ESR-REIT Annual Report 2024 101 Pursuant to Provision 3.3 of the CG Code, a lead independent director provides leadership in situations where the Chairperson is conflicted, especially when the Chairperson is not independent. Accordingly, no lead independent director is appointed as Ms. Stefanie Yuen Thio is an independent Director for the purposes of the CG Code. The Chairperson leads the Board discussion while fostering a culture of openness and debate that renders the Board effective. She facilitates active contributions by the Directors and promotes high standards of corporate governance and transparency. The Chairperson also performs a significant leadership role by providing clear oversight and guidance to the Management on strategic issues. The CEO has full executive responsibilities over the business direction and operational decisions in managing ESR-REIT and is responsible for implementing strategies and policies approved by the Board. He ensures the quality and timeliness of the flow of information between the Management and the Board, Unitholders and other stakeholders. Principle 4: Board Membership Nominating and Remuneration Committee The Board has a formal and transparent process for the appointment and re-appointment of Directors, taking into account the need for progressive renewal of the Board. It has established the NRC which makes recommendations to the Board on all appointments to the Board and Board Committees. The NRC comprises 4 Non-Executive Directors. They are: 1. Mr. Ronald Lim, Independent Non-Executive Director (Chairman) 2. Ms. Stefanie Yuen Thio, Independent Non-Executive Director (Member) 3. Mr. Stuart Gibson, Non-Executive Director (Member) 4. Mr. Shen Jinchu, Jeffrey, Non-Executive Director (Member) (b) Given that the investment mandates of ESRREIT and ARA H-BT and ARA H-REIT (collectively, “ARA H-Trust”) do not overlap, there is little risk of a conflict of interest that would compromise Ms. Stefanie Yuen Thio’s ability to act in the best interests of the unitholders of ESR-REIT. In addition, Ms. Stefanie Yuen Thio does not sit on the board of ESR Group Limited or ARA H-Trust’s sponsor, ARA Asset Management Limited. (c) TSMP’s legal services to ESR-REIT and the Manager were provided in the ordinary course of business, on an arm’s length basis and based on normal commercial terms (the “Transaction”). The legal fees which TSMP received from ESR-REIT and the Manager were insubstantial in relation to TSMP’s overall revenue, and Ms. Stefanie Yuen Thio did not personally represent ESR-REIT and the Manager in the Transaction and had abstained in ESR-REIT’s selection and appointment of TSMP as legal counsel for the Transaction. Based on the above, the Board and the NRC are of the view that Ms. Stefanie Yuen Thio is independent. For the purposes of Regulation 13E(b)(ii) of the SF(LCB) Regulations, the Board is satisfied that, as at the last day of FY2024, Ms. Stefanie Yuen Thio, Mr. Shen Jinchu, Jeffrey, Mr. Stuart Gibson, Mr. George Agethen and Mr. Adrian Chui, were able to act in the best interests of all the Unitholders of ESR-REIT that was managed by the Manager. Principle 3: Chairperson and Chief Executive Officer The positions of the Chairperson and the CEO of the Manager are held by separate individuals to ensure a clear division of responsibilities between the leadership of the Board and the Management, and no one individual has unfettered powers of decision-making. The Chairperson is Ms. Stefanie Yuen Thio, whereas the CEO is Mr. Adrian Chui. The Chairperson, who is independent, and the CEO are not related to each other so as to maintain an appropriate balance of power, increased accountability and greater capacity of the Board for independent decisionmaking. The Board also establishes and sets out in writing the division of responsibilities between the Chairperson and the CEO.
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