SCG, a prominent conglomerate with a century-long legacy, was established in 1913 by a Royal Decree of His Majesty King Vajiravudh (King Rama VI) of the Chakri Dynasty, marking its inception as one of Thailand’s pioneering companies. Throughout its extensive history, SCG has persevered into the current era under the reign of His Majesty King Maha Vajiralongkorn Bodindradebayavarangkun (King Rama X) of the Chakri Dynasty, with approximately 33.6% ownership, remaining an exemplar of sound corporate governance practices, inspiring numerous other entities.

Guided by a steadfast business philosophy, SCG upholds the principles of responsibility, fairness, and transparency in organizational management, recognizing these as the cornerstones for sustained viability and value creation. Such adherence not only cultivates competitiveness and facilitates growth but also nurtures trust and confidence among stakeholders. At the helm of this commitment lie the Board of Directors and Executives, embodying the ethos of ‘Tone at the Top,’ steering the company towards excellence.

Governance Approach

SCG firmly upholds and complies with the principles of corporate governance both locally and internationally. The Board of Directors has approved to compile ethical and socially responsible policies, guidelines and practices for SCG Corporate Governance Principle, which serves as a blueprint for the Board of Directors, the Executives and employees for ethical conduct, organizational and business management, in line with SCG’s vision of becoming a beacon of corporate governance excellence. The first publication has been introduced in 2003 and undergone periodic updates to ensure relevance and effectiveness, with the most recent revision in 2021 published on the SCG website. (www.scg.com)

Governance Structure

In a dynamic and intricate business environment characterized by volatility, SCG’s governance framework is meticulously crafted to promote the tenets of corporate governance and decision making on the basis of effective and sufficient information. The objective is to mandate that all directors and executives discharge their responsibilities with utmost diligence, integrity, and adherence to legal mandates, regulatory requirements, shareholders’ resolutions, and other stipulated policies and guidelines. This commitment aims to maximize benefit of the organization, shareholders, and relevant stakeholders.

Board Structure & Composition of the Board of Directors

The Board of Directors is composed of esteemed, knowledgeable, and capable individuals tasked with formulating corporate purpose and objectives. They collaborate closely with top executives to devise both short-term and long-term business strategies, financial policies, risk management strategies, and organizational overview. Additionally, they undertake the annual review of the company’s significant policies and plans, play a pivotal role in allocation of critical resources to achieve business goals, while also providing independent oversight, monitoring, and evaluation of both the Company’s performance and that of its top executives.

In alignment with global corporate governance principles, the Company values the importance of the board diversity. This involves forming a board with a diverse range of skills, experience, business acumen, and industry expertise relevant to SCG’s operations including any other specific expertise which is beneficial to the Company (Board Skill Matrix), ensuring robust governance. SCG is committed to fostering respect for diversity and inclusion, as stipulated in its Diversity and Inclusion Policy, Consequently, diversity factors are integral to the board nomination process, without prejudice based on gender, age, ethnicity, nationality, religion, country of origin, cultural background, and tradition. This commitment enhances the Company’s ability to nominate individuals possessing the requisite qualifications for directorship, aligning with its business objectives.

The Sub-Committees

The Board of Directors has set up the Sub-Committees, including the Audit Committee, the Governance and Nomination Committee, the Remuneration Committee, and the CSR Committee for Sustainable Development. Each of these Sub-Committees is tasked with overseeing specific issues and directly reports to the Board of Directors for consideration or approval. To formalize these roles and responsibilities, the Company has implemented the Charters of the Board of Directors and the Charters of the Sub-Committees, delineating their respective rights and duties.

The Audit Committee

The Audit Committee, comprising three Independent Directors, is responsible for overseeing risk management, the performance of duties, and internal control including reviewing financial reports, internal control, internal audit to ensure that Company’s operations align with the policies, Articles of Association, and regulatory requirements. The Committee is dedicated to enhancing SCG’s financial and accounting reporting systems to adhere to international standards. Moreover, it ensures the establishment and maintenance of effective internal control, internal audit, and risk management systems within the company.

All members of the Audit Committee possess knowledge, skills, and expertise in accounting and/or finance, enabling them to effectively review the reliability of financial statements. The Committee fulfills its duties with independence and is empowered to express its opinions freely.

When reviewing the financial report and review internal controls, the Audit Committee prioritizes the auditor’s independence and the quality of the audit.  Accordingly, the Committee examined criteria for rotating auditing firms or auditors both domestically and internationally, presenting its findings to the Board of Directors for review. The Board resolved that audit firms shall be rotated every five years. It is recommended that the Company invites proposals from leading audit firms outlining audit services, procedures, and additional services. The auditor selection committee is responsible for choosing an audit firm and presenting it to the Audit Committee for approval.

The Governance and Nomination Committee

The Governance and Nomination Committee, consisting of three independent directors and one non-executive Director, is responsible for overseeing the proposal, revision, and supervision of the company’s corporate governance issues. This includes the nomination of qualified individuals to serve as directors to replace those who are retired by rotation, or as the case may be, the review on the performance evaluation system for the Board of Directors and the Sub-Committees and monitoring the evolving trends in the remuneration of the Board of Directors.

The Remuneration Committee

The Remuneration Committee, consisting of four Independent Directors, is tasked with reviewing succession plans for the President & CEO and other top executives. Additionally, it analyzes and monitors industry remuneration trends for top executives, aiming to propose remuneration policies to the Board of Directors that incentivize executive performance and promote the retention of competent and ethical employees.

The CSR Committee for Sustainable Development

The CSR Committee for Sustainable Development , consisting of six Directors and three Executives and/or Advisors, is tasked with establishing policies and guidance for CSR activities aimed at sustainable development. These initiatives are designed to align with environmental, social, and governance (ESG) principles, with targets linked to the Sustainable Development Goals (SDGs), emphasizing collaboration with stakeholders. Additionally, the Committee proposes the annual CSR budget and oversees its implementation, while also monitoring its own performance and reporting to the Board of Directors.

Governance Activities of the Board of Directors and the Sub-committees in 2023

Remunerations for the Board of Directors and the Top Executives

The Governance and Nomination Committee, designated by the Board of Directors, is responsible for proposing remuneration methods and processes for Board members and sub-committees. Additionally, the Committee remains updated on developments and potentialities concerning remuneration for the Board and top executives, presenting recommendations for the Board’s consideration. Furthermore, the Remuneration Committee, also appointed by the Board, is tasked with recommending policies for SCG management remuneration, encompassing salary and annual bonuses.

Policy on Remuneration of the President & CEO and Top Executives

To ensure equitable compensation management and maintain impartiality across various business units, both the Board of Directors and the Remuneration Committee evaluates the performance of the President & CEO and Top Executives. This evaluation is based on the Company’s operational achievements, adherence to Board policies, and prevailing socio-economic conditions. Subsequently, the Remuneration Committee reviews this assessment and recommends appropriate compensation for SCG’s President & CEO and Top Executives to the Board for approval.

In January 2024, the Board of Directors, acting upon the Remuneration Committee’s recommendation, approved the revision of evaluation criteria, predefined metrics on financials, ESG, innovation & new growth, customers & stakeholders, and people, and weightings for both short-term and long-term performance assessments of the President &CEO and top executives. These revisions aim to align with SCG’s overarching strategy and objectives. The performance evaluation encompasses:

Claw Back Provision

It is SCG policy to pay incentives to employees whose performance and behavior have been
found satisfactory. In case that an employee is not qualified for one’s duty or having any unappropriated
misconduct behavior, SCG may withhold the whole payment or partially, or recover sums already paid out.

Remuneration of President & CEO, and the Top Executives

The Board and the Remuneration Committee assess the performance of the President & CEO based on the Company’s operating results, implementation of the Board’s policies, and the overall socio-economic circumstances. The Remuneration Committee will then consider the appropriate remuneration for the President & CEO and top executives of SCG and propose such amount to the Board for approval.

Management Ownership of SCG Executives

SCG is dedicated to conducting business ethically, emphasizing responsibility to society and all stakeholders, guided by principles of good corporate governance and the SCG Code of Conduct. Directors and Top Executives are permitted to own company stocks in compliance with applicable laws and regulations, provided that they adhere to the Insider Trading Policy and Blackout Period which prohibit trading of SCG Securities before the public disclosure of quarterly and annual financial statements to mitigate the risks associated with potential misuse of insider information.

Remarks:

1. The Siam Cement Public Company Limited’s registered capital amounts to 1,600,000,000 Baht, with a paid-up capital of 1,200,000,000 Baht, equivalent to 1,200,000,000 shares.
2. Per Notification of the Capital Market Supervisory Board No. Tor Chor 72/2564, “Executives” refer to the manager, the subsequent four executives following the manager, individuals holding positions equivalent to the fourth executive, and those serving as managers or equivalent in the accounting or finance departments.
3. SCG executives, as defined by the Notification of the Capital Market Supervisory Board, encompass the aforementioned 14 members.
4. Related person: According to relevant laws and criteria, ordinary shares of a company held by the directors and executives include those held by spouses, de facto partners, and minors.
5. No. 13 and No. 14 are the Company’s chief officers in accounting and finance.

DOCUMENT DOWNLOAD

SCG Corporate Governance Principle
SCG Code of Conduct
Diversity and Inclusion Policy
CEO and Executive Compensation Management
Board Composition and Independence
SCG Board Industry Experience and Expertise
Summary of Enterprise Risk Management Experience of SCG Non-Executive Directors