Corporate Governance Report

The Group’s governance framework is designed with reference to the applicable legislations and Listing Rules, and is backboned by a collection of guidelines, policies and procedures formulated by the Board. The Board and/ or the relevant board committees conducted regular review of the aforesaid guidelines, policies and procedures which are subject to amendments from time to time due to changes in applicable legislations and Listing Rules and/or market practices. Such guidelines and policies include:

• Director’s Manual
• Guideline on Risk Management & Internal Control Systems
• Enterprise Risk Management Policy
• Enterprise Risk Management Manual
• Anti-Fraud and Counter-Corruption Policy
• Whistleblowing Policy
• Board Diversity Policy
• Shareholders’ Communication Policy
• Corporate Governance Manual
• Corporate Policy on Staff Responsibility
• Disclosure Policy for Inside Information
• Dividend Policy
• Sustainability Policy
• ESG Board Oversight Statement
• Terms of reference for various board committees

• For the purpose of enabling long term success of the Group and enhancing shareholder value, the Board develops the culture, sets the overall strategy and directs the affairs of the Group, as well as supervises management and ensures good corporate governance policies and practices are implemented within the Group.

• In the course of discharging its duties, the Board acts with integrity and in good faith, with due diligence and care, and in the best interests of the Company and its shareholders as a whole.

• The Board is responsible for performing the corporate governance duties. Specific terms of reference are set out in the Corporate Governance Manual of the Company and the relevant duties include:
  
  (a) to develop and review the Company’s policies and practices on corporate governance;
  
  (b) to review and monitor the training and continuous professional development of directors and senior management;
  
  (c) to review and monitor the Company’s policies and practices on compliance with legal and regulatory requirements;
  
  (d) to develop, review and monitor the code of conduct and compliance manual (if any) applicable to employees and directors; and
  
  (e) to review the Company’s compliance with the CG Code and disclosures in the Corporate Governance Report.

• Our culture, developed throughout the years, encompassing thoughts, beliefs, attitudes, norms and behavioural patterns being put in practice by our directors and staff, is endogenous in nature. The reflection of the intrinsic part of our culture was revealed by the interviews with colleagues conducted in FY2022 and was refined into our core values: “Act with Integrity”, “Grow as One”, “Advance with Agility”, “Create Shared Value” and “Evolve Sustainably”. The common practice of our core values is integral to our purpose of fostering connectivity for our communities to thrive, the mission of connecting people, goods, and capital through our market-leading business portfolio as well as our strategy to crystalise value from our business portfolio to achieve long-term, steady and sustainable growth and exercise prudent risk management, which is designed to create value for our shareholders, employees and wider community. Our business decisions for achieving our purpose and mission, and the implementation of strategy, have all been guided by our core values:

Act with Integrity

• Integrity is firmly embedded within the organizational construct. Our directors, management and other employees must act lawfully, ethically and responsibly. They are required to behave in an honest, ethical, and morally upright manner in all their dealings and interactions, to make decisions with the Company’s reputation in mind, act in conscience and exercise sound judgment. The standards and behaviours expected of them are explicitly set out in such documents as the Corporate Policy on Staff Responsibility, Employee Handbook (including the Code of Conduct), Anti-Fraud and Counter-Corruption Policy, Conflict of Interest Policy and Whistleblowing Policy. By organizing anti-corruption training in 2023, basic concepts as well as related policies were clearly communicated. Through the implementation of the Whistleblowing Policy, we are fostering an open environment where our employees and third parties feel comfortable to raise concerns. All of the above further enhance the established practice of acting with integrity of our directors, management and employees.

Grow as One

• We pursued the growth of both the Company and the staff and we are putting in place measures so that the staff could share the success of the Company in terms of tangible and intangible rewards. We also believed high employee engagement and personal growth are both crucial to the success of an organization and during FY2023 we have organized various events and activities to that end. The Company endeavours to cultivate a workplace culture which advocates taking personal ownership and accountability by hosting a number of staff engagement initiatives and activities, just to name a few, the 20th listing anniversary dinner to celebrate the 20 years of listing on the Hong Kong Stock Exchange under the name of NWS Holdings Limited, leadership training and coaching, senior management’s open dialogue with staff and participation at staff events, Flexi Care Programme to promote caring and flexible work arrangements, team building events, informal staff gatherings, yoga classes, health talks, wellness subsidy, A.Life mobile app for staff to express their appreciation. We are creating a workplace where everyone feels valued, appreciated and heard. The more employees are connected with us, the more we “Grow as One”.
• As we moved into our new office space in Cheung Sha Wan in November 2022, we established a dynamic workplace of creativity, flexibility and connectivity that delivers a cohesive culture and inspires innovation: multi-use space, dedicated breakout areas for collaborative efforts, portable notebooks, ergonomic furniture and so on. As a token of appreciation towards staff’s effort in our office relocation, each staff received a limited edition gift box set.

Advance with Agility

• In face of the rapidly changing economic, social, geopolitical and regulatory landscape, we remain agile to address the challenges ahead with the aim of mitigating risk associated therewith and leverage on opportunities arising therefrom. With this in mind, we must be smart enough to realize synergies from our diversified business model, which alongside our risk-aware culture, will enable us to navigate amid the volatilities. To this end, business briefing sessions were conducted to facilitate directors’ interaction with senior management and discharge of directors’ oversight responsibilities. Additionally, an important part of building a strong culture is to ensure that our leadership team possesses the appropriate skills and traits. We seek to invest in leadership development through one-on-one coaching or group workshops to enhance management capability. For the sake of all stakeholders, the Board will continue to explore ways to propel the Group along the path of success.

Create Shared Value

• As an environmentally and socially responsible enterprise, we nurture a culture where “Create Shared Value” is celebrated. Active engagement with our stakeholders helps to create value for each other, which is crucial for the sustainable growth of the Group.
• By working closely with our value chain partners, we have built a relationship of trust that fosters a positive vibe of experience and best practice sharing. Such collaboration along the value chain is beneficial to our future growth and development.
• The Company participated in various community initiatives to alleviate poverty and support the vulnerables, such as the HKSAR government’s Strive and Rise Programme and The Salvation Army’s “To.Gather Community Housing Project”. More than 310 volunteering activities were organized by NWS Volunteering Alliance (Hong Kong and Mainland China) during FY2023 and up to September 2023, the accumulated hours of volunteer service reached 242,400. Placement opportunities are offered for young people who are about to start their work journey.

Evolve Sustainably

• During FY2023, in support of local and national carbon neutrality targets and to fortify our determination to transition to a low carbon economy, the Group has started to formulate its first net zero strategy and roadmap. We have taken a step forward by implementing the “ESG Due Diligence Guideline for Investment” to identify and evaluate sustainability-related risks before making investment decisions. “Evolve Conference 2023” offered a valuable opportunity to share insights on innovative sustainability practices with management and different business units. Training sessions and corporate-wide training videos also helped employees to build awareness. Through education and practice, we can make sustainability a part of our DNA. For more details on our sustainability efforts and initiatives, and their relationship with our core values, please refer to our separate 2023 Sustainability Report.

Delegation by the Board

• Day-to-day operation of the businesses of the Company is delegated to the management which is led by the Executive Committee. The management is closely monitored by the Board and is accountable for the performance of the Company as measured against the corporate goals and business targets set by the Board.
• The Board carries out certain of its oversight responsibilities through its committees, allowing more in depth attention devoted to overseeing key issues.

Board Diversity

• Our Board has a balance of tenure, diversity and age, with an effective mix of experience and fresh perspective. The following and the section “Board Expertise” illustrate the diversity profile of the Board members as at the date of this report:
  
  
• When considering new or replacement appointment of board members, we might seek appropriate candidates to enhance gender diversity of our Board. Following the change of board composition during FY2023, including the appointment of Ms Ng Yuen Ting, Yolanda as an independent non-executive director of the Company on 1 December 2022, the proportion of female representation at board level has been increased from 6% to 13%. We are committed to maintaining board representation by director(s) of each gender to be no less than 10%.

Board Expertise

• Our directors bring varying perspectives to the Board based on their distinct backgrounds and experience. The table below highlights the attributes of our directors, whose capability aligns with the scale, complexity and strategic positioning of our business:
  
  

Nomination

• Our Nomination Committee evaluates directors’ perspectives in the context of our Company’s evolving business and prioritizes diversity to ensure effective Board oversight. Recognizing that the selection of qualified directors is crucial to the long-term success of the Company, formal nomination procedures were adopted by the Board for governing the nomination of directors. Nomination Committee’s process for identifying and recommending candidates are as follows:

Appointment

• The Board, having considered the recommendation from the Nomination Committee, will decide whether to approve the proposed appointment.

• None of the directors of the Company has a service contract which is not determinable by the Company within one year without payment of compensation (other than statutory compensation).

• All non-executive directors are appointed under fixed term of three years and are also subject to retirement on a rotational basis in accordance with the bye-laws of the Company.

Re-election

• The Nomination Committee will make recommendations to the Board on the re-appointment of directors as appropriate, having regard to the profile of the director seeking re-appointment, the strategy of the Company and the structure, size and composition of the Board at the relevant time.

• The Board will consider whether to put forward the proposal for re-election of directors for shareholders’ consideration.

• Newly appointed directors
  All directors appointed to fill a casual vacancy on the Board or as an addition to the existing Board shall hold office only until the next annual general meeting of the Company and shall then be eligible for re-election at that meeting.

• Existing directors
  One-third of the directors who have been the longest in office since their last re-election or appointment shall retire and be eligible for re-election at each annual general meeting. Each director is subject to retirement by rotation at least once every three years.
  

   

  Any further re-appointment of an independent non-executive director, who has served the Board for more than nine years, will be subject to a separate resolution to be approved by the shareholders. The Nomination Committee and the Board consider the factors and discuss why the proposed director is still independent.

Board Committees

• The Board delegates its powers and authorities from time to time to committees in order to ensure operational efficiency and specific issues are handled with relevant expertise.
• Six board committees have been established and each of them has its specific duties and authorities set out in its own terms of reference which are reviewed from time to time.
• Written terms of reference of each of the Audit Committee, the Nomination Committee and the Remuneration Committee are available on the website of each of the Hong Kong Stock Exchange and the Company pursuant to the requirements under the Listing Rules.
• Written terms of reference of each of the Sustainability Committee and the Corporate Governance Committee are available on the website of the Company.
• Regular board committee meetings were held during the year and the number of meetings and attendance of individual committee members are set out on page 43 of this annual report.
• All board committees are provided with sufficient resources to discharge their duties and are empowered to obtain independent legal or other professional advice at the Company’s expense.

Executive Committee

Major roles and functions

• to review the Group’s performance, direct its daily operations and manage its assets and liabilities in accordance with the policies and directives of the Board
• to make recommendations to the Board in respect of the overall strategy for the Group from time to time

Audit Committee

Major roles and functions

• to monitor the financial reporting process of the Company and to ensure its financial statements comply with relevant accounting standards
• to review the Company’s financial control, risk management and internal control systems and arrangements under the Company’s “Whistleblowing Policy”
• to govern the engagement of external auditor and its performance and independence

Nomination Committee

Major roles and functions

• to review the structure, size and composition (including the skills, knowledge and experience) of the Board, including from the aspect of diversity
• to identify qualified individuals and to make recommendations to the Board on the appointment or re-appointment of directors

Remuneration Committee

Major roles and functions

• to review and make recommendations to the Board on the Company’s policy and structure for remuneration of directors and senior management and on the establishment of a formal and transparent procedure for developing policy on such remuneration
• to make recommendations to the Board on the remuneration packages, including benefits in kind, pension rights and compensation payments, of individual directors
• to determine the remuneration packages of senior management

Sustainability Committee

Major roles and functions

• to review and report to the Board on the Group’s sustainability frameworks, standards, priorities and goals, and to oversee group-level strategies, policies and sustainability matters to attain those standards and goals
• to oversee and evaluate the Group’s sustainability performance in terms of internationally-recognized metrics relevant to the industry
• to review and advise the Board on public reporting of the Group’s performance on sustainability matters
• to oversee the Group’s community, charitable and environmental partnerships, strategies and related group-level policies

Corporate Governance Committee

Major roles and functions

• to develop and review the Company’s policies and practices on corporate governance and to make recommendations to the Board
• to review and monitor the training and continuous professional development of directors and senior management of the Company
• to review and monitor the Company’s policies and practices on investor relations, and compliance with legal and regulatory requirements

• The Company’s directors acknowledge their responsibilities to prepare accounts for each half and full financial year which give a true and fair view of the state of affairs of the Group. The directors consider that in preparing financial statements, the Group ensures statutory requirements are met, applies appropriate accounting policies that are consistently adopted and makes judgements and estimates that are reasonable and prudent in accordance with the applicable accounting standards.

• The directors are responsible for taking all reasonable and necessary steps to safeguard the assets of the Group and to prevent and detect fraud and other irregularities within the Group. They consider that the Group has adequate resources to continue in operational existence for the foreseeable future and are not aware of material uncertainties in relation to events or conditions that may cast significant doubt upon the Company’s ability to continue as a going concern. The Group’s financial statements have accordingly been prepared on a going concern basis.

• The directors are responsible for ensuring that proper accounting records are kept so that the Group can prepare financial statements in accordance with statutory requirements and the Group’s accounting policies. The Board is aware of the requirements under the applicable Listing Rules and statutory regulations with regard to the timely and proper disclosure of inside information, announcements and financial disclosures and authorizes their publication as and when required.

• Risk management and internal control are essential parts of corporate governance. With reference to the “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), ISO 31000 Risk Management Standard from International Organization for Standardization (“ISO”), and the “Internal Control and Risk Management – A Basic Framework” issued by HKICPA, the main features of our risk management and internal control systems are illustrated below:

Board Meeting

• The Board meets regularly at least four times a year at quarterly intervals and holds additional meetings as and when the Board thinks appropriate. Seven Board meetings were held during FY2023.

• Notice of no less than 14 days was given to all directors for the regular Board meetings. Draft agendas for Board meetings were prepared by the Company Secretary and were circulated to all directors for comment before each meeting. Directors were given an opportunity to include any other matters in the agenda. As far as practicable, board papers were made available to the directors not less than three business days before the intended date of the Board meetings.

• Minutes of Board meetings were prepared by the Company Secretary with details of decisions reached, any concerns raised and dissenting views expressed. The draft minutes were sent to all directors within a reasonable time after each meeting for their comment before being formally signed by the chairman of the meeting. Final versions of minutes of the Board meetings were made available to the directors for information and record.

• At each regular Board meeting, executive directors of the Company made presentations to the Board on various aspects, including business performance, financial performance, corporate governance and outlook, etc.

• Throughout FY2023, directors of the Company also participated in the consideration and approval of matters of the Company by way of written resolutions circulated to them. Supporting written materials were provided in the circulation and verbal briefings were given by the subject executive directors or the Company Secretary when required..

• Pursuant to the bye-laws of the Company, a director, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with the Company shall declare the nature of his/her interest at the meeting of the Board at which the question of entering into the contract or arrangement is first considered. Furthermore, a director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he/she or any of his/her close associates is to his/her knowledge materially interested. Matters to be decided at Board meetings are decided by a majority of votes from directors entitled to vote. These bye-laws were strictly observed throughout FY2023.

Seminars and business briefings

• Seminars are arranged or organized from time to time as part of the training programme to develop and refresh knowledge and skills. During FY2023, seminars on corporate governance related topics including regulatory updates, anti-corruption, cybersecurity, risk management, sustainability related topics and management skills were organized for directors.

• During FY2023, business briefings to directors on construction and logistics businesses were conducted, providing a useful channel for two-way communication between directors and management and facilitated active participation of directors.

Director Induction

• Newly appointed directors are provided with orientation immediately upon his/her appointment that includes an overview of the Company’s business strategy and operations, financial condition, legal and regulatory framework and other relevant topics.

• They are also provided with a director’s manual containing a package of orientation materials on the operations and businesses of the Group, together with information relating to the duties and responsibilities of directors under regulatory requirements and the Listing Rules.

Legal and Regulatory Updates

• The Company Secretary updates directors on the latest developments and changes to the Listing Rules and the applicable legal and regulatory requirements. Reading materials on regulatory updates are provided to directors to refresh their knowledge.

• An online training platform was introduced since 2019 of which directors can access the training materials provided by the Company through the Company’s board website.

• The Board recognizes the importance of communication with the Company’s shareholders. A “Shareholders’ Communication Policy”, which is published on the Company’s website, was adopted by the Board for ensuring effective and transparent communication between the Company and its shareholders.
• According to the Shareholders’ Communication Policy:
  • corporate communications which contain regulatory disclosures and notices of the Company, are published in accordance with the legal and regulatory requirement applicable to the Company. Corporate communications and other general information concerning the Company and its businesses are posted on the corporate website (www.nws.com.hk) and/or distributed to the media as soon as practicable.
  • shareholders are encouraged to participate in general meetings or to appoint proxies to attend and, on poll, vote at meetings for and on their behalf if they are unable to attend. The chairman of general meetings will allow reasonable time for shareholders to raise questions and comments during the meeting.
  • the Company’s investor relations team, comprising directors and members of senior management, regularly arranges or participates in one-on-one meetings, roadshows, conferences, forums, site visits and briefing sessions to maintain an open dialogue with financial analysts and institutional investors in Hong Kong and overseas.
  • for the purpose of enhancing effective communications, all shareholders are encouraged to send their enquiries and views on various matters affecting the Company by email to the Investor Relations Department of the Company at ir@nws.com.hk.

• To ensure all shareholders have equal and timely access to important company information, the Company makes extensive use of the Company’s website to deliver up-to-date information. Latest information regarding the activities and publications of the Group, including financial reports, policies on corporate governance and sustainability, media resources as well as presentations and webcasts delivered by management are readily accessible on the Company’s website at www.nws.com.hk.
• The Company’s annual report is printed in both English and Chinese and is available on the Company’s website. Shareholders may at any time change their choice of means of receiving the Company’s corporate communications free of charge by notice in writing to the Company’s branch share registrar in Hong Kong, Tricor Standard Limited.

Shareholders’ Rights

• The Board and management shall ensure shareholders’ rights and all shareholders are treated equitably and fairly. Pursuant to the Company’s bye-laws, any shareholder entitled to attend and vote at a general meeting of the Company is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. Shareholders who hold not less than one-tenth of the paid up capital of the Company shall have the right, by written requisition to the Board or the Company Secretary, to require a special general meeting to be called by the Board for the transaction of any business specified in such requisition.

• The procedures for shareholders to put forward proposals at general meetings are stated as follows:

  1. The written requisition must state the purposes of the meeting, and must be signed by all the shareholders concerned and may consist of several documents in like form each signed by one or more shareholders concerned.

  2. The written requisition must be deposited at the Company’s registered office in Bermuda as well as the principal place of business in Hong Kong at 21/F, NCB Innovation Centre, 888 Lai Chi Kok Road, Cheung Sha Wan, Kowloon, Hong Kong for the attention of the Company Secretary.

  3. The written requisition will be verified with the Company’s branch share registrar and upon their confirmation that the request is proper and in order, the Company Secretary will ask the Board to include the relevant resolution in the agenda for such general meeting provided that the shareholders concerned have deposited a sum of money reasonably sufficient to meet the Company’s expenses in serving the notice of the resolution and circulating the statement submitted by the shareholders concerned in accordance with the statutory requirements to all the registered shareholders. Such general meeting shall be held within two months after deposit of such requisition.

  4. If within 21 days of such deposit, the Board fails to proceed to convene such general meeting, the shareholders concerned, or any of them representing more than one half of the total voting rights of all of them, may themselves convene a meeting, but any meeting so convened shall not be held after the expiration of three months from the said date.

• Chairman of each of the board committees, or failing the Chairman, any member from the respective committees, must attend the annual general meetings of the Company to address shareholders’ queries. External auditor is also invited to attend the Company’s annual general meetings and is available to assist the directors in addressing queries from shareholders relating to the conduct of the audit, the preparation and content of its auditor’s report, the accounting policies and auditor independence.