Roles and responsibilities

The Board
The Board is responsible for the overall governance of the Manager, including establishing goals for management and monitoring the achievement of these goals. The Board has established a framework for the management of Sunway REIT, including a system of internal control and business risk management processes.

The Board comprises five members, two of whom are Independent Non-Executive Directors. The Board principally oversees the day-to-day management of the Manager’s affairs and the conduct of its business and is responsible for the overall governance of the Manager. The Board exercises its general powers within the limits defined by the Manager’s Articles of Association, with a view to ensuring that Management discharges its duties and is compensated appropriately, and that sound internal control policies and risk management systems are maintained. The Board will also review major financial decisions and the performance of the Manager. In accordance with the REIT Guidelines, the Manager is required to act in the best interests of Unitholders, to whom it owes a fiduciary duty.

Independence of Directors
In assessing the independence of a Non-Executive Director, the Board will take into account the following factors, none of which is necessarily conclusive. Independence is more likely to be questioned if the Director:

• is an executive director of the Manager or its subsidiaries or of any connected person of Sunway REIT;

• holds 5% or more of the total issued units;
  
  
• had personally provided advisory services to the Manager or its subsidiaries or with Sunway REIT within the last two years, or is presently a partner, director (except as an independent director) or major shareholder of a firm or corporation which has provided professional advisory services to the Manager or its subsidiaries or with Sunway REIT within the last two years;

• had engaged personally in transactions with the Manager or its subsidiaries or with Sunway REIT within the last two years, or is presently a partner, director or major shareholder of a firm or corporation which has engaged in transactions with the Manager or its subsidiaries or with Sunway REIT within the last two years;
  
  
• is on the Board specifically to protect the interests of an entity whose interests are not the same as those of the Unitholders as a whole;

• is connected with a Director or the chief executive of the Manager or its subsidiaries, or with a significant holder of Sunway REIT; and
  
  
• is, or has at any time within the last two years immediately prior to the date of his proposed appointment been, an officer (other than an independent non-executive director) of the Manager or its subsidiaries or of any connected person of Sunway REIT.

Compensation of Directors
Directors who are also employees of the Manager receive compensation in the form of salaries, allowances and benefits-in-kind, including the Manager’s contribution to the mandatory provident fund scheme for its Directors. The remaining Directors receive fees from the Manager. Compensation of the Directors shall be, from time to time determined by the Manager in a general meeting.

Appointment and removal of Directors
The Board has the power to appoint any person to be a Director, either to fill a vacancy or as an addition to the existing Directors. Shareholders of the Manager may by Ordinary Resolution remove any Director and appoint another person in his stead. One-third of the Directors who are subject to retirement by rotation will retire at every annual general meeting with the exception of the first annual general meeting whereby all Directors shall retire from office. A retiring Director shall be eligible for re-election. The retiring Directors on each occasion will be those Directors who have remained in office the longest since their last appointment or re-appointment. As between persons who become Directors on the same day, those to retire shall (unless otherwise agreed among themselves) be determined by lot.

A Director’s office will be vacated in the following circumstances:

• When a petition is filed under bankruptcy laws or the Directors are declared bankrupt;
  
  
• A criminal proceeding for the conviction for fraud, dishonesty or any other offence punishable with imprisonment of one year or more, anywhere in the world;
  
  
• Any inquiry/investigation carried out by any government/statutory authority or body, in which an adverse finding was found;
  
  
• If the Director has been convicted by a court of law, whether within Malaysia or elsewhere, of an offence in connection with the promotion, formation or management of a corporation;
  
  
• If the Director has been convicted by a court of law, whether within Malaysia or elsewhere, of an offence, involving fraud or dishonesty or where the conviction involved a finding that he acted fraudulently or dishonestly;
  
  
• If the Director has been convicted by a court of law of an offence under the securities laws or the Companies Act;
  
  
• Any unethical practice and activity which would render the person unfit to be a director of a management company;
  
  
• Becomes of unsound mind; or
  
  
• Is absent from more than 50% of the total Board meetings held during a financial year.

Board meetings
Board meetings will be held at least four times per year. To ensure that Directors are given sufficient time to consider the issues to be tabled at the Board meetings, details of the venue and time of the meeting are required to be given at least seven days in advance of the meeting (except if there are exceptional circumstances or if the majority of Directors agree to a shorter notice period).

No Board meeting, or any adjourned Board meeting, will be quorate unless a simple majority of Directors for the time being (excluding any Directors which the Manager has a right to exclude for that purpose, whether pursuant to a contract or otherwise) is present at the time when the relevant business is transacted. A Director who, whether directly or indirectly, has a material interest in a contract or proposed contract with the Manager, which is of significance to the Manager’s business, must declare the nature of his interest either at the Board meeting or by giving a general notice to the Directors before the question of entering into the contract is taken into consideration on behalf of the Manager.
A Director prohibited from voting by reason of a conflict of interest will not be allowed to vote on the relevant matter and will not be counted for the purposes of establishing the necessary quorum for the meeting.

Matters to be considered by the Board will be adopted on the basis of a majority of votes. In the case of an equality of vote, the Chairman of the Board will have a casting vote.

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