration framework (including Directors’ fees, allowances and share-based awards) for each Director.

When reviewing and recommending the remuneration framework and packages, the ERCC covers all aspects of remuneration including but not limited to Director’s fees, salaries, allowances, bonuses, options, share based incentives and awards, and benefits in kind. The framework and packages are linked to:

  • the performance of StarHub, the Group and the individuals;
  • industry practices and compensation norms; and
  • the need to attract key management personnel to ensure continuing development of talent and renewal of strong leadership for StarHub.

With regards to the CEO and key management personnel, the ERCC ensures that remuneration paid to them is strongly linked to the achievement of business and individual performance targets. The performance targets are determined by the ERCC and are set at realistic yet stretched levels each year to motivate a high degree of business performance with emphasis on both short and long-term quantifiable objectives.

In addition, the ERCC oversees the following:

  • succession planning for the CEO, the CFO and other key officers. Potential candidates for immediate, medium and long term needs are identified each year;
  • assessing and approving performance share awards and restricted stock awards under StarHub’s approved share plans, and recommending to the Board for approval the grant of share awards to Directors and key management personnel;
  • assessing and approving candidates for key appointments; and
  • overseeing the development of Management and reviewing succession plans for key positions in the Group.

All decisions by the ERCC are made by a majority of votes of the ERCC members present and voting.

No ERCC member or any Director is involved in deliberations in respect of any remuneration, compensation, share-based incentives or any form of benefits to be granted to him, or where there are conflicts of interests. The CEO is present at all ERCC discussions on the compensation and incentive policies, such as share awards, bonus framework, salary and other incentive schemes, of StarHub’s key staff save for ERCC discussions which relate to his own compensation, terms and conditions of service or the review of his performance, for which he absents himself.

The ERCC has access to expert professional advice on remuneration of the Board and executives. The ERCC has appointed Carrots Consulting Pte Ltd (Carrots) as its remuneration consultant and is satisfied that the independence and objectivity of Carrots, is not affected by any relationship between StarHub and Carrots.

The ERCC reviews StarHub’s obligations arising in the event of termination of the executive Director and/or any key management personnel’s contracts of service, to ensure that such contracts of service contain fair and reasonable termination clauses. The ERCC aims to be fair and avoid rewarding poor performance. Prior to any such termination, the ERCC’s approval is required.

During FY2015, the ERCC engaged Carrots to conduct a Pay-for-Performance Alignment Study. The results showed Pay-for-Performance alignment for StarHub in both absolute and relative terms over the 3-year period from financial years 2012 to 2014. Carrots also conducted a Compensation Risk Assessment. ERCC reviewed the various compensation risks that may arise and introduced mitigating policies to better manage risk exposure identified. ERCC has been undertaking periodic reviews of the compensation-related risks.

The ERCC has access to expert professional advice on remuneration of the Board and executives. The ERCC has appointed Carrots Consulting Pte Ltd (Carrots) as its remuneration consultant and is satisfied that the independence and objectivity of Carrots, is not affected by any relationship between StarHub and Carrots.

The ERCC reviews StarHub’s obligations arising in the event of termination of the executive Director and/or any key management personnel’s contracts of service, to ensure that such contracts of service contain fair and reasonable termination clauses. The ERCC aims to be fair and avoid rewarding poor performance. Prior to any such termination, the ERCC’s approval is required.

During the financial year 2014, the ERCC engaged Carrots to conduct a Pay-for-Performance Alignment Study. The results showed Pay-for-Performance alignment for StarHub in both absolute and relative terms over the 3-year period from financial years 2011 to 2013. Carrots also conducted a Compensation Risk Assessment. ERCC reviewed the various compensation risks that may arise and introduced mitigating policies to better manage risk exposure identified. ERCC has been undertaking periodic reviews of the compensation-related risks.

Level and Mix of Remuneration
Disclosure on Remuneration

Non-Executive Directors’ Remuneration

Non-executive Directors receive 70% of their directors’ remuneration in cash and the remaining 30% in share awards granted pursuant to the StarHub Restricted Stock Plan. This remuneration structure encourages non-executive Directors to hold shares in StarHub so as to better align the interests of the non-executive Directors with the interests of shareholders and the long-term interests of StarHub.

Cash Component

Each non-executive Director receives a basic retainer fee, attendance fee and travel allowance (for overseas Directors). Non-executive Directors who perform additional services in Board Committees receive additional fees. The Board Chairman and the Chairman of each Board Committee also receive a higher fee compared with the members of the Board and the respective Board Committees, in view of the greater responsibility carried by that office.

Share Component

The restricted share awards consist of the outright grant of fully paid shares, without any vesting conditions attached. However, in order to encourage alignment of the interests of the nonexecutive Directors with the interests of shareholders, nonexecutive Directors who receive the restricted share awards are required to hold shares in StarHub worth at least the prevailing annual basic retainer fee, or the aggregate of (a) the total number of shares awarded as part of their remuneration for the financial year ended 31 December 2011 and each subsequent financial year thereafter and (b) 50% of the total number of shares awarded from the financial year ended 31 December 2007 to 31 December 2010, whichever is lower. Non-executive Directors can only dispose of all their shares one year after ceasing to be a Director. The number of shares to be awarded to a participating non-executive Director will be determined by reference to the volume weighted average price of a share on the SGX-ST over the 14 trading days commencing on the ex-dividend date that immediately follows the forthcoming AGM. The number of shares to be awarded will be rounded down to the nearest hundred, with cash to be paid in lieu of the remaining shares arising.

The non-executive Directors’ remuneration for FY2015 will be subject to shareholders’ approval at the forthcoming AGM.

Annual Fees for the Board Breakdown of Director's Remuneration

(1) Fixed refers to base salary, Annual Wage Supplement and fixed allowances earned for FY2015.
(2) Variable refers to incentives paid and accrued for the year pursuant to StarHub’s performance bonus scheme and Economic Value Added (EVA) scheme for FY2015. StarHub’s performance bonus scheme is the “balanced scorecard” scheme used to determine the annual performance bonuses payable to StarHub’s employees. The EVA scheme rewards for sustainable shareholder value creation over the medium term, with alignment to StarHub’s strategic business objectives. Under this scheme, each of StarHub’s employees is given clear objectives on his personal scorecard, which are aligned to StarHub’s overall strategic objectives of growth and profitability, creating customer value, operational efficiency, excellence and optimal customer management, and developing a motivated and well trained workforce. Under the EVA scheme, a notional EVA bank account is set up for each senior executive, into which the annual EVA performance bonus earned by him each year is credited. One third of the total amount in his EVA bank account is payable annually at a later date in the following financial year, and the remaining balance in his EVA bank account is payable to him upon his resignation or termination of employment (other than for cause), subject to certain conditions being met. The balance in the EVA bank account will increase or decrease depending on StarHub’s EVAperformance in subsequent years.
(3) Benefits are stated on the basis of direct costs to StarHub, and include tax equalisation, housing and other non-cash benefits such as leave, medical scheme and club membership.
(4) Based on the fair values of the contingent shares granted pursuant to the StarHub Performance Share Plan and StarHub Restricted Stock Plan in 2015, using the Monte Carlo simulation model.
(a) Mr Steven Terrell Clontz was appointed as the Chairman of the Board on 15 July 2015.
(b) Mr Ma Kah Woh was appointed as a non-executive director and the AC Chairman on 23 September 2015.
(c) Mr Teo Ek Tor was appointed as the RC Chairman and resigned as an AC member on 15 July 2015.
(d) Ms Rachel Eng Yaag Ngee was appointed as a non-executive director on 4 May 2015 and an AC member on 15 July 2015.
(e) Fees are payable to Director’s employer company.
(f) Mr Takeshi Kazami had declined the share award and will only receive the cash component of his remuneration. Mr Kazami holds no shares in StarHub.
(g) Mr Tan Guong Ching resigned as the Chairman of the Board and a non-executive Director on 15 July 2015. For Mr Tan’s remuneration in respect of FY2015, he will receive $88,781 in cash and $38,049 in the form of share award granted pursuant to the StarHub Restricted Stock Plan.
(h) Mr Kua Hong Pak resigned as a non-executive Director and the AC Chairman on 23 September 2015. Mr Kua has declined the share award and will only receive the cash component of his remuneration in the amount of $68,838 for FY2015. Mr Kua does not hold any shares in StarHub.

Details of the share awards granted by StarHub to the non-executive Directors under the StarHub Restricted Stock Plan can be found in the Directors’ Statement.

CEO/Executive Director and Key Management Personnel Remuneration

The ERCC seeks to ensure that the level and mix of remuneration of the CEO and key management personnel are competitive and relevant, aligned with shareholders’ interest and promote long-term success of the Group.

Remuneration for the CEO1 and key management personnel comprises a fixed component, variable cash component, share-based component and market-related benefits:

A. Fixed Component: The fixed component comprises the base salary, Annual Wage Supplement and fixed allowances.

B. Variable Cash Component: The variable cash component includes the Annual Variable Bonus and Economic Value Added (EVA) Incentive Plan.

Annual Variable Bonus (AVB)

The AVB is a cash-based incentive for CEO and key management personnel, which is linked to the achievement of annual performance targets.

Individual performance objectives are set at the beginning of each financial year. The objectives are aligned to the overall strategic, financial and operational goals of the Group, and are cascaded down to a select group of key management personnel using scorecards, creating alignment between the performance of the Group, the Company and the individual. While the performance objectives are different for each executive, they are assessed on the same principles across the following four broad categories of targets:

  • Business
  • Customer
  • Process
  • People

The target AVB for the CEO and key management personnel is pre-set at a fixed percentage of their annual base salary, and is adjusted based on the Group performance and the achievement of individual performance targets at the end of performance year. The final AVB payout can range from 0 to 1.5 times of the target payout.

EVA Incentive Plan (EIP)

The EIP rewards employees for sustainable shareholder value creation over the medium term achieved by growing profits, deploying capital efficiently and managing the risk profile and risk time horizon of the business. A portion of the annual performance-related bonus of the key management personnel is tied to the EVA achieved by the Group in the financial year.

Under the plan, one-third of the accumulated EVA-based bonus, comprising the EVA declared for the financial year and the balance of such bonus brought forward from preceding financial years (which comprises multiple years of incentive dollars retained in the EVA bank), is paid out in cash each financial year. The remaining two-thirds are carried forward in the individual executive’s EVA bank. Amounts in the EVA bank are at risk because negative EVA will result in a clawback of EVA accumulated in previous financial years. This mechanism encourages the CEO and key management personnel to work for sustainable EVA generation and to adopt strategies that are aligned with the long-term interests of the Group.

Based on the ERCC’s assessment that the actual performance of the Group in FY2015 had partially met the pre-determined targets, the resulting annual payout under EVA was adjusted accordingly to reflect the performance level achieved.

Share-based Compensation:
Performance Share Plan (PSP)

The PSP serves as a long-term incentive to motivate the key management personnel to strive for superior performance and to align their interests with that of shareholders.

Pursuant to the PSP, the ERCC has decided to grant contingent awards on an annual basis, conditional on meeting targets set for a three-year performance period. The performance measures used in PSP grants during FY2015 are:

  • Relative TSR against the MSCI Asia Pacific Telecommunications Index (including Japan); and
  • Absolute Total Shareholder Return (TSR) against Cost of Equity hurdles (i.e. measure of Wealth Added).

A minimum threshold performance is required for any performance shares to be released to the recipient at the end of the performance period. The actual number of performance shares released will depend on the achievement of set targets over the performance period. For the performance measure of Absolute TSR, the achievement factor ranges from 0 to 2.0 times of 65% of the conditional award. For the performance measure of Relative TSR, the achievement factor ranges from 0 to 1.5 times of 35% of the conditional award.

The final PSP award is conditional on the vesting of the shares under the Restricted Stock Plan (RSP) which have the same performance end period.

The Group has attained an achievement factor which is reflective of meeting the pre-determined target performance level for PSP awards granted based on the performance period from financial years 2013 to 2015.

Restricted Stock Plan (RSP)

The RSP is established with the objective of motivating managers and key talent to strive for sustained long-term growth and superior performance in the Group. It also aims to foster a share ownership culture among employees within the Group and to better align employees’ incentives with shareholders’ interest.

Pursuant to the RSP, the ERCC has decided to grant contingent awards on an annual basis, conditional on targets set for a two-year performance period. The performance measures, set based on the Group corporate objectives, are:

  • Return on Invested Capital (ROIC); and
  • Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA)

A minimum threshold performance is required for any restricted shares to be released to the recipient at the end of the performance period. The actual number of shares released will depend on the achievement of set targets over the performance period, and will be determined by the ERCC at the end of the performance period, capped at 1.5 times of the conditional award. The shares will be released in equal tranches over two consecutive years.

The Group has attained an achievement factor which is reflective of meeting the pre-determined target performance level for RSP awards granted based on the performance period from financial year 2014 to 2015.

As at 31 December 2015, StarHub does not have any existing StarHub Share Option Plan.

Market-related Benefits:

The benefits provided are comparable with local market practices.

The details of the top five key management personnel remuneration in bands of $250,000 and percentage terms for the services rendered by them to the Group for FY2015, are set out in Table 3 below.

Table 3


(1) Fixed refers to base salary, Annual Wage Supplement and fixed allowances earned for FY2015.
(2) Variable refers to incentives paid and accrued for the year pursuant to StarHub’s performance bonus scheme and Economic Value Added (EVA) scheme for FY2015. StarHub’s performance bonus scheme is the “balanced scorecard” scheme used to determine the annual performance bonuses payable to StarHub’s employees. The EVA scheme rewards for sustainable shareholder value creation over the medium term, with alignment to StarHub’s strategic business objectives. Under this scheme, each of StarHub’s employees is given clear objectives on his personal scorecard, which are aligned to StarHub’s overall strategic objectives of growth and profitability, creating customer value, operational efficiency, excellence and optimal customer management, and developing a motivated and well trained workforce. Under the EVA scheme, a notional EVA bank account is set up for each senior executive, into which the annual EVA performance bonus earned by him each year is credited. One third of the total amount in his EVA bank account is payable annually at a later date in the following financial year, and the remaining balance in his EVA bank account is payable to him upon his resignation or termination of employment (other than for cause), subject to certain conditions being met. The balance in the EVA bank account will increase or decrease depending on StarHub’s EVA performance in subsequent years.
(3) Benefits are stated on the basis of direct costs to StarHub, and include tax equalisation, housing and other non-cash benefits such as leave, medical scheme and club membership.
(4) Based on the fair values of PSP and RSP contingent shares granted in 2015, using the Monte Carlo simulation model.
(5) Remuneration bands:
“A” refers to remuneration between $500,001 and $750,000 p.a.
“B” refers to remuneration between $750,001 and $1,000,000 p.a.
“C” refers to remuneration between $1,000,001 and $1,250,000 p.a.
(6) Mr Dennis Chia and Mr Howie Lau joined StarHub as CFO and CMO respectively with effect from 8 July 2015. Accordingly, the amount of actual compensation received was based on the period from 8 July 2015 to 31 December 2015. Their fixed pay includes sign-on bonus awarded to both Mr Dennis Chia and Mr Howie Lau upon joining StarHub and there was share-based compensation granted to Mr Howie Lau as a one-off time-based restricted award of 32,500 shares.
(7) Mr Nicholas Tan Kok Peng resigned as CFO of StarHub with effect from 1 May 2015. For his employment with StarHub, he received compensation (including benefits-in-kind and deferred compensation accrued for FY2015) from StarHub for services rendered in all capacities to the Group. Upon Mr Tan’s departure, he was awarded a package of S$383,040 in recognition of his contribution to StarHub. The outstanding conditional share awards granted to Mr Tan under the StarHub Performance Share Plan in 2014 lapsed on 1 May 2015 and the outstanding conditional share award granted under the StarHub Restricted Share Plan in 2014 was pro-rated and will continue to be vested to Mr Tan on the relevant vesting date. Mr Tan’s earned EVA bank will be paid out to him in two equal tranches during the next two annual payout dates.

If the executive Director or any key management personnel of StarHub is involved in fraud or misconduct, which results in re-statement of StarHub’s financial results or financial loss to StarHub, the Board may reclaim the unvested components of remuneration from such executive Director or key management personnel from all incentive plans for the relevant period, to the extent such incentive has been earned but not yet released or disbursed. The Board, taking into account the ERCC’s recommendation, may decide whether and to what extent, such recoupment of the incentive is appropriate, based on the specific facts and circumstances of the case.

During FY2015, no employee of the Group whose remuneration exceeded $50,000 per annum was an immediate family member of any Director or the CEO.

Strategic Matters

The SC supports, advises and provides direction to the Group on the formulation, review and execution of the Group’s strategies. The mandate for the SC includes:

  • identifying and assessing significant intermediate and long-term opportunities (in terms of new frontiers of organic and inorganic growth) and threats in the Group’s business areas and operations (including technology, competition, regulatory and financial) and the industry; and
  • providing constructive input and recommendations to the Board on any strategic matter reviewed by the SC which requires the Board’s approval.

As at 31 December 2015, the SC comprises non-executive Directors and a co-opted member who are independent of Management. The members are:

  • Mr Nihal Vijaya Devadas Kaviratne CBE (SC Chairman);
  • Mr Steven Terrell Clontz;
  • Mr Lim Ming Seong;
  • Mr Liu Chee Ming;
  • Mr Robert J. Sachs; and
  • Mr Nikhil O. J. Eapen (co-opted).

During FY2015, the SC held four meetings.

Accountability and Audit

Accountability

The Board provides a balanced and informed assessment of the Group’s performance, position and prospects to shareholders in the Group’s quarterly and full-year operating performance and financial results which are released via SGXNET. Press releases and presentation slides on the financial results are also provided via SGXNET.

For the quarterly financial statements, the Board provides a negative assurance confirmation to shareholders, in line with the SGX-ST Listing Manual. For FY2015, the CEO and the CFO have provided assurance to the Board on the integrity of the financial statements for the Group. StarHub recognises that prompt and full compliance with statutory reporting requirements is imperative in maintaining shareholder confidence and trust.

Management updates the Board with monthly management and financial reports which explain StarHub’s performance (in comparison with its forecasted performance and budget) and financial position on a timely basis. Other related business reports are also provided to the Board regularly and upon request by the Board from time to time.

Risk Management and Internal Controls

The Board takes responsibility for the governance of risks and to this end, has established and maintains a sound system of risk management and internal controls to safeguard shareholders’ interests and StarHub’s assets.

The RC assists the Board in its discharge of this responsibility. As at 31 December 2015, the RC comprises the following Directors:

  • Mr Teo Ek Tor (RC Chairman, independent Director);
  • Mr Tan Tong Hai; and
  • Mr Sio Tat Hiang.

During FY2015, the RC held two meetings.

The RC has the following mandate:

  • To review and recommend to the Board the type and level of business risk that the Group undertakes in achieving its business strategy, and the appropriate risk management framework and policies for managing risks that are consistent with StarHub’s risk appetite;
  • To provide oversight in the design, implementation and monitoring of the risk management framework, and system of internal controls (including operational, compliance and information technology controls), and to ensure that Management puts in place action plans to mitigate the risks identified where possible;
  • To review the adequacy and effectiveness of StarHub’s internal controls and risk management systems, including operational, compliance and information technology controls;
  • To review policies and procedures for timely risk identification and containment; and
  • To set and instill in StarHub, an appropriate risk-aware culture for effective risk governance.

The Board, upon recommendation by the RC, approved a Risk Appetite Statement to provide guidance to the Management on key risk parameters. StarHub is committed to upholding high standards of corporate governance and applying consistent and effective risk management to enhance shareholder value. The Group faces a variety of internal and external risks due to complex business operations and the dynamic and competitive market in which it operates. The Group recognises risk management as an optimisation of the risk-reward relationship, within known and agreed risk appetite levels. The Group will manage or avoid situations or actions that risk having a negative impact on its reputation and brand, network integrity and business continuity. StarHub seeks to treat its customers reasonably and fairly. StarHub requires its staff to uphold integrity. StarHub also seeks to meet applicable legal and regulatory requirements. The Group is prepared to take measured risks to seek new growth and pursue value-creation opportunities as they arise, while leveraging its current scale and core strengths.

The RC is assisted by the Management Risk Committee (MRC), comprising relevant members of Senior Management. The MRC oversees, co-ordinates and monitors the implementation of the enterprise-wide risk management policies and procedures across the Group, including the Group’s insurance programme and the facilitation of self-assessment exercise required of significant business units on an annual basis. The MRC also proactively identifies existing and emerging significant risks, and manages them at the enterprise level within StarHub on an ongoing basis. The MRC reports to the RC on a regular basis.

The RC has authority to investigate any matter within its terms of reference, and has full access to and co-operation by Management. The RC will also have full discretion to invite any Director or executive officer to attend its meetings, and to require Management to provide it with such reasonable resources to enable it to discharge its functions properly.

In terms of internal controls, independent audits are conducted by the external and internal auditors on the effectiveness of the Group’s key internal control systems. The AC is responsible for reviewing the audit reports and assessing the effectiveness of the actions taken by Management in resolving any lapses or weaknesses based on the recommendations made by the external and internal auditors, and taking into account Management’s views.

For FY2015 , the Board has received assurance from CEO and CFO that (a) the financial records of the Group have been properly maintained and the financial statements give a true and fair view of the Group’s operations and finances; and (b) the risk management and internal controls of the Group are adequate and effective to address the financial, operational, compliance and information technology risks which the Group considers relevant and material to its current business environment and scope of operations. In addition, Management has implemented an enhanced process to sign off assurance to CEO and CFO, to enhance the current processes for supporting the Board’s opinion on the adequacy and effectiveness of the risk management system and internal controls of the Group.

Based on the risk management system and internal controls established and maintained by the Group, the reviews performed by Management as supported by audit findings by external and internal auditors and the relevant assurance by CEO and CFO, the Board with the concurrence of the AC and the RC is of the opinion that the risk management system and internal controls of the Group, are adequate and effective to address the financial, operational, compliance and information technology risks which the Group considers relevant and material to its current business environment and scope of operations.

The Board notes that the system of internal controls and risk management established by the Group provides reasonable, but not absolute, assurance that the Group will not be adversely affected by any event that can be reasonably foreseen as it strives to achieve its business objectives. However, the Board also notes that there is no system of internal controls and risk management that can provide absolute assurance in this regard or against the occurrence of material errors, poor judgement in decisionmaking, human error, losses, fraud or other irregularities.

Audit Committee

As at 31 December 2015, the AC comprises the following nonexecutive Directors, with a majority (including the AC Chairman) being independent Directors:

  • Mr Ma Kah Woh (AC Chairman, independent Director);
  • Mr Nihal Vijaya Devadas Kaviratne CBE (independent Director);
  • Mr Lim Ming Seong; and
  • Ms Rachel Eng Yaag Ngee (independent Director).

During FY2015, the AC held four meetings and met with the external auditors without Management at least once. The AC members are appropriately qualified to discharge their responsibility and collectively have strong accounting and related financial management expertise and experience. The AC’s key responsibilities include:

The AC has explicit authority to investigate any matter within its terms of reference, with full access to and co-operation by Management. The AC also has full discretion to invite any Director or executive officer to attend its meetings, and to require Management to provide it with such reasonable resources to enable it to discharge its functions properly.

The AC has performed a review of the independence and objectivity of the external auditors, and also a review of the volume and type of non-audit services provided by the external auditors during FY2015. The aggregate amount of external auditors’ fees for FY2015 and the breakdown for the audit and non-audit services are set out in Note 20.3 to the Financial Statements of the Annual Report.

Based on the information, the AC is satisfied that the independence of the external auditors has not been compromised by the provision of the non-audit services and that Rules 712 and 715 of the SGX-ST Listing Manual have been complied. Accordingly, the AC has recommended to the Board that KPMG LLP be nominated for re-appointment as the Group’s external auditors at the 2016 AGM. To further maintain the independence of KPMG LLP, the AC ensures that the audit partner in-charge of the Group is rotated every five years. As the audit partner in-charge of the Group, Ms Ang Fung Fung has completed her five-year tenure as at 31 December 2015, a new audit partner will be appointed for FY2016 at the 2016 AGM. Further, the Board ensures that a former audit partner will not be appointed as an AC member of StarHub within 12 months upon his or her cessation as KPMG LLP partner and for so long as he or she has any financial interest in KPMG LLP. None of the directors or senior management is or has in the past two years been a former employee or partner of the Group’s external auditors.

Internal Audit

The internal audit function of the Group is carried out by RSM Risk Advisory Pte. Ltd. (internal auditor), an independent firm. The internal auditor is guided by the Standards for the Professional Practice of Internal Auditing, prescribed by the Institute of Internal Auditors.

The internal auditor reports to the AC functionally, and to the CEO and CFO of StarHub administratively. The AC approves the appointment, removal, evaluation and compensation of the internal auditor. The internal auditor has unfettered access to all StarHub’s documents, records, properties and personnel, including access to the AC.

The internal auditor adopts a risk-based auditing approach in developing the annual internal audit plan, which focuses on material internal controls, including financial, operational, compliance and information technology controls, across the Group’s business. The internal audit plan is submitted to the AC for its review and approval at the start of each financial year. Periodic internal audit reports are submitted to the AC detailing the internal auditors’ progress in executing the audit plan and any major findings and corrective actions taken by Management.

The AC conducts a review on the adequacy and effectiveness of the internal audit function annually, to ensure that StarHub maintains an effective internal audit function that is adequately staffed and independent of the activities it audits. During FY2015, the AC met with the internal auditor at least once a year without the presence of Management.

  • reviewing and approving quarterly and year-end financial results announcements and financial statements, before recommending to the Board for approval;
  • monitoring compliance with relevant statutory and listing requirements to ensure the integrity of the Group’s financial statements, including the relevance and consistency of the accounting principles adopted;
  • reviewing and reporting to the Board at least annually the adequacy and effectiveness of StarHub’s internal controls,including financial, operational and compliance controls;
  • reviewing the effectiveness of the Group’s internal audit function;
  • reviewing the scope and results of the external audit, and the independence and objectivity of the external auditors (with regard to the nature, extent and cost of non-audit services provided by the external auditors during the financial year);
  • reviewing interested person transactions to ensure compliance with the SGX-ST Listing Manual and the Shareholders’ Mandate that is renewable annually;
  • making recommendations to the Board on the proposals to the shareholders on the appointment, re-appointment and removal of the external auditors, and approving the remuneration and terms of engagement of the external auditor;
  • commissioning and reviewing findings of internal investigations into suspected fraud, irregularity or failure of internal controls or violation of any law that is likely to have a material impact on the Group’s results; and
  • reviewing StarHub’s Whistle Blowing Policy and the arrangements therein by which employees of StarHub and any other persons may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters, and such concerns will be independently investigated and appropriate follow-up action(s) will be taken.

Shareholder Rights and Responsibilities

Shareholder Rights

StarHub respects shareholders’ rights and promotes the fair and equitable treatment of all shareholders. StarHub keeps all of its shareholders sufficiently informed of its corporate affairs and activities, including any changes in StarHub or its business which may materially affect the price or value of StarHub shares, on a timely basis.

All new material price-sensitive information is disclosed on an adequate, accurate and timely basis via the SGXNET. The SGXNET announcements are also posted on StarHub’s Investor Relations website. StarHub recognises that the release of timely and relevant information is central to good corporate governance and assists shareholders to make informed investment decisions.

All shareholders are entitled to attend and vote at general meetings and are afforded the opportunity to participate effectively in the general meetings. Shareholders are allowed to appoint up to two proxies to attend, speak and vote in their place at general meetings. In view of the Companies (Amendment) Act 2014, shareholders who are nominee companies, custodian banks or CPF agent banks (Relevant Intermediaries) may appoint more than two proxies to attend, speak and vote at the upcoming Eighteenth Annual General Meeting in 2016 and subsequent general meetings.

Communication with Shareholder

StarHub protects and facilitates the exercise of shareholder’s rights. StarHub reaches out to its shareholders through regular, effective and non-discriminatory communication with shareholders.

StarHub provides regular and timely information to the investment community regarding the Group’s performance, progress and prospects as well as major industry and corporate developments and other relevant information. StarHub solicits and considers the views of the shareholders via: (a) periodic analyst and media briefings throughout the year; (b) the CEO and Investor Relations team meeting with institutional investors regularly, through international road shows and conferences organised by major brokerage firms; and (c) via third-party perception studies on StarHub.

Apart from the SGXNET, the StarHub IR website at www.starhub. com/ir is the primary source of information for the investors. It houses all media releases, financial results, annual reports, SGXNET announcements, presentation materials, archived webcasts and conference calls, and other corporate information relating to the Group. The website is regularly updated. Investors may also elect to be notified of any new updates via an e-mail alert service. New material price-sensitive information such as financial results are however, released through SGXNET before any media or analyst conferences are conducted or posted on the StarHub IR website. This ensures fair and non-selective disclosure of information to all investors.

Shareholders may direct their queries and concerns to the StarHub IR team at the contact particulars given at the StarHub IR website. The StarHub IR team is also prompt in keeping Management fully apprised of shareholder views and sentiments.

StarHub declares dividend on a quarterly basis, and informs its shareholders of the dividend payments in the respective quarterly and full year financial results announcements via the SGXNET.

Conduct of Shareholder Meetings

At general meetings, StarHub encourages shareholder participation through active discussion at the question and answer session.

Notices of the AGM, together with the annual reports are issued to all shareholders (including foreign shareholders) at least 21 days prior to the scheduled AGM. This provides ample time for shareholders to review the notice of AGM and annual reports before the AGM and if they wish, appoint their proxies to attend the AGM. As part of StarHub’s commitment towards more environmentally-friendly and sustainable efforts, electronic copies of annual reports (in the form of a CD-ROM) are issued. Shareholders may elect to receive hardcopies of annual reports upon request.

All Directors (in particular the Chairman of the Board and the respective Chairman of the Board Committees) together with Senior Management attend all general meetings to address shareholders’ queries. The external auditors are also present to address shareholders’ queries about the conduct of audit and the preparation and content of the auditors’ report. Registered shareholders are invited to attend and participate actively in such general meetings, including seeking clarification and/or querying the Group’s strategic direction, business, operations, performance and proposed resolutions.

StarHub ensures that there will be separate resolutions at general meetings on each substantially separate issue. Voting is carried out systematically and all resolutions passed are properly recorded. To enhance transparency and efficiency in the voting process and results, electronic poll voting is conducted. The results showing the number of votes cast for and against each resolution and the respective percentages are announced via the SGXNET on the same day of the general meeting.

Minutes of general meetings are made available to shareholders upon their request.

Continual Commitment To Enhance Corporate Governance

Going beyond the requirements of the Code, the SGX-ST Listing Manual, the Companies Act and the Securities and Futures Act, StarHub has continued to implement additional measures to enhance corporate governance for the Group for FY2015:

Securities Dealings

StarHub has adopted an enhanced insider trading policy, with respect to dealings in the securities of StarHub by the Directors and employees of the Group, which exceeds the requirements of the SGX-ST Listing Manual:

  • All Directors and employees of the Group are prohibited from dealing in StarHub’s securities:
    (a) two weeks prior to the announcement of the Group’s results for each of the first three quarters of its financial year; and
    (b) one month prior to the announcement of the Group’s full year results; and
  • All Directors, Management and employees directly involved in the preparation of the Group’s quarterly and full year results are prohibited from dealing in StarHub’s securities one month prior to the announcement of each of the Group’s quarterly and full year results.

All Directors, Management and employees are notified by email prior to the start of each trading blackout period and the restrictions are only lifted after the announcement of the respective financial results. The policy also discourages trading on short term considerations and reminds Directors, Management and employees of their obligations under insider trading laws.

StarHub has also adopted a policy against acquiring any of its shares pursuant to its Share Purchase Mandate where a pricesensitive development has occurred or been the subject of a decision, until the development has been publicly announced.

The Board has voluntarily undertaken to reduce the amount of shares it may issue and allot pursuant to the general authority granted by StarHub’s shareholders to the Board, from 20% to 15% of StarHub’s total issued share capital. In addition, the Board has voluntarily reduced the aggregate amount of Share awards that can be granted under the StarHub Performance Share Plan and StarHub Restricted Stock Plan which were approved by the shareholders at the 2014 EGM, from 15% to 8% of StarHub’s total issued share capital (taking into account any outstanding unexercised options and unvested share awards).

Whistle Blowing Policy

StarHub takes a zero tolerance stance towards fraud and ethical violations. As such, the Group has instituted a robust procedure for the purpose of providing third parties and employees with accessible channels for reporting suspected fraud, corruption, financial impropriety, unethical conduct and other criminal or dishonest practices. Such channels include the employees’ immediate supervisors, the relevant Heads of Department or the Head of Human Resource (as may be appropriate), as well as the AC.

The Investigation Committee (constituting representatives from the Senior Management) will investigate the suspected wrongdoing and implement rectification and prevention measures. Any personnel with a conflict of interest (actual or potential) will be barred from appointment to the Investigation Committee. All cases of wrongdoing will also be reported to and reviewed by the AC.

In cases of suspected wrongdoing involving the CEO and/or CFO, the Investigation Committee will be chaired by the AC Chairman (or his nominee). Upon completing the investigations for each case of suspected wrongdoing, the Investigation Committee may at its discretion decide whether to circulate the findings of the investigations to all employees, taking into account the interests of the Group.

The Group’s whistle-blowing policy aims to encourage the reporting of such matters in good faith, by lending confidence that whistle-blowers will be treated fairly and accorded with protection against reprisals. StarHub will take disciplinary action against any party who victimises whistle-blowers. Further, StarHub does not disregard anonymous complaints but will give such complaints appropriate weight. The Group’s whistle-blowing policyOpens in new window is available on StarHub’s intranet and corporate website for easy access by all employees and members of the public.

Employee Code of Conduct
and Rules on Business Conduct

To guide employees in carrying out their duties and responsibilities with high standards of personal and corporate integrity when dealing with StarHub, its competitors, customers, suppliers and the community, StarHub has the following in place:

StarHub’s Employee Code of Conduct and Ethics and the Corporate Gift and Hospitality Policy cover business conduct (including employees’ compliance with anti-corruption and antibribery laws), conduct in the workplace, protection of StarHub’s assets, proprietary and confidential information and intellectual property, conflict of interest, non-solicitation of customers and employees, and workplace health and safety. In parallel, the Supplier and Vendor Policy covers internal controls on tenders, vendor selection and purchasing to ensure transparency, objectivity and compliance.

The Employee Code of Conduct and Ethics and the Corporate Gift and Hospitality Policy are available on StarHub’s intranet, while the Supplier and Vendor Policy are available on both StarHub’s intranet and corporate website for easy access.

Compliance Leave Policy

StarHub has a Compliance Leave Policy which applies to employees who hold Senior Manager position and above, finance advocates and employees with sensitive job functions such as handling monies, inventories, payroll processing and approvals, risk management and purchasing of goods and services. Under the Compliance Leave Policy, such employees are required to go on mandatory block leave of at least five consecutive working days each calendar year. This arrangement allows covering officers to fully step into the duties of the employee on leave, as an additional check and balance against any breaches. This is an additional risk mitigation measure voluntarily put in place to enhance governance.

Document Classification Policy

StarHub has a document classification policy to guide employees in their handling of information and documents relating to the Group’s business, activities and operations. Such information and documents are required to be classified as “Confidential”, “For Internal Use” or “For Public Distribution”. This classification helps to safeguard the information and documents, ensures that only appropriate persons have access to that information and that access is on a need-to-know basis only.

Strategic Business Continuity Management (BCM)

StarHub was the first Info-Communications company in Singapore to be successfully certified to Singapore Standards SS540: 2008 for Business Continuity Management (BCM) in May 2011. In May 2014, StarHub successfully converted to ISO 22301:2013 which is the ISO standard for BCM. StarHub’s BCM program focuses on Info-Communications Network, Infrastructure and Support Services for Mobile, Television, Broadband and Fixed. The BCM program is also supplemented by Pandemic Plan, Haze Response Plan and Crisis Communication Plans to ensure StarHub is able to addressdifferent crisis situations.

Security Measures for Data Protection

In addition to the Laptop Encryption Solution, StarHub hasimplemented Mobile Device Management (MDM) to ensure commercially sensitive and confidential corporate emails and information accessed by employees using their mobile devices are protected. In the event an employee’s mobile device is lost or stolen, MDM will remove corporate data stored on the mobile device by performing a remote factory reset. Both the Laptop Encryption Solution and the MDM enhance the security of StarHub’s commercially sensitive and confidential corporate data accessed through or stored on such mobile devices and laptops by employees. On an on-going basis, StarHub continually evaluates new technologies which may further enhance the security of its confidential and sensitive information. StarHub has put in place a comprehensive Personal Data Protection compliance program to ensure compliance with the law.