94 STRATEGICALLY ADVANCING The directors of the Manager (the “Directors”) have fiduciary responsibilities and are collectively and individually obliged at all times to act honestly and objectively in the best interests of ESR-REIT and its Unitholders. In line with this, the Board has adopted a policy to address all potential conflicts of interest. All Directors are required to notify the Board as soon as he or she becomes aware of any conflict of interest which may exist or might reasonably be thought to exist. Directors are also required to recuse themselves from all deliberations and abstain from voting in relation to the matters which he or she has a conflict of interest. All Directors have complied with this policy and where relevant such compliance has been duly recorded in the minutes of meeting or written resolutions. To facilitate effective management, certain functions have been delegated to various board committees, each of which has its own written terms of reference and whose actions are reported to, and monitored by, the Board. These board committees are the ARCC, NRC, IC and the BSC (each, a “Board Committee”). Membership of the various Board Committees is managed to ensure an equitable distribution of responsibilities among Board members to ensure that sufficient time and attention are given to the affairs of ESR-REIT, to maximise the effectiveness of the Board and to foster active participation and contribution from Board members. Diversity of experience and appropriate skills are also considered in the composition of the respective Board Committees. • ensuring necessary resources (including financial and human resources) are in place for the Manager to meet its strategic objectives; • establishing and maintaining a sound risk management framework to effectively monitor, assess and manage risks to achieve an appropriate balance between risks and Manager’s performance; • constructively challenging the Management and reviewing their performance; • instilling an ethical corporate culture and ensuring that Manager’s values, standards, policies and practices are consistent with the culture; • ensuring transparency and accountability to the Unitholders, shareholders of the Manager and other stakeholders of the Manager and ESR-REIT; and • considering sustainability issues (including environmental and social factors) as part of its strategic formulation and integrating sustainability objectives into business decisions. The Board has approved a set of delegations of authority which sets out financial approval limits for investments, divestments, capital expenditures, bank borrowings and other operational matters. Certain transactions which are reserved for Board’s approval include material acquisitions, divestments, asset enhancement initiatives, fundraising activities, income distributions and other returns to Unitholders and operational matters exceeding the prescribed approval limits. Lower levels of approval limits are also provided at various management level to facilitate operational efficiency. The Board decides on matters that requires its approval and clearly communicates this to the Management either in writing or through minutes of the Board meetings circulated.
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