Corporate Governance Policy and Corporate Governance Handbook were developed for Board of Directors, executives, and employees of IRPC and its subsidiaries, associates, and joint ventures within IRPC’s control to observe as practical guidelines. This policy is to promote IRPC as an efficient company marked by good corporate governance, operational excellence, business righteousness, free from fraud, transparent, and open to scrutiny.
For more information on the Corporate Governance Policy, please visit IRPC’s Good Corporate Governance Policy [link] , for IRPC’s Anti–Fraud and Anti–Corruption Policies and Guideline please visit [link]
IRPC CG Handbook
Thai Version [link]
English Version [link]
The Board plays a key role in defining IRPC’s vision, key strategies, policies, and plans, taking into account risk factors and laying down suitable management approaches, while ensuring that the accounting, financial, and audit systems are credible.
The Board consists of four sub-committees, namely the Audit Committee, the Nomination and Remuneration Committee, the Corporate Governance Committee, and the Risk Management Committee, to take care of all important issues in the company. The president and executive management are responsible for implementing the policy and principles determined by the Board to be of interest to the company and its stakeholders.
IRPC’s corporate governance system ensures that a company is managed in the interests of shareholders. It includes checks and balances that enable the Board of Directors to have appropriate control and oversight responsibilities. In addition, management incentives have to be set in such way that management interests are aligned with shareholders’ interests.
The composition of the Board is in compliance with the Corporate Governance Policy. The Board of Directors must consist of director members that are knowledgeable, skilled, and experienced in IRPC’s business interests. The Board must completely dedicate their time to fulfilling their duties. To this end, IRPC has defined the Board’s composition and key qualifications, as well as the length of their appointment, as follows:
The qualifications of an Independent Director complies with the criteria of the Thai Securities and Exchange Commission (SEC), such as no involvement in management functions of the Company and subsidiary; no blood or legal relation to another Director; no business relationship; and is not an auditor of the company. In addition, the criteria of IRPC are more stringent than the SEC regulation, such as Independent Director must also hold no more than 0.5% of all shares with voting rights of the Company, which is a stricter regulation than that of SEC’s limit of 1%.
For more information on Board structure, please visit Board of Director. [link]
According to corporate governance principles adopted by IRPC, one-third of the Board of Directors shall be independent directors. Both directors and independent directors shall serve a 3-year term. Independent directors retiring may seek to be re-elected by shareholders; however, they may only serve up to three consecutive terms or nine years. There shall be no exceptions. Independent directors shall possess the expertise and qualifications of independence pursuant to notifications of the Capital Market Supervisory Board and stipulations of the Board of Directors. According to company policy, independent directors shall hold no more than 0.5 percent of IRPC’s issued shares; this requirement is more stringent than the 1 percent stipulation of the Securities and Exchange Commission. The definition of an IRPC independent director shall be disclosed in the Corporate Governance Handbook and on the company website. Independent directors shall be free to speak their mind at every meeting. They shall attend meetings regularly and have access to sufficient financial and business information, which enables them to express their thoughts freely and in the best interests of stakeholders. In doing so, they shall also prevent conflicts of interest between IRPC and its executive officers, authorized directors, and majority shareholders.
IRPC defined and compared Independents Directors’ qualifications, showing that they are consistent and more stringent than the requirements of the Stock Exchange Commission (SEC)’s and Dow Jones Sustainability Indices (DJSI)’s criteria, please visit Independent Directors’ Qualification. [link]
The Board of Directors has to build in the necessary checks and balances to avoid a potential abuse of power by appointing one person to fulfill the roles of Chairman and President.
The principal role of the Chairman is to manage and to provide leadership to the Board of Directors of the company; to promote and oversee the highest standards of corporate governance within the Board and the company; and to lead the Board, particularly in discussions on all proposals put forward by the management team.
IRPC supports an appropriate balance and diversity of skills, experience, race and gender, and the appointment of directors must be transparent and comply with the Corporate Governance Policy. The Nomination and Remuneration Committee will recruit and nominate suitable individuals and give an adequate profile for the Board’s consideration. The Board then proposes suitable candidates to the shareholders for approval, taking into account the Board’s diversity policy. When replacing a director that resigns before ending their term, the Board will decide who to appoint. Nomination and Remuneration Committee will consider the qualifications in order to recruit and nominate a suitable person.
For more information on Board Diversity Policy, please visit Policy of Board Diversity in the Directors Nomination Process [link] and [link] . Moreover, for information on the employee diversity policy, please visit Diversity and Inclusion Policy [link]
The performance assessment of the Board of Directors, specified in the Corporate Governance Handbook, consists of: self-evaluation, performance evaluation of the Board of Directors, performance evaluation of the sub-committees, performance evaluation of the Chairman and Individual Directors, and reporting the results to the Corporate Governance Committee and shareholders. The Nomination and Remuneration Committee reviews the compensation for the Board, gives a recommendation to the Board for approval, and proposes the compensation amount to the annual general meeting for transparent approval based on Compensation Best Practices released by the Thai Institute of Directors Association.
For more information on the results of the Board’s performance assessment, please visit Corporate One Report [link] or Summary of Annually Board’s Performance Assessment and Board’s Independent Assessment [link]
According to IRPC’s Corporate Governance Handbook, to obtain the right blend of essential competencies, the Board should consist of at least three Directors knowledgeable about the petroleum and petrochemical businesses, at least one knowledgeable in law, and at least one knowledgeable in accounting or finance. The following need to be considered, as stipulated in the nomination policy and criteria, educational background, skill management in such function, and significant achievement and recognition within the comparable scale of business.
Board skill matrix [Link]
The Board of Directors has stipulated that the president of IRPC shall submit to an annual performance review by the Nomination and Remuneration Committee. The Board then determines the remuneration of the president based on the results of this review; however, these results are considered undisclosed private information. The criteria were defined to cover challenging targets in accordance with the company’s short-term and long-term strategies, both monetary and non-monetary performances, including social, community and environmental responsibility. The President accepted and harnessed their utmost potential in managing the business and leading the organization forward in line with two assessment indicators: corporate KPIs (worth 70% of the assessment) and supporting factors that boost transparency and sustainability of the company (30%). The 30 percent includes the ability to lead the organization and solve problems that affect IRPC and its stakeholders in a timely manner with accuracy and success in order to create a good corporate image and corporate governance. Details are outlined below
The president’s annual salary adjustment and bonus are dependent on the results of this performance review and are subject to the approval of the Board of Directors. In addition to challenging targets, these criteria comprehend key performance indicators of the company’s strategic plan and vision; corporate responsibilities for communities, society, and the environment; and a balanced scorecard. The remuneration of the president is comparable to that of others within the same or similar industries.
IRPC also performs an evaluation of the company’s performance relative to their peers against a broad spectrum of financial metrics in order to determine how a president’s salary stacks up against the company’s relative financial performance. IRPC calculates its company’s and its peer group’s financial metrics over a three-year period. The weighted average performance rank is compared to the IRPC’s president’s salary rank (relative to peer company president’s salary) to yield a relative financial performance results.
IRPC discloses the fixed and variable compensation of the president and executives as follows:
|Executive Level 1|
|President and CEO(1 person)||Other Executives(5 people excluding president and CEO)|
Note:1. Executive Level 1 definition according to the Securities and Exchange Commission consists of : i) President and CEO; ii) Senior Executive Vice President of Corporate Accounting & Finance, Corporate Strategy, Corporate Commercial and Marketing, Corporate Organization Effectiveness, Innovation and Operation Excellence, and Petrochemical and Refinery Operation. 2. The total President’s remuneration included from IRPC and PTT.
Furthermore, IRPC discloses the mean and median annual compensation of all employees and the ratio between the mean and median employee compensation and the total annual compensation of the President in the table below.
|Employee Compensation (THB)||Median Employee Compensation||Mean Employee Compensation|
|Median/mean annual compensation of all employees, except the President||1,585,298||1,882,039|
|Ratio between the total annual compensation of the President and the mean or median employee compensation||7.12||5.99|
IRPC also discloses employee’s remuneration by employee category and gender as shown below.
|Employee Level||Average Female Salary||Average Male Salary||Ratio|
|Executive level (base salary only)||6,043,610||6,465,396||0.93|
|Executive level (base salary + other cash incentives)||6,897,269||8,721,100||0.79|
|Management level (base salary only)||2,557,272||1,643,531||1.56|
|Management level (base salary + other cash incentives)||2,581,209||2,752,138||0.94|
Clawback Provision: IRPC’s clawback provision is based on the Securities and Exchange Act B.E. 2551. Under Section 89/7, executive management is responsible to manage the company with caution and integrity, and to comply with laws and regulations, objectives and requirements of the company, agreement from board of directors and agreement from the investors. Additionally, the executive management can be prosecuted under Section 89/18, which can be used and does not conflict with section 89/19, if proven that they have not been performing their duties according to 89/7 or if prevalence of misconduct by an Executive Director or misconduct through their direction or non-direction. The executive management or anyone involved must return the benefits they received.
Management Ownership Requirement: To drive and promote individual ownership, part of corporate’s desired behavior and a theme of IRPC DNA, our CEO has encouraged IRPC employees, especially executive members, to voluntarily hold IRPC’s shares in order to build commitment and gain long-term trust from our investors. However, all must strictly comply with regulations set by the Securities and Exchange Commission in order to prevent insider or unethical trading. For more information on number of shares held by CEO and the executive members please see below;
President and other executive officers hold company shares (as of Dec 2022)
|Position||Name(s)||Multiple of base salary|
|President and CEO||Mr. Kris Imsang||0|
|Average for other executive committee members||IRPC’s Executive level refer to the position that has one level below president position, which is equivalent to senior executive vice president level.Names of IRPC’s executives that hold IRPC shares are as follows:
Mr. Woravuth Sivapetranart
Mr. Pranarch Kosayanont
Ms. Wanida Utaisomnapa
In 2022 and throughout the past five years, no directors or executive officers have any record of wrongful activities under the Securities and Exchange Act B.E. 2535 (1992) or Derivatives Act B.E. 2546 (2003), or any record of the following:
IRPC’s policy claims one share is one vote, and does not offer golden shares or dual class shares to any shareholders or under any circumstances. Referring to non-voting depository receipt (NVDR), NVDR holders cannot be involved in company decision-making, therefore, the holders cannot be granted voting rights. Definition of NVDR is found on Stock Exchange of Thailand’s website. [link]