Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
Mandarin Oriental International Limited - Mandarin Oriental Hotel ...
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74<br />
CORPORATE GOVERNANCE<br />
The Group’s corporate governance relies on a combination of shareholder, board and management supervision<br />
and strict compliance, internal audit and risk control procedures, within the context of the various international<br />
regulatory regimes to which the Group is subject.<br />
<strong>Mandarin</strong> <strong>Oriental</strong> <strong>International</strong> <strong>Limited</strong> is incorporated in Bermuda.The Company was established as an<br />
Asian-based hotel group and has since extended its operations to key locations around the world.The Company<br />
has its primary share listing on the London Stock Exchange and secondary listings in Bermuda and Singapore.<br />
The primary corporate governance regime applicable to the Company arises under the laws of Bermuda, including<br />
under certain specific statutory provisions that apply to the Company alone.The Company has fully complied with<br />
that governance regime.The Company is not subject to the Combined Code (the ‘Code’) that applies to United<br />
Kingdom incorporated companies listed in London, but this report outlines the significant ways in which its<br />
corporate governance practices differ from those set out in the Code.<br />
The Management of the Group<br />
The Company has its dedicated executive management under the Group Chief Executive.The Memorandum of<br />
Association of the Company, however, provides for the chairman of Jardine Matheson Holdings <strong>Limited</strong> to be,<br />
or to appoint, the Managing Director of the Company. The managing director of Jardine Matheson has been so<br />
appointed. Reflecting this, and the 75% interest of the Jardine Matheson group in the Company’s share capital,<br />
the Group Chief Executive and the Managing Director meet regularly. Similarly, the board of the Hong Kong-based<br />
Group management company, <strong>Mandarin</strong> <strong>Oriental</strong> <strong>Hotel</strong> Group <strong>International</strong> <strong>Limited</strong> (‘MOHG’), and its finance<br />
committee are chaired by the Managing Director and include Group executives and the chief financial officer and<br />
group general counsel of Jardine Matheson.<br />
The Board<br />
The Company currently has a Board of 15 directors: the Group Chief Executive and Finance Director; five<br />
executives of Jardine Matheson; and eight non-executive Directors.Their names and brief biographies appear on<br />
pages 26 and 27 of this report. The Chairman has been appointed in accordance with the provisions of the Bye-laws<br />
of the Company, which provide that the chairman of Jardine Matheson, or any Director nominated by him, shall be<br />
the Chairman of the Company. The composition and operation of the Board reflects the approach to management<br />
described in this report.The Board regards relevant business experience and relationships as more valuable attributes<br />
of its non-executive Directors than formal independence criteria.The Company does not have nomination or<br />
remuneration committees or a formal Board evaluation process. Decisions on nomination and remuneration result<br />
from consultations between the Chairman and the Managing Director and other Directors as they consider<br />
appropriate.The three executives of Jardine Matheson on the board of MOHG, being AJLNightingale, Jonathan<br />
Gould and James Riley, also form the MOHG audit committee that has responsibility for the Group. The Board has<br />
not designated a ‘senior independent director’ as set out in the Code.<br />
Among the matters which the Board of the Company decides are the Group’s business strategy, its annual budget,<br />
dividends and major corporate activities. Responsibility for implementing the Group’s strategy is delegated to<br />
the Company’s executive management, with decision-making authority within designated financial parameters<br />
delegated to the MOHG finance committee. In addition, certain Directors of the Company based outside Asia make<br />
regular visits to Asia and Bermuda, where they participate in five annual strategic reviews, four of which normally<br />
precede the full Board meetings.These Directors’ knowledge of the region and the Group’s affairs reinforces the<br />
process by which business is reviewed by the Board.<br />
The Board is scheduled to hold four meetings in 2006, and ad hoc procedures are adopted to deal with urgent<br />
matters.Two meetings each year are held in Bermuda and two in Asia.The Board receives high quality, up to date<br />
MANDARIN ORIENTAL INTERNATIONAL LIMITED