Corporate governance

Corporate Governance

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.

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 (as of February 1st, 2023)

Name of Directors
(as of February 1st, 2023)
Independent Director’s Qualification
DJSI SEC TOP
1. Professor Dr. Supot Teachavorasinskun (Chairman)

2. Police General Aek Angsananont

3. Dr. Pailin Chuchottaworn

4. Air Chief Marshal Suttipong Inseeyong

5. Mr. Praphaisith Tankeyura

6. General Kukiat Srinaka

7. Ms. Phannalin Mahawongtikul

8. Dr. Buranin Rattanasombat

9. Associate Professor Dr. Pasu Decharin

10. Mr. Plakorn Wanglee

11. Mr. Terdkiat Prommool

12. Dr. Sompop Pattanariyankool

13. Mr. Suchat Ramarch

14. Dr. Veerapat Kiatfuenfoo

15. Mr. Bandhit Thamprajamchit (CEO/President)

Board Composition (as of February 1, 2023)

Board Composition

   1  Executive Director
--------------------------------------
  14  Non-Executive Directors
--------------------------------------
   8  Independent Directors

 
Gender

Male                       14
--------------------------------------
Female           1

 
Tenure

Average                                 
            3.27  
Years
 

Board Meeting
Attendance

เฉลี่ย (Average)

 

98.5%

 

Board Mandates

A Limit of
 

3 Listed Companies in SET

Remarks: Board Meeting Attendance and Tenure were information as of December 31, 2022

Board Skill Matrix

In this regard, a policy on the Board’s diversity is readily in place. Consideration for appointment is made on experience, knowledge, and capability that benefits the business while gender, race, ethnicity, nationality, or country of origin are not regarded as any restriction. A Board Skill Matrix was developed for mapping out skills, knowledge, and expertise required for the business, such as energy, petroleum and petrochemicals, accounting and finance, information technology and digital, and innovation and environment, among others. The Board should consist of at least three directors with knowledge in the Company’s business, at least one director in the law, and at least one director in financial and accounting.

Skills Matrix of Thaioil Board of Directors

Directors

(As of February 1, 2023)

Skill Knowledge and Expertise Other Qualifications
1.Energy/Petroleum/Petrochemicals 2.Engineering 3.Accounting and Finance 4.Law 5.Econimics 6.Political Science/Social Science 7.Security 8.IT/Digital 9.Business Management/Organizational
Management/Corporate Governance
10.Science/Innovation/Environment Independent Director Director Pool./IOD/Chartered Director No. of Mandate in other
Listed Companies
1.Ms. Pannalin Mahawongtikul                - 1
2.Pol. Gen. Aek Angsananont                - 2
3.ACM Suttipong Inseeyong             - -
4.Mr. Praphaisith Tankeyura               - 1
5. Dr. Pailin Chuchottaworn               - 2
6.Mr. Plakorn Wanglee                 1
7.Gen. Kukiat Srinaka             - 1
8. Dr.Buranin Rattanasombat                 1
9.Mr. Suchart Ramarch               - -
10. Mr. Terdkiat Prommool                 1
11.Professor Dr. Supot Teachavorasinskun                 -
12.Mr. Bandhit Thamprajamchit           - - 1
13.Associate Prof. Dr. Pasu Decharin                  - 2
14.Dr. Sompop Pattanariyankool                 - -
15.Dr. Veerapat Kiatfuengfoo              - - -
Total 8 6 4 4 3 4 4 4 15 5 8 7  
✓ Education
 Work experience (shall have working experience in such field not less than 3 years and identify top 5 areas of expertise)
☑ Education with work experience

Board Expertise (Information as of February 1, 2023)

Energy/Petroleum/
Petrochemicals

Persons

Engineering
 

Persons

Accounting/Finance
 

Persons

Law
 

Persons

Economics
 

Persons

Political Science/
Social Science



 

4 Persons

Security




 

Persons

Information
Technology/Digital



 

Persons

Business
Management/
Organizational
Management/
Corporate Governance

15 Persons

Science/Innovation/
Environment



 

5 Persons

Board Diversity Policy - Thaioil’s nomination criteria stipulate that directors must hold qualifications that comply with laws and regulations, considering experience, knowledge, and skills that benefit the business. and diversity of gender, race, ethnicity, nationality, or country of origin. Thaioil also values directors’ diversity of expertise and has developed a Board Skill Matrix aligned with business strategies to assist in the selection process. Names of qualified persons are also searched from the State Enterprise Policy Office’s (SEPO) Director’s Pool and the Thai Institute of Directors’ list of professional directors (IOD Chartered Directors).

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

Board Election Process - Thaioil’s nomination criteria stipulate that directors must hold qualifications that comply with laws and regulations, considering experience, knowledge, and skills that benefit the business. and diversity of gender, race, ethnicity, nationality, or country of origin. Thaioil also values directors’ diversity of expertise and has developed a Board Skill Matrix aligned with business strategies to assist in the selection process. Names of qualified persons are also searched from the State Enterprise Policy Office’s (SEPO) Director’s Pool and the Thai Institute of Directors’ list of professional directors (IOD Chartered Directors). Furthermore, by the Company’s Articles of Association (AOA), the number of Board members shall consist of at least five (5) but not more than fifteen (15) members, all of whom must be proficient and widely accepted, and elected by shareholders at the Annual General Meeting of Shareholders (AGM). Each year, a certain number of Board members completed the term as required by the AOA; however, they may be re-nominated and re-elected on an individual basis upon receiving majority votes of the shareholders who attend the meeting and casting their votes.

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.

Directors’ Remuneration - The Nomination and Remuneration Committee (NRC) was appointed by the Board to consider director’s annual remuneration taking into account such factors as directors’ responsibilities, business performance, and overall economic circumstances while making comparisons with other companies in the same industry to come up with a comparable and motivating remuneration package. The NRC will then make a proposal to the Board for endorsement before submission to the Annual General Meeting of Shareholders (AGM) for consideration and approval.

Board’s Performance Assessment - Thaioil arranges for performance assessment of the Board on an annual basis. The assessment is divided into three parts:

1) Board and Board-Committee Assessment
2) Individual Self-Assessment
3) Peer Assessment

Thaioil has guidelines to be evaluated by independent advisors every 3 years in accordance with the guidelines of the Corporate Governance Code for Listed Companies 2017 (CG Code), which was implemented in 2019 by AON Hewitt (Thailand) Co., Ltd.

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..

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, department and section level, respectively. The CEO and Executives are specifically assessed by the Nomination and Remuneration Committee, with the assessment results discussed in the Board for endorsement. This assessment includes two main aspects – corporate key performance indicator (KPI) achievements and leadership competency. KPIs cover: Financial returns such as net profits and ROIC, and ROIC compared with peers (Relative financial return indicator compared with peers in the same industry); Operations; Strategic initiatives; and Enabler & Sustainability indicators.

1. Corporate Key Performance Indicators (KPI) Achievements
- making up 70% of the performance metric. The corporate KPIs are defined according to a balanced scorecard that includes three main areas - Business As Usual (35%), Strategic Initiatives (35%), and Strategic Enablers & Sustainability (30%)

Business As Usual (BAU)

- Financial Return: Net Profit and ROIC, and ROIC compared with peers in the same industry
- Total Recordable Case Frequency (TRCF)
- Operational Availability
- Energy Efficiency
- Cash Operating Cost
- Productivity improvement

Strategic Enablers& Sustainability

- Recapitalization & Credit rating by both local and international credit rating agencies
- Human Capital Index
- Learning Organization
- Digitalization Projects Completion
- Stakeholder Engagement
- DJSI
- Brand Survey

Strategic Initiatives

- Key strategic projects execution

2. Leadership Competency
- making up 30% of the performance metric. This assesses the leadership competency of the President and CEO in six areas, including fostering a group vision, management that follows strategic plans, risk management, team management to achieve highest productivity, teaching and development, and personal excellence.

Management Ownership

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 5 to 7 times of annual base salary. This aims to strongly encourage our executive management to drive the company for the sustainable long-term success, and to gain trusts from our investors.

Remuneration of Chief Executive Officer

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 refer clawback provision from Section 89 and Section 281/2 of the Securities and Exchange Act, B.E. 2551, which specified that the executive managements shall perform their duties with responsibility, comply with laws, corporate rules, and corporate objectives. The executive managements shall also respond to the meeting resolutions of the board of directors and agreement from the investors. In case any director or executive fails to perform his/ her duties or engages in any misconduct or conduct that violates any law, regulation, or agreement made with the Board and/or investors, he/ she will be required to return compensation and benefits he/ she has received to the company and may be subject to civil penalty and/or criminal punishment.

CEO Compensation 2022

             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 linked with long-term strategic direction and business plan (e.g. financial return, key strategic projects execution and key strategic enablers) to ensure corporate KPIs that meet vision and strategic aspiration in long term, in addition to Thaioil’s business achievements, factors supporting sustainable growth, corporate image, and social and community responsibility achieved with transparent and truly beneficial practices.

 

 

Remuneration 2022

CEO

Executive

Base Salary

10,926,000

74,577,000

Other cash incentives

5,463,000

48,047,000

Total

16,389,000

122,124,000

*Sum remuneration of all executive 12 persons EVP level upwards

 

Employee Compensation

Median Employee Compensation

Mean Employee Compensation

Median and mean annual compensation
of all employees except CEO

1,027,000

1,395,000

Ratio between annual compensation of
CEO and the mean and median employee compensation

15.96

11.75

Management Ownership

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 5 to 7 times of annual base salary. This aims to strongly encourage our executive management to drive the company for the sustainable long-term success, and to gain trusts from our investors.

In 2022, the Company’s shareholding report of the Board of Directors and the Company’s Management including of spouse, unmarried partner, and minor was reported in the One Report 2022 on pages 144.

Share Ownership 2022
Position name(s)

Multiple of Annual Base Salary

CEO

Mr. Bandhit Thamprajamchit

0.02

Average of other executives
committee members owning
shares 

Mr. Chatapong Wungtanagorn
Ms. Rungnapa Janchookiat
Ms. Wanida Boonpiraks
Mr. Viroj Wongsathirayakhun
Mr. Santi Wasanasiri
Mr. Surachai Saengsamran
Ms. Wanwisa Yanchinda

0.45

*Mr. Bandhit Thamprajamchit held 2,400 shares, Mr. Chatapong Wuntanagorn held 105,657 shares, Mr. Rungnapa Janchookiat (By spouse 100 shares), Ms. Wanida Boonpiraks held 6,585 shares, Mr. Viroj Wongsathirayakhun held 21,600 shares, Mr.Santi Wasanansiri held 66,576 shares (held 10,976 shares and by spouse 55,600 Shares) Mr. Surachai Saengsamran held 107,000 sharesand Ms. Wanwisa Yanchinda held 5,424. Please find more details on share ownership reported on pages 144 One Report 2022.

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, management, and employees to adhere to while performing their duties.

  •                  
  •