CORPORATE GOVERNANCE
regulations are complied with. The appointment and the
removal of the Company Secretary is subject to Board’s
approval. The Company Secretary, together with the CEO
ensures good information flows between Management
and the directors.
The Board takes independent professional advice as
and when necessary, with approval from the Chairman,
to enable it to discharge its responsibilities effectively.
Individual directors can access independent professional
advice with the consent of the Chairman or ARCC
Chairman. For complex matters, the Board may from time
to time appoint a sub-committee to assist the Board in its
deliberations and to provide recommendations.
REMUNERATION MATTERS
PROCEDURES FORDEVELOPINGREMUNERATIONPOLICIES
Principle 7: There should be a formal and transparent
procedure for developing policy on executive
remuneration and for fixing the remuneration packages
of individual directors. No director should be involved in
deciding his own remuneration.
LEVEL AND MIX OF REMUNERATION
Principle 8: The level and structure of remuneration
should be aligned with the long-term interest and risk
policies of the company, and should be appropriate
to attract, retain and motivate (a) the directors to
provide good stewardship of the company, and (b) key
management personnel to successfully manage the
company. However, companies should avoid paying
more than is necessary for this purpose.
DISCLOSURE ON REMUNERATION
Principle 9: Every company should provide clear
disclosure of its remuneration policies, level and
mix of remuneration, and the procedure for setting
remuneration, in the company’s Annual Report. It
should provide disclosure in relation to its remuneration
policies to enable investors to understand the link
between remuneration paid to directors and key
management personnel, and performance.
CIT, constituted as a trust, is externally managed by
the Manager and accordingly, it has no personnel of its
own. Directors’ fees and remuneration of the CEO and
employees of the Manager are paid by the Manager
and not by CIT. The CEO and Non-Independent Non-
Executive Directors are not paid any directors’ fees.
Independent Directors are paid basic fees for their board
and board committee membership. Directors’ fees are
reviewed periodically to benchmark such fees against
the amounts paid by other managers of listed real estate
investment trusts. No director decides on his own fees.
The Manager uses a performance-based remuneration
system for key management personnel of the Manager.
The remuneration policy is designed to attract, motivate,
reward and retain quality staff. Staff remuneration
comprises a fixed component in the form of basic salary
and a variable component in the form of short term
and long term bonuses. Variable bonus is linked to the
performance of the individual and the Manager, which in
turn is linked to the performance of CIT; in the context of
the industry and the economy. This will help to align staff
interests with those of CIT’s Unitholders. Independent
remuneration studies are conducted periodically to align
the compensation of employees to market rates.
As a further means of staff alignment to the performance
of the Trust, employees are entitled to receive units in
CIT from the Manager as part of the Manager’s Employee
Share Incentive Programme.
ACCOUNTABILITY AND AUDIT
ACCOUNTABILITY
Principle 10: The Board should present a balanced
and understandable assessment of the company’s
performance, position and prospects.
Principle 11: The Board is responsible for the governance
of risk. The Board should ensure that Management
maintains a sound system of risk management and
internal controls to safeguard unitholders’ interests and
the company’s assets, and should determine the nature
and extent of the significant risks which the Board is
willing to take in achieving its strategic objectives.
The Board is responsible for providing a balanced and
understandable assessment of CIT’s performance, position
and prospects, which extend to interim and other price
sensitive public reports, and reports to regulators (if required).
Management provides the Board with relevant information
on the performance of CIT and the Manager on a timely
basis and as and when the Board may require from time to
time, in order for the Board to effectively discharge its duties.
CAMBRIDGE INDUSTRIAL TRUST | ANNUAL REPORT 2014
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