80 CapitaLand Ascendas REIT Corporate Governance The charts in pages 78 and 79 set out the key details relating to Board diversity, which is illustrative of how the Board has already achieved a level of diversity which fulfils the objectives as envisioned by the Board Diversity Policy – which is to leverage on the diversity in the Board in business and professional experience, age and gender to enhance the Board’s decision-making capacity and ensure that the Manager has the opportunity to benefit from all available talent and perspectives. The NRC has reviewed the size and composition of the Board and its committees and is of the opinion that the current size is appropriate with an appropriate balance and diversity of skills, knowledge, experience, gender, age and tenure, taking into account CLAR’s diversity targets, plans and timelines and objectives of the Board Diversity Policy and the CLAR Group's business needs and plans, for effective decision-making and constructive debate. Principle 3: Chairman and CEO The roles of the Chairman and the CEO are held by separate individuals to ensure a clear division of responsibilities between the leadership of the Board and Management, such that no individual has unfettered powers of decisionmaking. The Chairman does not share any family ties with the CEO. The Chairman leads the Board and plays a pivotal role in promoting open and constructive engagement and dialogue among the Directors as well as between the Board and Management at meetings. The Chairman also presides at general meetings of Unitholders where he fosters constructive dialogue between the Unitholders, the Board and Management. The Chairman provides oversight to the CEO, who has full executive responsibilities to manage the CLAR Group's business and to develop and implement Board-approved policies. The separation of the responsibilities of the Chairman and CEO and the resulting clarity of roles facilitate robust deliberations on the CLAR Group's business activities and ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent decision-making. 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. The NRC makes recommendations to the Board on all appointments to the Board and Board Committees. All Board appointments are made based on merit and subject to the Board’s approval. The NRC comprises three non-executive Directors, two of whom (including the chairman of the NRC) are IDs. The NRC met twice in FY 2025. Under its terms of reference, the NRC's scope of duties and responsibilities includes the following: (a) review and make recommendations to the Board on the Board size and composition, succession plans for Directors and composition of the Board Committees; (b) review and recommend an objective process and criteria for evaluation of performance of the Board, Board Committees and Directors; (c) consider annually and when required, if a Director is independent; and (d) consider and make recommendations to the Board on the appointment and re-appointment of Directors. Guided by its terms of reference, the NRC oversees the development and succession planning for the CEO. This includes overseeing the selection process of the CEO and conducting an annual review of career development and succession matters for the CEO9. Board Composition and Renewal The NRC considers different time horizons for purposes of succession planning. The NRC evaluates the Board's competencies on a long-term basis and identifies competencies which may be further strengthened in the long term to achieve CLAR's strategy and objectives. As part of medium-term planning, the NRC seeks to refresh the membership of the Board progressively and in an orderly manner, whilst ensuring continuity and sustainability of corporate performance. The NRC also considers contingency planning to prepare for sudden and unforeseen changes. In reviewing succession plans, the NRC has in mind CLAR's strategic priorities and the factors affecting the long-term success of CLAR. The NRC aims to maintain an optimal board composition by considering 9 While this is a partial deviation from Provision 4.1(a) of the Code which requires the NRC to make recommendations to the Board on relevant matters relating to the review of succession plans, in particular the appointment and/or replacement of KMP, the Board is of the view that such matters could be considered either by the NRC or by the Board as a whole given that the NRC and/or the Board as a whole is kept abreast of relevant matters relating to the review of succession plans relating to KMP, in particular the appointment and/or replacement of KMP. This is accordingly consistent with the intent of Principle 4 of the Code.
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