Ascendas REIT - Annual Report 2021

Corporate Governance The Chairman also presides over the Annual General Meeting (AGM) each year and other general meetings where he plays a crucial role in fostering constructive dialogue between the Unitholders, the Board and Management. The CEO has full executive responsibilities to manage the Ascendas Reit Group’s business and to develop and implement policies approved by the Board. The separation of the roles and responsibilities of the Chairman and the CEO and the resulting clarity of roles provide a healthy professional relationship between the Board and Management, facilitate robust deliberations on the Ascendas Reit Group’s business activities and the exchange of ideas and views to help shape the strategic process, and ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making. As the roles of the Chairman and the CEO are held by separate individuals who are not related to each other, and the Chairman is an ID, the recommendation under the Code for a lead ID is not applicable. Nonetheless, the Board has approved the appointment of a lead ID, on the basis that such lead ID would provide leadership for the other IDs only in the limited situation(s) where the Chairman is conflicted. This was done with a view to further strengthen the independence of the Board. The lead ID would be available to Unitholders where they have concerns and for which contact through the normal channels of communication with the Chairman or Management are inappropriate or inadequate. The lead ID is Mr Chan Pengee, Adrian. Principle 4: Board Membership The Board has a formal and transparent process for the appointment and re-appointment of Directors, taking into account the need for progressive renewal of the Board. With effect from 20 October 2021, it has established the NRC, which makes recommendations to the Board on all appointments to the Board and Board Committees. All Board appointments are made based on merit and approved by the Board. Prior to 20 October 2021, the Board undertook the functions of a nominating committee and accordingly, the Manager did not have a separate nominating committee. The Board performed the functions that such a committee would otherwise perform. The Board was able to undertake the functions of a nominating committee because: (a) the Manager is a dedicated manager to Ascendas Reit and in general, REITs (including Ascendas Reit) have a more focused scope and scale of business compared to those of listed companies. For this reason, the Board’s capacity would not be unduly stretched if the responsibilities of a nominating committee were also undertaken by the Board as the Board would be able to give adequate attention to such issues; (b) the focused scope of the business of Ascendas Reit also means a manageable competency requirement for the Board such that the Board is able to manage the duties of a nominating committee; and (c) IDs form at least half of the Board and the Chairman is an ID, which demonstrates that the IDs play a substantive role, and assure the objectivity and independence of the decision-making process concerning nomination. This also mitigates any concerns of conflict which can be managed by having the conflicted Directors abstain from the decision-making process. Further, conflict situations are less likely to arise in matters of nomination. The SGX-ST has also issued a Practice Note which provides that the requirement for the establishment of nominating and remuneration committees under the Listing Manual does not apply to REITs if the REIT complies with regulations made under the SFA relating to board composition of a REIT manager. As the Manager complies with Regulation 13D of the SFR relating to the composition of the Board of the Manager, the Manager is of the opinion that the corporate governance requirements relating to the nominating and remuneration committees have been substantively addressed. Upon the establishment of the NRC on 20 October 2021, the NRC comprises three non-executive directors, two of whom (including the chairman of the NRC) are IDs. The NRC has met twice since its establishment in October 2021. Ascendas Reit 120