NKI : Corporate Governance Handbook

1

คูมือการกํากับดูแลกิจการ Corporate Governance

Handbook  

The Navakij Insurance Public Co., Ltd.

Message from the Chairman

The Board of Directors adamantly ensures that the Company operates under the principals

of good corporate governance, rules, regulations, and best practices enforced by the Stock

Exchange of Thailand and the Securities and Exchange Commission. Moreover the

Company's own corporate governance principles (CGP) ensure exemplary operations

beyond what is institutionally required. The Company's CGP came into action in 2000 and

is adhered to by all personals. To this end, the CGP strive to apply best practices that lead

to increased confidence of all stakeholders and related persons while taking into account

social and environmental responsibilities. The latest reviewed and adjustment of the

corporate governance policy by the Board of Director took place in November 2013. The

revised CGP in this handbook represents the most updated practices for the board,

management, and all of our staffs such that the performance of our duties is in line with

the expectations of shareholders, investors, and stakeholders of the Company.

The Board of Directors of the Navakij Insurance Public Company Limited will apply the existing policy and practices as well as continually develop the corporate governance of the Company in order to achieve our goals of stability and sustainable growth for the benefits of our organization and our shareholders.

(Mr. Suchin Wanglee)

Chairman of the Board

December 2013

Contents

Objectives 1

Corporate Governance Policy 1

Corporate Governance Principles

1 Rights of Shareholders 2-3

2 Equitable Treatment of Shareholders 3-5

3 Role of the Stakeholders 5-7

4 Disclosure and Transparency 7-10

5 Responsibilities of the Board

5.1 Structure of the Board of Directors

Independence and impartiality of the Board 10

Qualification of the Board 11-12

Qualification of the Independent Director 12-13

The term of office 14

5.2 Committees of the Board of Directors

The Audit Committee 15

The Executive Board 16

The Remuneration, Nomination & CG Committee 16-17

The Risk Management Committee 17

The Investment Committee 17

5.3 Roles and Responsibilities of the Board 18

5.4 Board Meeting 18-19

5.5 Assessment of performance of the Board of Directors 20

5.6 Remuneration of the Directors 20

5.7 Directors and Executives development 20-21

5.8 Conduction Program for new Directors 21

Ensuring compliance with and revision 21

Sources/ references 22

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Objectives

This is to strengthen the corporate governance of the Company to accomplish

efficiently with conditions that correctly, transparency and morality by focused on all

stakeholders. The Company had developed the good corporate governance principle

comparing with Principles of Corporate Governance of OECD (The Organization for

Economic Co-Operation and Development and had improved it properly and comply with

listed companies characteristics that consist of 5 categories are 1) Rights of Shareholders 2)

Equitable Treatment of Shareholders 3) Role of Stakeholders 4) Disclosure and

Transparency and 5) Responsibilities of the Board

The good governance being regarded as structure and basic internal process that

the Company has to perform in order to organize business directions and take care of the

Company’s performance to protect it from damage and also creating values to the

organization and strengthen the growth stability of the Company

Corporate Governance Policy

The Board of Directors a policy has a policy to develop and administrate the

Company along the principles of good corporate governance to comply with universal

standard guideline. The Company had performed the principles of good corporate

governance which applied from the principles of good corporate governance for listed

companies of the Stock Exchange of Thailand and the Office of Insurance Commission,

having determination to proceed with transparency and accountability to all stakeholders

The Board of Directors, executives and all staff, having persist in the principles of

good corporate governance along with the universal standards 6 categories consist of

1. Accountability - Responsibility for one’s own decisions and actions

2. Responsibility - Responsibility for performing duties with due

competence and adequate efficiency under the

rules

3. Equitability - the fair and equitable treatment of all stakeholders

4. Transparency - Ensuring corporate operations can be examined

and information disclosed to the relevant parties

5. Ethics - The existence of business ethics and code of

conduct

6. Corporate Social Responsibility - The social responsibility

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Corporate Governance Principles

1. Rights of Shareholders

The Board of Directors realized on their duties to cover benefits and fundamental

rights of shareholders provided by laws equitability as the Company’s owner e.g. the right

to receive share certificate, getting sufficient information, be in time with appropriate to

make decision, receive dividend, attending shareholders’ meeting and voting to make

decision for changing policy or major fundamentals of the Company e.g. an election or

removal f director including fixing remuneration of directors, distribution or transfer the

Company’s business, purchasing or taking over other company, appropriation of annual

profit, capital increase or decrease and approval of other special transaction. The Company having a good governance and responsibility to shareholders, having entrusted on the

Company’s performance would be the direction increase maximum benefits to shareholders,

code of best practice are as following:

1. The Company has conduct the annual general shareholders meeting within 4

months from the last day of the accounting year to ensure that shareholders receive the

Company performance to consider and decide on important matters of the Company. The

guidelines for the agenda to be in accordance with the principles of good corporate

governance as follows;

1. To certify the Minutes of the Board of Directors Meeting of the past

2. To acknowledge the Company’s performance for the past year

3. To consider and certify the financial statements position and the

statement of comprehensive income the past year ended

4. To consider the appropriation of profit for the past year

5. To consider the directors remuneration

6. To consider the election of directors in place of those retiring by rotation

7. To consider appointing the auditor and to determine his/her fee

8. Other business, opportunity for shareholders to ask on their intention

issues and/ or the board give answers and/ or declaration to shareholders

without voting

The Board of Directors will be no agenda other than to consider any

predefined or any significant change without prior notice to shareholders

2. The Company shall facilitate the participation of shareholders in the meeting.

The meeting venue shall be in Bangkok or nearby province that are conveniently accessible

and can accommodate all shareholders along with providing adequate personnel and

technology for monitoring the registration documents for the meeting

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3. Shareholders have the right to propose the agenda for the meeting or submit

questions in advance about the Company before the meeting. According to the Company,

the details appear in the Company's website (www.navakij.co.th) during September -

December of each year

4. The Board of Directors announce important information to shareholders prior

to start the meeting include the number of shareholders attend the meeting / proxy voting,

practice in voting, counting of votes and storing ballots

5. The Company always encouraged the Board of Directors, the executives and

the Company’s auditors attend the shareholders’ meeting and answering queries, invited

legal advisor to serve as the meeting inspector for document inspection for registration and

transparency in voting and counting of the meeting

6. The Company has allocated the appropriate time to allow shareholders to

express their opinions and ask for more information. As well as clarified by the Company

for each agenda before the vote

7. Directors election should utilize a process in which shareholders are able to

vote on individual nominees

8. The Board of Directors authorized Company Secretary to prepare the minutes

of the meeting to be completed and present to the shareholders through the website as soon

as possible within 14 days after the meeting

2. Equitable Treatment of Shareholders

The Board of Directors has a policy to protect the shareholders rights, equitable

treatment and fairness and also provided code of best practices by giving opportunities to

them supervise the Company and its performance

1. Shareholders have the rights propose in advance any qualified candidates to

be nominated as a director along with the criteria the Company was fixed, following details

on the Company’s website (www.navakij.co.th) between September - December annually

2. The Company has sent the notice and supporting documents to all

shareholders at least 21 days prior to the meeting and be posting it on the Company’s

website more than 30 days prior to the meeting both of Thai and English

3. Shareholders who cannot attend the meeting, can vote their rights by proxies

Form B that the Company had attached with the notice of shareholders meeting,

independent director and executive director at least 3 persons would be grantee

4. The Company has applied computer system and barcode for registration and

vote counting and supporting to use voting card in every agenda of to consider approval

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5. Policy regarding the supervision on the use of inside information

The Company has realize to the using of inside information for personal

interest, the Company has procedures to supervise the board, executives and staff taking the

Company information for personal interest or use the information without the permission of

the Company. The Company had announced a policy of keeping information safe, all

employees have to sign an agreement to abide such policy. Those who violate the

regulations will be considered a serious offense. It did not specify the disciplinary action in

the employee manual clearly. The maximum punishment is dismissal without compensation

The Company assigns respective officers to tend respective subjects and

supervises concerned persons to take good care of data. The assigned officers will disclose

information, if necessary

The Company has ask for cooperation from the board, executives and staff

who access inside information significantly which will be affecting to the Company’s

securities pricing, do not have any transaction during 1 month prior to the disclosure of

financial statements, always monitoring by assigning the duties of perform and submit the

first report (Form 59-1) of their holding in the Company and a report of changes in the

holdings (Form 59-2). A copy of the report must be sent to the Company on the same day

the report was submitted to Securities and Exchange Commission, office of president will

be getting such information to contain in the agenda of the Board of Directors Meeting to

acknowledgement every quarter

6. Reporting Conflict of Interest

The Company has a policy to the board and executive to disclose their

interests and related persons along with the form of the Company and have to review an

annually. The board and executive who have any interest on the transaction relevant the

Company, should not concern in the discussion, decision making and/or vote on such

transaction and would be following the process or measure of consider approval on related

transaction of the Company

The board has a policy regarding securities trading of the Company and

reporting method to implement by the board, executive and staff can access inside

information and the board and relevant executives have to prepare and submit report of

securities holding of the Company in accordance with the regulation of the Securities and

Exchange Commission

7. Policy on Conflicts of Interest

The Board of Directors has resolved the Company and associated

company to make related transactions that are normal business transaction or support

normal business under general business terms with directors, executives or related persons.

The board authorized the executives and/ or the person authorized by the executives the

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power to enter into such transactions. Therefore the board, executives and staff should be

avoided from conducting business rival incorporation any related business with the

Company and doing related transaction with connected persons or juristic person that would

be conflict of interest with the Company

The policy for considering the conflicts of interest and related transactions

1) Consider the conflict of interest and related transactions with great care,

taking into consideration the benefits of the Company and necessity of

such transactions of which terms and price are in accordance with normal

business practice as if made with outsiders

2) The Company follows stringent regulations of SET regarding report of

conflict of interest and related transaction. Such transaction is disclosed

and submitted to the consideration of the audit committee before propose

to the board. In respect of the board, the directors perform their duties with

great care, honesty and integrity. The directors and/ or those who have an

interest in the transaction do not participate in the discussion, decision

making and/ or vote on such transaction

3) The Company reports or disclosed information on related transactions to

shareholders or arranges a meeting of the shareholders to seek their

approval before taking any action

4) The Company discloses details of related transactions with regard to the

amount of transaction, contractual party, reasons and necessity, in the

annual report and the form of 56-1

3. Role of the Stakeholders

The Board of Directors are aware of the importance and rights of stakeholders, by

supporting cooperation between the Company and stakeholders, having strengthen the

Company’s performance and focusing on the same benefits based on fairness, including

taking care of stakeholders base on the rights of related laws. Therefore the Company has

conducted NKI code of conduct to implement by the board, executives and staff, being code

of best practice strictly and also punishment in case of violent or failure to comply with,

constitute a breach of discipline accordance with personnel management.

The Company’s policy to treat the various groups of stakeholders to encourage the participation as follows;

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1. Guidelines to the Stakeholders of the Various Groups

Shareholders: the Company’s policy is to make the Company secure, enable

shareholders to receive appropriate and steady dividend every year, running the

business with transparency and fairness. The Company has a policy to pay the

dividend not less than 40% of the net profit and supporting the right of

shareholders and equitable treatment of them

Employees: The Company has treat employees fairly through systematic

compensation revision and evaluation process and supporting career path and

providing good environment and safe

Client: The Company has a policy to treat every client equally and fairly, setting

up Customer Service Center (CSC) to provide quick assistance and build up the

best satisfaction to clients and having surveys the clients opinion to evaluate and

make improvement to services.

Creditor/Business Associates: The Company has follows the agreed terms with

integrity and fairness

Competitors: The Company has a policy to treat competitors under fairness

competition, do not try to access confidential information of them and practice to

them with integrity and appropriate

Society and Environment: The Company has a policy to conduct business with

an aim to benefit social and environment and comply with related laws and

supporting the government direction for many that aim to benefit society

2. The Company creates safety and health policies to increase the quality life of all

employees and maintain good mental and physical conditions

3. The Company has a policy to comply with the law of intellectual property or copyright

by specified guidelines to prevent non-infringement of intellectual property or copyright

including violation of intellectual property of another person

4. The Company policy is to anti-fraud and bribery, to create a corporate culture based on

five methods: Selflessness, Objectivity, Accountability, Transparency and Integrity

5. The Company has a policy to avoidance human rights violations, to support and to

respect matters to not let the organization and the employees be involved in the

violation of human rights. This is done by using the principles of freedom, equality and

peach

6. The Company has a policy regarding complaints

The Company communicates and provides a channel for stakeholders able complain

and notify the whereabouts or behavior that may indicate the misconduct of the officials

in the organization. Illegal actions, misrepresented financial report or other action that

may affect to the Company

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1) Provide a channel for complaint, stakeholders would be sent the notice to by

mail or electronic mail (email) via the Company’s website

- Concern staff: email to chairman of the executive board

- Concern executives: email to the audit committee via email secretary to the

audit committee

2) Provide inspection process by the audit committee that appointed by chairman

of the executive board or chairman of the audit committee, and the Company

will be informed the result accordingly

3) Provide measures to protect the complainant or a clue. The information will be

kept confidential only those who had received a letter or electronic mail only

In the case of complaint, employees who do not receive justice because of their

duties or un-satisfied for the benefits that should have been, the right to petition. The filing

of a superior class, except that the complaint about the conduct of their superiors. We look

forward to the next higher commander. The supervisor who receives a complaint

investigation has to find the facts and take corrective action, to consider the report and the

complainant informed, together with the report of the President through the HR department.

If the complainant is not satisfied the decision result, the appeal to the President through the

HR department again.

4. Disclosure and Transparency

The Company follows the policy and guidelines on disclosure of information

ensuring transparency to shareholders and investors, overseeing that financial statements

and other information are disclosed accurately, completely, clearly and timely and can be

check

1. Disclosure of Information

The Company had defined employees of shareholder relations division – office of

president to in charge of coordinate and disclose information of the Company,

facilitating for shareholder, investors both of minority and institutional to access

data easily, accurate and equal through various channels such as Form 56-1,

annual report, press conference and the Company’s website in both of Thai and

English and updated information. Contact information to investor relations

through emails at [email protected] and via telephone at number

0 2664 7777 ext. 7719, 1905 and 1906

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The Company significantly information disclosed to public are financial

statements, the Company’s general information, nature of business operation,

business property, risk management, capital structure, organization structure and

management, internal control, related transaction, corporate governance and code

of conduct policy, press release, securities price information etc.

Defined person who take a position of chairman or chairman of the executive

board or president, having authorized to disclose information, press conference or

declaration in case of news for rumor

Defined person and responsibility limitation to coordinate with the Stock

Exchange of Thailand (Contact Person) as following:

(1) Senior Vice President - Finance and Accounting or accounting manager,

responsible for coordinating to disclose periodic reports that are yearly and

quarterly financial statements, financial statements in accordance with the

form of the SET (FSCOMP) and Form 56-1

(2) Senior Vice President – Office of President or company secretary or deputy

manager shareholder relations division or staff of shareholder relations

division, responsible for coordinating to disclose and submit information

through website of the SET at www.setportal.set.or.th, that are acquisition/

disposition of assets, connected transaction, director or auditor changed, fix

the date and resolutions of annual general meeting of shareholders, minutes

of shareholders meeting, increase/ decrease capital, etc.

The Board of Directors report on corporate governance policy through a

registration statement for the year (Form 56-1) and annual report (Form 56-2)

2. Quality of Financial Statements

The Company’s financial statements were audited by independent auditors whose

have knowledge, skill and possess the qualifications as specified by the Securities

and Exchange Commission and the Company has a policy changing of auditor

every 5 years to support opinion expression by the auditor actually

The Board of Directors are responsible for the Company’s financial statements

which were prepare according to generally accepted accounting principles and

assigned to the audit committee to in charge of reviewing the accuracy of

financial statements, to take believable financial statements and also provided

report of the Board of Directors’ responsibilities for financial statements

presenting with report of independent auditor

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3. Internal Control Policy

The Board of Directors had assigned the audit committee to in charge of

reviewing the properly and efficiency of internal control system and internal

auditing, and to consider complying with related laws and the Company’s rules, to

consider disclosure of information accurately, clearly, transparency and be in line

with the regulation of being listed company including considering of properly and

reasonable of connected or conflict of interest transaction prior propose to the

Board of Directors to consider

The Company’s organization provided an Office of Internal Audit under

supervising of and directly report to the executive board and the audit committee,

to in charge of auditing in financial transactions and performing on each divisions

duties within the Company and perform the form of evaluation of sufficiency for

the Company’s internal control system, propose to the Board of Directors to

review once a year and also provided Office of President responsible for

monitoring all practice of the Company compliance with regulation of related

laws such as the Stock Exchange of Thailand, the Securities and Exchange

Commission and the Office of Insurance Commission

The Company had specified in writing and clearly regarding powers, duties and

authorized in financing of the Board of Directors, executive and all staffs for

easiness and efficiency of the operation and there is the use of computer system to

inspect and against unauthorized

The Company had appointed the auditors whose possess the qualifications as

specified by the Securities and Exchange Commission, to evaluate internal control

and investment procedures including relevant transaction. The Company has

prepared report for the Office of Insurance Commission on March every year,

such report was agreed by the executive board

4. Risk Management Policy

The Board of Directors provided a systematic risk management, organized

enterprise risk management committee consists of chairman who is chairman of

the executive board and executives are members to in charge of evaluate and

manage the risk process efficiently. The Company had specified each units of the

Company to review and evaluate their own risk once a year under supervision of

risk management division whose responsible for prepare and summarize report to

the executive board and risk management committee and Office of Internal Audit

is responsible for evaluate an insufficient of risk management and prepare report

to the audit committee and the Board of Directors to acknowledge respectively

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The Company has a policy to encourage all employees to practice compliance

with relevant regulations and laws and assigned to Office of President responsible

for monitor and communicate to all staffs, issued policy, procedures and

authorized in writing and would be improved consistent with operation method

The Company had issued Business Continuity Plan (BCP) and always provided

emergency plan testing. Therefore the Company had issued risk management

policy and three years business plan in accordance with the criteria, procedures

and condition of the Office of Insurance Commission

5. Responsibilities of the Board

The Board of Directors as representative of shareholders, having significantly role

to specify and business direction of the Company and supervise management of the

executives to achieve target and take the best benefit to the Company and shareholders and

consistent with the good governance. The Board of Directors has accountabilities to on their

duties as director to build up confidence to shareholders, investors and stakeholders and

enhance value added to the organization

1. Structure of the Board of Directors

1) According to the articles of association of the Company, the board of directors

must have at least 9 directors and not less than half of the total board members

must have residence in the Kingdom.

2) The Board of Directors consists of independent director 1/3 of the whole Board of

Directors and at least 3 directors

3) The Board of Directors independence from the management, chairman of the

board is not the same person of chairman of the executive board and president,

this is to separate duties and responsibilities and could be inspect the executives

management independently 4) Consist of directors with diverse qualifications in term of skills, experience and

professional expertise that benefit the Company

Duties of Chairman of the Board

(1) Be function of Chairman of the Board of Directors Meeting;

(2) In the case of equality of votes at the Board of Directors Meeting, shall have

another vote as a casting vote;

(3) Shall call the meeting of the Board of Directors and

(4) Be function of chairman of shareholders meeting

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Duties of Chairman of the Executive Board

(1) To monitor and provide advises to the president and executives in managing

the Company to achieve its vision and overall objectives set by the Board of

Directors, will all units in the organization cooperatively to achieve their

respectively responsible objectives

(2) To motivate and/or oversee participation from all members of the

organization towards common directions and objectives

(3) To establish sound working understandings of roles and duties of the

executives with the Board of Directors to work towards a common direction

(4) To provide recommendations to the management including review and

oversee management direction and business strategies as a whole including

normal business operation plans before presenting to the Board of Directors

(5) To oversee the adequacy of having strategies, annual budget and operation

plans in accordance with the board’s policy

(6) To oversee development of good culture and sound environment in work

place for the Company’s personnel with taking in consideration of their

pride and respect for human dignity including having code of moral and

equal treatment for them

(7) The consider and evaluate the president’s performance then report it directly

to the Board of Directors and/or assigned sub-committees

(8) Cooperating with the president to consider and evaluate performance of

executives to ensure fairness

Duties of President

(1) To perform policy, strategic direction, business plan and annual budget of

the Company propose to the Board of Directors for approval and to proceed

as the resolutions approved by the Board of Directors

(2) To report the Company’s operating performance by monthly and quarterly

compared to business plan and budget with suggestion to the Board of

Directors

(3) Other matters assigned by the Board of Directors

2. Qualification of the Company’s director

1) Must possess the qualifications as specified by law under Public Limited

Company Act, the Securities and Exchange Act, the Non-Life Insurance Act and

other relevant laws

2) Should be competent with skills and extensive experience to benefit the

Company’s operation

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3) Should commit to their responsibilities and put all efforts to create a strong board

of directors 4) Perform their duties and should have the ability to exercise sound and

independent judgment and no particular person has undue influence by the

executives and major shareholder, independently to raise issue, express opinion or

against in case of impact on the interest of shareholders and stakeholder

5) Could hold the position of director utmost 5 listed companies. If the director take

the position exceed the Company’s policy or being a director in other rival

incorporation or any related business with the Company, they have to report in

writing within one month after appointed to chairman of the Board and/or the

Board of Directors to acknowledge every time prior propose to the shareholders’

meeting to consider

3. Qualifications of Independent Directors

The Company has determined the definition of “Independent Directors” is equivalent to

the requirements of SEC and SET as followed;

1) Holding shares not more than 1% of the total voting share of the Company,

parent company, its subsidiary, associate or legal entity who has conflict of

interest. This includes shareholdings of individuals involved with said

independent directors. (Individuals under Section 258)

2) Being a director who does not take part within 2 years in the management, as an

employee, a staff member, an advisor who receives a monthly salary or a

controlling party of the Company, its parent company, its subsidiary, associates,

subsidiaries same rank or legal entity who has conflict of interest

3) Being a director who has no blood relation or by legal registration as parents,

spouse, siblings, children, including spouse of children, executives, major

shareholders, controlling party or individual nominated as executive or as the

controlling party of the Company or its subsidiary

4) Being a director who has no business relations with the Company, parent

company, its subsidiary, associate or legal entity that may have conflict of

interest in a way which may interfere with exercising independent judgment.

This includes not being or having been major shareholder, none-independent

director or director of individual who has business relations with the Company,

parent company, its subsidiary, associate or legal entity that may have conflict of

interest. This is with the exception of said individual no longer being in position

for at least 2 years

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5) Being a director who is not and never have been an auditor, a major shareholder, a

none-independent director, an executive of the Company, parent company, its

subsidiary, associate or legal entity that may have conflict of interest. This

includes partners of the manager of the audit office whose auditors work for the

Company, parent company, its subsidiary, associate or legal entity that may have

conflict of interest. This is with the exception of said individual no longer being

in position for at least 2 years

6) Being a director who is not or never have been in any professional service which

includes service of legal consultant, financial advisor who receives a fee of more

than 2 million baht annually from the Company, its parent company, its

subsidiary, associate or legal entity that may have conflict of interest. In the case

which said person in the professional service is a legal entity, this includes major

shareholders, non-independent directors, executives or partners of said person

unless he is no longer in position for at least 2 years

7) Being a director who was not appointed to represent the Company's directors,

major shareholders or shareholders related to the Company’s major shareholders

8) Being a director who does not operate business of the same conditions and which

is a significant competition with the business of the Company or its subsidiaries.

Also, being a director who is not a significant partner in limited partnership or

who partakes in management, as employee, staff member, advisor who receives

monthly salary or hold shares more than 1 % of the total voting share of other

company with business of the same condition and is a significant competition to

business of the Company or its subsidiaries

9) There is no other reason why said director cannot have independence in

executing the Company’s business

Business relationship of Independent Director

The Board of Directors approved the rule to waiver the prohibitive business relationship

of independent director. The value size is not more than 3 percent of the value of NTA of

the Company and the business relationship must be an normal business and must support the

Company’s operations in the general condition the Company should treat contract parties in

the same situation. Furthermore, the business relationship is not going to provide the benefit

and the effect with independent opinions that may lead to conflict of interest. The steps of

supervisions are as following:

- To review and report the business relationship of independent director whose

transaction size more than 3 percent of the value of NTA of the Company to the

Board of Directors to review the independence

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- To illustrate the business relationship of independent director during the Board of

Directors and Shareholders Meeting to nominate independent director

- To disclose the business relationship of independent director in Form 56-1 and

Annual Report or the criteria specified in the notification of the Securities and

Exchange Commission

4. Term of service of director and independent director

Under the Company’s Articles of Association, at every annual general shareholders

meeting, one-third of the total number of directors shall vacate their office. If the number of

directors cannot divide them into three equal parts, the number of directors nearest to one-

third shall vacate the office. The directors who vacate the office at the end of term may be re-elected. Apart from vacating office at the end of the term, the director shall vacate

office upon;

1. Death;

2. Resignation;

3. Being disqualified or under prohibition in accordance with the law;

4. Being removed from office by the resolution of the shareholders’ meeting;

5. Being removed from office by the order of the court

The Board of Directors had fixed term holding of three years for three terms to director

and independent director without a policy that limits the number of board positions that a

director can hold. This is due to necessity, the Board of Directors consist of directors with

diverse qualifications in terms of experience and expert in insurance business that benefit

the Company, the Board of Directors may propose to shareholders meeting to consider and

vote to re-elected them back to board successive.

The agenda of the Committee for a term of service as following:

Non-Executive Director: the term of office for three years and are in a position

not more than three terms or nine years, unless the Board of Directors shall have

agreed otherwise.

Executive Director: the term of office will be effective until ending of the

executive position such as resignation or disqualified on function of fiduciary

duty

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5. Nominating of Director

The remuneration and nomination committee would be perform their duties to nominate

person propose to the Board of Directors to consider approval prior propose to the

shareholders meeting appointing as the Company’s director, of which considering from

qualification as the Company’s criteria and there is a good experience. Therefore

shareholders shall nominate person propose to the Company to consider appointing as

the Company’s criteria as specified in the Company’s website

6. Committees

The Board of Directors had appointed committees to consider and supervise the

expertise task and defined committees report their performances to the Board of Directors

on a regular basis

Each committee is responsible for their duties that assigned by the Board of Directors,

having authorized to call the executives attend the meeting, declaration or report to give

suggestion

The Board of Directors had appointed five committees those are (1) the Audit

Committee (2) the Executive Board (3) the Remuneration, Nomination and Corporate

Governance Committee (4) the Risk Management Committee and (5) the Investment

Committee

(1) The Audit Committee

The audit committee consists of three independent directors who possess

qualifications required by SEC and SET. One member has expertise and vast

experience in accounting and finance. They are responsible for reviewing financial

statements accurately and adequately, review the appropriately and efficiency of

internal control and internal audit system, review compliance with related law,

consider appointing the auditor and determine his/her fee, consider connected

transaction or transaction may cause conflict of interest, to comply with the law,

regulation and benefit the Company, review and up to date risk management

system and support the Company to have good governance by considering and

issue a policy and guideline namely Corporate Governance Handbook and NKI

Code of Conduct and also monitor and to behave with a strict.

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(2) The Executive Board

The executive board consists of director and executives of the Company at least

three directors, to assist the board of directors for consider business strategies

policy and direction, organization, business plan and budget, to control and

supervise strategies, plans and projects of the Company’s business plan approved

by the Board of Directors. Therefore their responsibilities to control and supervise

(1) The operation of management should be carried our according to the

Company’s policies

(2) The Company must comply with relevant laws, regulation or notification

(3) The Company should follow generally accepted accounting standards and

prepare financial statements to show accurately the financial and operation

results of the Company and

(4) Evaluate and assess risks in operating business of the Company and specify

appropriate measures to manage such risk and inform the board thereof

(3) The Remuneration, Nomination and Corporate Governance Committee

It consists of at least three directors, member of at two of three of the committee

must be independent director and the chairman of the remuneration and nomination

committee must be independent director. Responsibilities of the remuneration and

nomination committee are as follows:

Duties regarding fix remuneration:

- Consider compensation payment policy and other benefits for the Board of

Directors, committees and executives

- Consider and review structures and procedures for compensation payment of

such persons, appropriate with duties and responsibilities and consistent with

the Company’s performance

- Consider and review and/or adjust authorities and duties of remuneration

propose to the Board of Directors comply with related laws and regulations

Duties regarding nomination:

- Consider policy for the selection of director and executive

- Propose nominees to serve as the Board of Directors and/or executives

- Oversee the structure and composition of the Board of Directors to appropriate

the organization

- Consider and review and/or adjust authorities and duties of the nomination

propose to the Board of Directors comply with related laws and regulations

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Duties regarding corporate governance:

- To consider and review whether the Company’s Corporate Governance policy

and its Code of Conduct are appropriate and adequate and to regularly update.

- To monitor directors and staffs compliance with the Corporate Governance

policy and the Code of Conduct and to do an operation report at least once a

year.

- To consider the appointing of working group to support relating jobs to the

Corporate Governance and the Code of Conduct suitability.

(4) The Risk Management Committee

The risk management committee consists of not less than five directors, having

duties to review and submit a risk management policy and risk appetite to the

Board of Directors, ensure that all division/ department within the Company

perform by the risk management, report the risk management and proceed to make

sure the Company has managed risks appropriately and with efficiency, manage

risks into the risk appetite, present information of risk and appropriation of internal

audit system to manage exposure from major risks and give advice to all division/

department of the risk management sector to encourage developing of appropriate

risk management

(5) The Investment Committee

The investment committee consists of not less than 3 directors. Its members consist

of three executives officers by the positions of the chairman of the executive board,

the president and the vice president of asset management department, responsible

for determine investment policy and make plans to match the Company policy and

match with changes in situation, review and monitor the performance of operations,

review and consider to adjust procedures of investment policy and consider to

specify guideline for investment risk management, investment in securities, money

lending and sale of intangible assets

Company Secretary

The Board of Directors had appointed a company secretary to responsible for

- Arrange the shareholders meeting and the board of directors meeting in

accordance with laws, the Company’s articles of association and other related

regulations

- Take minutes of shareholders and the board of directors meetings and keep it

for safe and can be inspect

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- Oversee the Company and the board of directors disclose information in

compliance with the regulations of SET as well as SEC regarding disclose of

information - Provide basic legal advice to the board of directors regarding laws, regulations

and articles of association of the Company and regularly monitor that they are

properly and regularly conducted within law

7. Duties and Responsibilities of the Board of Directors

The Board of Directors has power and duty to make decisions and manage the

Company within legal requirements, objectives and regulations as following:

1. To perform the duties according to laws, objectives and regulations of the

Company, including the shareholder’s resolutions with honesty, integrity and care

in protecting the Company’s interest

2. To make plans and stipulate policies for the Company’s operation and approve

long-term plans

3. To approve the management structure, the operating plan and the annual budget

4. To review the management’s operation to ensure that it is done in accordance

with the approved budget plan

Except from the above, the board must receive prior approval from the shareholders

meeting in the following matters:

1. Matters that the Company, by laws, must get approval of the shareholders

meeting

2. Related transactions according to the Stock Exchange of Thailand (SET)

announcement, which requires disclosure and report to SET and the shareholders

3. Transactions of significant assets that the Company must specifically report t SET

8. Meeting of the Board of Directors

1. The board of directors has conducts ordinary quarterly meetings as schedule for

the year in advance and maybe conducting a special meeting in case of

emergency. The meeting will be increase to six times a year from 2011 onwards 2. The Board of Directors meeting shall be not less than half of the total number of

directors constitute a quorum

3. Chairman of the Board and chairman of the Executive Board will consider and

approve the agenda of the meeting, that are clearly stated whether they are for

consideration or acknowledgement, all directors are free to bring up matters for

consideration

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4. Major agenda include the report of the Company’s performance and its financial

statements, the audit committee report, the internal control system, the

appropriation of profit, remuneration to the board and committees, nominating

candidates for directorship, auditor nomination and consideration of his fees 5. Company secretary is responsible for submit notice and some supporting

documents (Book 1) to the board of directors to study in advance 3-4 weeks prior

to the meeting and 5-7 days prior to the meeting for remaining supporting

documents (Book 2) 6. Chairman of the Board shall allocate appropriate time for free discussion and

forge consensus or decision making by the Board

7. Any director having potential conflict of interest in relation to a matter which in

consideration by the Board shall be required to leave the meeting while the matter

is under deliberation 8. When considering a particular matter, a director is entitled to have access to any

relevant information or document, may seek additional explanations from the

management 9. A resolution shall be based on a majority of votes. Any opposition to a resolution

shall be recorded in the minutes of the meetings

10. Company secretary takes record of the minutes of the meeting, propose to

chairman of the board to approve before propose to the board of directors’

meeting to certify. The records are in writing and kept for examined at all time 11. Non-Executive Director: Should has a meeting without the management at least

once a year, this is to discuss on problems relating to management, operation or

interesting matter and conclude to the chairman of the executive board and the

president for acknowledge 12. Committees: The committees meeting would be organized as it should be and is

adhered to guideline as the board of directors meeting

9. Report of the Board of Directors

The Board of Directors shall be responsible for the Company’s financial reports as well

as the consolidated financial reports of the Company and its subsidiary ended on the

accounting year in its Annual Report enforced by law. The financial report shall be prepared

on the basis of Thailand’s Generally-Accepted Accounting Principles (GAAP). In addition

the Board also reported their responsibilities for financial statements, presented with the

auditor’s annual report.

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The Board of Directors shall designate the audit committee to supervise the quality of

its financial report as well as to express its opinions on the financial report to the board of

directors, this is to report in accordance with the regulations of the Securities and Exchange

Commission, the Stock Exchange of Thailand, the Office of Insurance Commission and

relevant laws.

10. Assessment of Performance of the Board of Directors

The Board of Directors shall assess its operation annually. The assessment will include

an evaluation of each director and the whole board of directors. The board of directors will

consider and contain such matter into the Board agenda discuss and find a way to improve

efficiency of their performance.

The whole assessment consists of 6 categories: (1) Structure and characteristics of the

Board (2) Roles and responsibilities of the Board (3) Board meeting (4) The Board’s

performance of duties (5) Relationship with management and (6) Self-development of the

Board and executive development. On the self-evaluation of the individual board member,

regarding roles and responsibilities of directors totaling 15 items.

11. Assessment of Performance of the Chairman of the Executive Board and the President

The Remuneration, Nomination and Corporate Governance Committee shall

recommend to the Board the criteria for assessing the annual performance of the chairman

of the executive board and the president. The criteria are to reflect the Company’s goals, for

assessing the performance of the president must get approval from the chairman of the

executive board.

12. Remuneration of Directors

The Remuneration, Nomination and Corporate Governance Committee shall propose to

the Board the remuneration of directors, sub-committees and management. The Company’s

policy is to pay the remuneration to directors and proportion to appropriation of annual

profit to shareholders, at the level closely applicable in the industry and sufficiently to retain

directors of required qualifications and the directors in charge of sub-committee shall

receive additional meeting allowance.

13. Development of Director and Executive

The Board of Directors shall encourage its directors to attend training courses relevant

to their roles and taking any activities organized by various institutions in order to broaden

their knowledge and perspective that may become useful in their roles.

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The Company provided career path planning for the Company’s staff and being provide

training courses both in-house and public training courses with separately by specific and

general courses. Training courses organized by various institutions such as Thailand

Insurance Institution and insurance institutions abroad. In addition, executives made

business visits to insurance companies abroad.

14. Conduction Program for New Director

Chairman of the Board shall initiate an induction program to a new director, to build an

understanding of roles, responsibilities and the Company’s business guideline. Office of

President shall responsible for preparing the following materials for the attendees on the

next day from the appointing date,

- The Company’s Director’s Handbook - Corporate Governance and Code of Conduct Handbooks of the Company

- The Company’s Article of Association

- The Company’s Annual Report

15. Succession Planning

The Board of Directors shall designate the Remuneration, Nomination and Corporate

Governance Committee to select a suitable and qualified person for the Board approval to

take a position of chairman of the board, chairman of the executive board and president

For succession plan of the position under the president, the executive committee

designated to Organization Development Department to prepare a training plans for the

Company’s staff to develop their knowledge and skills and career path.

Ensuring compliance with and revision

The Board of Directors shall adhered to and strictly observed by all employees in the

Company as well as continually develop the corporate governance of the Company in order

to enhance and develop the quality of the Company’s corporate governance and to build up

stability and sustainable growth for the benefits to the Company, shareholders, and all

stakeholders. The Board shall always review annually the corporate governance principles.

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Sources/ References

1. The Principles of Good Corporate Governance for Listed Companies 2012: The

Stock Exchange of Thailand

2. The Securities and Exchange Commission Act (No.4) B.E. 2551

3. The Code of Best Practice for Directors of Listed Companies: The Stock Exchange

of Thailand

4. Director’s Handbook: the Securities and Exchange Commission

5. The criteria for Corporate Governance Report of Thai Listed Companies : The Thai

Institute of Directors Association

6. The Roles, Duties and Responsibilities of the Director of Listed Companies: DCP

Program: Thai Institute of Directors

7. OECD Principles of Corporate Governance: Organization for Economic Co-

operation and Development.

8. ASEAN CG Scorecard