Corporate governance

Corporate Govenance

Thaioil believes that the oil business is managed on the basis of corporate governance and business ethics. Major reasons for conducting business efficiently include possessing integrity, transparency, accountability and fairness to all interested parties with maximum benefits to shareholders. This contributes to the sustainability of the business.

• Policies relating to corporate govenance / Internal audit / • Channel complaint 

Board of Directors

Board of Directors shall consist of no less than 5 and no more than 15 persons, as defined in the Articles of Association of the Company. The Board of Directors was assigned to the Nomination and Remuneration Committee and was to maintain the nomination and selection of directors and top executives in the event of vacancy.

The composition of the Board of Directors must have enough number of independent directors to be sure that they can counterbalance the work of the Board of Directors and implement the management. The Board of Directors must consist of at least one-third of the directors with no less than 3 members.

Qualification of the Board of Directors consists of people who are trusted and capable in a variety of skills, including industrial financial accounting and business management as well as international marketing strategy, crisis management, legal and regulatory affairs.

Independent Director’s Qualification Thaioil defined Independents Directors’ qualification that is in consistent and more intense than the requirement of the Stock Exchange Commission (SEC)’s and Dow Jones Sustainability Indices (DJSI)’s criteria.

Name of the Board of Directors and Independent Directors’ Qualifications Criteria

The Board-Committees comprise of the Audit Committee, The Nomination and Remuneration Committee, Corporate Governance Committee and Risk Management Committee. 

In order to come up with the company’s visions, policies, and various practices, the committee takes sustainability issues into consideration. This is also related to the company’s management and constant improvement. Good standards and work ethics are also vital in management on the basis of merit, quality, and efficiency so as to meet the international standards for corporate governance. This can build confidence and trust from investors and stakeholders.

An assessment of the company's performances—Thaioil is tracking the indicator of the company. The directors will call a meeting conducted by the management on a monthly basis.

The evaluation of Thaioil’s performances involves examining the company’s indices. The committee would call for a meeting among the executives on a monthly basis. They would discuss issues regarding the company’s policies and payments, for example. The committee operates in 3 ways: (1) evaluation of their own performance on the board, (2) evaluation of performance of others on the board, and (3) the board of directors’ evaluation of the board and its committees. This has been audited by the Thai Institute of Directors Association (IOD).

Corporate Governance and Executive Incentives

Thaioil’s corporate governance procedures and practices are key to achieving our mission to sustainably create value and enrich the well-being of our key stakeholders – namely, Thaioil’s shareholders, customers, suppliers and contractors, employees, communities and society, and government and related public agencies. To that end, Thaioil has established a set of principles to guide our corporate governance procedures and practices:

Thaioil’s compensation and remuneration processes hold our management accountable for leading us to operate in compliance with these principles and incentivize them to make decisions that lead Thaioil to the best outcomes.

The CEO is specifically assessed by the Nomination and Remuneration Committee, with the assessment results discussed in the Board for endorsement. This assessment includes three main aspects – corporate key performance indicator (KPI) achievements and leadership competency.

Success Metrics of Chief Executive Officer

The strategic plan approved by the Board and the management will be set as the corporate Key Performance Indicator (KPI) of the Group. The corporate KPIs will be assigned for the CEO then cascading down to executive vice president level, assistant executive vice president level , and then department and division level , respectively. The performance metric 2018 can be illustrated as follows.

The results of these assessments translate into compensation packages. At the present moment, the standard Thaioil compensation package for executives includes base salary, and annual bonus and variable compensation depending on annual performance. These packages are rewarded annually and paid directly. Our longest performance period and time vesting for variable CEO compensation both currently amount to 1 year each, and we do not use deferred bonus plans.

As stated above, Thaioil provides these compensation packages only after in-depth and comprehensive assessments of each executives’ performance. Should new information surface that bring to question the validity of these compensation packages, Thaioil will look to the Securities and Exchange Act B.E. 2551, which specifies that executives can be prosecuted for misconduct or conduct that violates any law, regulation, or agreement made with the Board and/or investors. This prosecution includes a demand that executives return the benefits they have received. That said, we currently have not formally established a clawback provision.

Moreover, to further incentivize our executives to act in alignment with the interests of Thaioil’s stakeholders and to drive the company for the sustainable long-term success, Thaioil has stock ownership guidelines to encourage the CEO and executive vice presidents to build up a share ownership of 2 to 12 times of monthly base salary, or 1 times the annual base salary. However, there is currently no stock ownership requirement. 

Share Ownership 2018

CEO Compensation

The Nomination and Remuneration Committee is responsible for assessing the annual performance and compensation of the CEO such as salary, bonus, and other benefits on behalf of the Board, and submit them to the Board for approval.

Executives are responsible for overseeing the company's business and daily activities, while the CEO is the top executive in charge of company management, as entrusted by the Board of Directors. The CEO must also strictly supervise company management in accordance with the work plan and budget approved by the Board of Directors, while demonstrating integrity and accountability, for the best interests of the company and its shareholders.

The CEO, as well as executives at all levels, jointly determine Key Performance Indicators (KPIs) each year to ensure corporate KPIs for Thaioil’s business achievements, factors supporting sustainable growth, corporate image, and social and community responsibility achieved with transparent and truly beneficial practices.

Intention

Thaioil announced that it is politically impartial and will not support any political party or individual on behalf of the Company.

TOP Way of Conduct

To ensure the alignment amongst Thaioil and its affiliates, and to create competitive advantages in the market in achieving long-term goals and sustainable growth. Thaioil has established the TOP Way of Conduct since 2015.  The TOP Way of Conduct incorporated 15 important policies. The objectives of the TOP Way of Conduct are to be the guideline for executives ,managements, and employees to adhere to while performing their duties.