The highest governance body in PowerSeraya Ltd is the Board of Directors (BOD) which provides organisational oversight on areas such as business strategy, risk management, employee compensation and company policies. The BOD has three committees to assist in the execution of its responsibilities:

1. Executive Committee – responsible for the company’s performance and business strategy

2. Audit Committee – responsible for the financial reporting, internal controls and compliance issue (operations and finance)

3. HR and Remuneration Committee – responsible for human resources policies and compensation matters.

The mandate and composition of the BOD as well as details of our BOD members can be found under the ‘Corporate Governance’ section of the Annual Report 2007/2008.

No, the chairperson of the BOD is not an executive officer of the company.

The BOD consists of seven members, six of whom are independent and non-executive members. The only executive member of the BOD is the Managing Director of PowerSeraya. A non-executive director is generally considered a director who has no involvement in the day-to-day running of the company and is not employed by the company. As such, a non-executive director will usually devote part of his time to the affairs of the company as an independent adviser on matters of policy and strategy.

PowerSeraya was a wholly owned subsidiary of Temasek Holdings Ltd during the reporting period. There are no minority shareholders, and PowerSeraya’s sole shareholder appoints the directors on the BOD.

Employees have the right to raise concerns anonymously through a whistle-blowing policy which is covered under the company’s Code of Ethics.

UPAGE (Union of Power and Gas Employees) represents our union members which make up more than half of the company’s staff. UPAGE and the management of the company meet on a regular basis to discuss topics relating to the welfare of the union members as well as areas of collaboration where the union and the management can work together to achieve company goals, among other issues.

The members of the Board of Directors are paid director’s fees on an annual basis for the roles and responsibilities they carry out. Papers covering financial, environmental and social subjects are tabled regularly at the BOD level. For dedicated attention, three committees (Executive Committee, Audit Committee and the HR and Remuneration Committee) are set up to scrutinise issues in greater detail, such as business planning and strategies; corporate governance and risk management; and human resource matters including industrial relations.

The BOD appoints directors to head and be members of the three committees. The directors are paid a fee for their role in heading and being a member of the three committees, which is over and above what they get as members of the BOD. The directors are also paid an attendance fee for attending each meeting.

All of our employees are covered in an established and structured performance management system where bonus and salary remuneration are tied to group and individual performance targets aligned to our overall performance goals – which include social and environmental performance. This is reflected in the environmental performance of the power plant operations as well as the environmental initiatives organised or supported by the organisation for employees and the community. The recent establishment of the Environmental Department in late FY06/07 shows our emphasis on corporate social responsibility with a focus on the environment. The bonus and increment of Environmental Department employees and the group heads concerned are tied to the performance of the corporate social responsibility goals which includes targets for environmental and social items. Our social performance includes the various community programmes covered under the corporate social responsibility goals. These goals form part of the corporate performance targets which are tracked by the BOD on a quarterly basis.

There is clear division of responsibilities between the Chairman of the BOD and the Executive Officer to ensure that there is balance of power and authority so that no one individual holds a disproportionate amount of power. The Chairman bears responsibility for the conduct of the Board and the Executive Officer bears responsibility for the Group’s business.

Our annual report includes annual financial statements which require directors to declare whether they have any interest in the shares or debentures of the company or its related corporations in accordance with the Singapore Financial Reporting Standards.

Our tender process for the procurement of products or services include procedures that require members of the Board of Directors to declare whether they have an interest in the suppliers or service providers bidding for the tenders.

PowerSeraya prescribes to the standards set by the Accounting Standards Council, which took over the task from the Council on Corporate Disclosure and Governance with the enactment of the Accounting Standards Act on 1 Nov 2007.

Our Board members are appointed on a yearly basis subject to a one-third rotation rule*, which allows for the Board to be refreshed on a regular basis. In sourcing and considering the candidates for appointment as directors to the Board, his qualifications and experience will be scrutinised by our Shareholder in relation to the prevailing composition of the Board expertise and the desired profile.

As is evidenced by the BOD profile of qualifications and expertise, the BOD comprises members who hold important positions in committees and councils at the national level and have working experience in both the private and public sectors, spanning areas of expertise in the oil and gas business, legal, corporate governance, tripartite (labour, employer, government) issues including employment practices, safety and the environment.

*At the company’s Annual General Meeting (AGM) held every year, one-third of the directors will retire from office. The directors to retire every year are those who have been longest in office since their last election. The election of new directors and the re-election of retiring directors are subject to The Companies Act.

Our vision is to be the leading integrated energy company in Singapore.

Our mission statement is: “At PowerSeraya, our relentless pursuit is to maximise value for our shareholders, customers employees and the community. We aim to create an enterprise value of S$3 billion by 2010.”

Our guiding business principles include:

Our core values are “Venture, Innovative, Best Practices, Respect, Accountability, Nurture and Teamwork” (VIBRANT for short)

Our Code of Conduct covers areas such as health and safety and fraud, which are relevant to environmental and social performance. Our Code of Ethics covers areas such as safe workplace and environment and whistle-blowing.

Each employee is given a copy of the Employee Handbook which covers the above statements of mission, vision and values. The corporate website and the intranet also communicate these corporate messages. We also have posters about them throughout the workplace.   

The BOD meets quarterly to be updated on the progress of the company’s performance which includes economic, environmental as well as social aspects. They also provide advice and direction on issues facing PowerSeraya and how to move the company forward. From time to time, the BOD appoints external consultants and auditors to augment expertise and provide advice on specific company matters. The BOD is supported by three main committees: the Executive Committee looks into the performance and business strategy which will cover economic, environmental as well as social performance; the Audit Committee looks into the risk management aspects of the organisation with the Risk Management Committee which provides quarterly reports; and the Human Resources and Remuneration Committee looks into HR policies as well as the Code of Conduct.

There are no formal processes to evaluate the performance of the BOD. However, there is the practice of re-electing and rotating BOD members for a second consecutive term which is an indirect means to evaluate members who wish to be considered for a new term. In addition, should a BOD member fail to attend meetings or conference calls, nor send their proxy vote, etc, the Chairman of the BOD, would in his/her best judgment, take action in line with the relevant rules and procedures.