Role and duties of the Board of Directors
- The Company’s Board of Directors has knowledge, skills and extensive experiences in several fields and can apply them at their discretion independently. They also have leadership and the duty to determine the strategies, directions, policies, objectives and missions of the Company, as well as follow up on its performances in order to achieve the objectives and ensure compliance with the policies, rules, laws and related regulations. They are also responsible for managing risks at an appropriate level within the framework of the law, objectives and resolutions of the shareholders with integrity in the best interest of the Company while ensuring full responsibilities for the shareholders and all stakeholders. Furthermore, to enhance efficiencies, effectiveness, transparency and accountability, the Company regularly assesses the performance of the Board of Directors.
- The Board of Directors puts the Company’s corporate governance policy in writing, approves it and reviews it at least once a year.
- The Board of Directors promotes ethics by adopting the following measures: The Company has abided by a business practice that is transparent, honest and fair. The Code of Conduct for the Board of Directors, executives and employees was issued to be used in the implementation of their duties according to the Company’s missions within the framework of the laws and the Company’s regulations on a professional basis. All employees are instructed to follow the Code of Conduct, which is made available on its website at www.lh.co.th and the Company’s central database. The Company also holds activities to promote compliance with the Code of Conduct and foster the culture of good corporate governance. It effectively communicates the guidelines among employees and follows up on their compliance with the Code of Conduct. Such activities include:
- During the orientation of new employees, the principles of good corporate governance and the Code of Conduct are included for better understanding and practice.
- Communicating to the employees via email about the guidelines based on the Code of Conduct.
- Organizing activities through internal electronic media or intranet, especially public relations on ethics and the principles of good corporate governance on the Welcome Page
- Following up on compliance through the supervision of the head of each unit and the mechanisms of the Internal Audit and System Development Department in monitoring and evaluating.
The Company follows up on compliance with the Code of Conduct every year. The Internal Audit and System Development Department has been assigned to monitor the compliance and report to the Audit Committee for acknowledgement with suggestions on how to address the issues. In 2016, the Company’s auditors, an independent unit outside the organization evaluated ethical compliance and had no recommendations.
- Conflicts of interests
The Company has complied with the principles of good corporate governance, which prevent potential conflicts of interest. All of its employees were instructed to strictly abide by the principle as follows: Measures to eliminate conflicts of interest The Company’s Board of Directors properly considers transactions which may constitute conflicts of interest, connected transactions or related transactions within an ethical framework after they have been scrutinized by the Audit Committee. It enforces compliance with the regulations of the Stock Exchange of Thailand and the Securities and Exchange Commission. Disclosures of transactions with potential conflicts of interest have also been made. In setting the policies, regulations and the approval procedure of transactions with potential conflicts of interest to be followed by the executives, employees and related parties, the Company has used the following criteria:
- For any transaction in which a director, employee or connected party has a conflict of interest with the Company, the director or employee may not take part in approving it. Price must also be set appropriately, as if the transaction were made with a third party.
- In setting a price to prevent a potential conflict of interest, a fair, appropriate price in line with normal trade practices shall be used.
- In conducting a connected party transaction in line with the principles of good corporate governance, the transaction must be submitted to the Audit Committee for consideration first,in line with the criteria set by the Stock Exchange of Thailand. Only after the Audit Committee gives its opinion on the transaction can it be sent to the Board of Directors for approval in keeping with good corporate governance principles.
- Disclosures of transactions with potential conflicts of interest or connected party transactions as defined by the Securities and Exchange Commission and the Stock Exchange of Thailand are made in Form 56-1 and the annual report. They are also included in the financial statements in line with accounting standards.
- Risk policy
Risk management: The Company’s Board of Directors places great importance of risk management and has determined and evaluated risks of the business. Measures have been adopted to prevent and manage the risks, including those affecting the Company’s operations as detailed under Item “Risk factors”. The Company also set up the Risk Management Committee of which scope of authority, duties and responsibilities were clearly defined in the Risk Management Committee Charter approved by the Board of Director. The details are under “Risk Management Committee”.
Risk management policy
- As owners of the risks, the Company’s Board of Directors, all executives, employees and units have the duty to take responsibility, evaluate, follow up and support the establishment of an efficient risk-management procedure.
- Each business unit of the Company must set up its own risk management procedure and evaluate and follow up on its progress and results systematically and constantly. The procedure must be revised to better suit the changing business environment on a regular basis at least once a year.
- Risk evaluation shall be included as part of the annual work plan of each unit by considering all risks at the organizational level and taking into consideration both internal and external risk factors. Risks must be managed and an appropriate early-warning system set up.
- The Risk Management Committee is responsible for evaluating the risk management and giving its opinions on the issue to the Company’s Board of Directors.
- An organizational culture has been fostered to promote a common understanding and conscience on risks by building a knowledge base, as the Company believes risks can be alleviated or acceptable when the executives and staff of all units are aware of the damages they can potentially unleash. As a result, the Company is determined to develop databases both internally and externally by investing in information technology and embracing modern technologies so that staff at all levels can access the information and share their experiences. This will eventually lead to the development and improvement of the risk-management procedure into an efficient mechanism.