Fiduciary duty

Fiduciary duty generally means a professional practice to act in a position of trust, good faith, candor and responsibilities on behalf of other involved persons, a company, organization, and charity. A fiduciary duty is expected to be extremely loyal to the person to whom they owe the duty (the “principal”): they must not put their personal interests before the duty, and must not profit from their position as a person in charge of responsibility.

The Securities and Exchange Committee (SEC) has applied fiduciary duty to the SEC Act (No. 4) B.E. 2551 [2008] by specifying that directors and executives shall perform their duties with responsibility, due care and loyalty; and shall comply with all laws, the objectives of the Company’s articles of association, the Board of Directors’ resolutions, and the shareholders’ meeting resolutions.

Banpu not only complies with regulatory changes, but also provides public access to updated information about its regulatory changes and performance of the Company’s Board members and management’s performance according to the “fiduciary duty” guidelines. Good corporate governance principles have been embedded in the Banpu culture, as is reflected through various internal management checks and balances i.e. ‘Banpu Spirit’ principles, corporate governance policy and code of conduct, corporate governance awareness and implementation, regulatory compliance, fraud management, and the monitoring of compliance to the Board’s resolutions. These mechanisms help promote awareness and shared belief among Banpu’s stakeholders in performing roles with due care, loyalty, and responsibility.

Roles and Responsibilities of the Board of Directors

The Board of Directors has established the Practices for the Board of Directors of Banpu Public Company Limited B.E. 2552 as a guideline for the Board’s operations. This document includes relevant definitions, the composition and criteria of the Board, the qualifications of directors, terms of office and termination, the authorities, duties, and responsibilities of the Board, Board meetings, and voting procedures. The company has continuously revised these practices to enhance the corporate governance standards of the Board and to align with the changing responsibilities and business conditions. The key roles and responsibilities of the Board are as follows:

• The Board is responsible to shareholders for the company’s business operations and governance, ensuring that they align with the goals and strategies that maximize shareholder value, within the framework of good ethics and considering the interests of all stakeholders.
• The Board must comply with laws, objectives, the company’s regulations, and resolutions of shareholders’ meetings, performing their duties with honesty, integrity, and caution to protect the interests of shareholders both in the short and long term.
• The Board oversees the development of the company’s vision, mission, goals, policies, strategic direction, long-term plans, annual plans, and budgets, delegating the management to propose these plans. The Board discusses and collaborates with the management to reach a consensus before approval, and monitors the management’s performance regularly to ensure the achievement of set goals.
• The Board sets the performance targets for the CEO and conducts annual performance evaluations to determine the CEO’s compensation.
• The Board is committed to overseeing management to ensure it meets the set goals, adhering to corporate governance principles and policies.

Approval Authority of the Board

The Board of Directors has designated the following matters as within its authority and responsibility to approve.

1. The company’s policies, business strategy, business plan, and annual budget.
2. Monthly and quarterly performance reports in comparison to the company’s plan, budget, and business outlook in the following period of the year.
3. Investment in a project worth more than THB 1,500 million.
4. Using capital investment in a project which exceeds 15 percent of the approved budget or has a value more than THB 1,000 million.
5. Purchase and disposal of assets, acquisitions, and participation in joint venture projects, which are not conflicting with the SEC’s and SET’s rules, for an amount that exceeds the CEO’s authority.
6. Transactions which could materially affect the company’s financial status, liabilities, business strategy, and/or reputation.
7. Entering into a contract either unrelated to the normal course of business or related and materially significant.
8. Parts of a connected transaction between Banpu, its subsidiaries or affiliates, and related individuals according to the Securities and Exchange Act B.E. 2535 amended by the Securities and Exchange Act (No. 4), B.E. 2551.
9. Any transaction which may cause the Debt-to-Equity Ratio of the company’s consolidated balance sheets to exceed 2:1.
10. Payment of an interim dividend.
11. Net borrowing that exceeds a maximum amount stated in a budget or that exceeds an annual estimate of more than THB 5 billion.
12. Changes in policy and practices with material implications to accounting, risk management, and financial reserves.
13. Significant changes in financial and management control.
14. Determination and review of authorization granted to the CEO and Executive Officers (EO).
15. Recruitment and the appointment of a CEO, along with the approval to recruit and employ EOs, a COO, and a CFO.
16. Approval of budget, salary, bonus or bonus formula, and formula to adjust annual remuneration packages of senior executives and employees.
17. Nomination, appointment, and termination of directors and the Company Secretary or Secretary of the Board of Directors.
18. Authorization given to the Chairman of the Board of Directors, CEO, or any director, and amendments to such authorization.
19. Appointment and determination of duties of sub-committees as well as appointment of an independent director as “Lead Independent Director,” in the event that the Chairman of the Board is not an independent director.
20. Establishing and supervising the management on the basis of the Corporate Governance policy and practices, encouraging consciousness of ethics & morality, and performing duties in compliance with Corporate Governance Policy, Code of Conduct, and Anti-Corruption Policy.
21. Appointment of directors or executives as directors of subsidiary and affiliated companies.
22. Registration of a new company and dissolving the company.
23. Revision of the company’s Vision and Mission at least once every 5 years.

24. Directors have a duty to keep corporate information strictly confidential, especially internal information not to be disclosed to the public or information that may affect its business or share price pursuant to the Securities and Exchange Act B.E. 2535 (As amended). The following are practices in regard to the use of Company information by performing the following:

• In case the information is a report based on an accounting period such as an operating result, financial statements, and an annual report, directors must refrain from trading Banpu’s shares not less than 30 days prior to the information disclosure to the public.
• In case the information is a report of Banpu’s action in a particular situation, such as acquisition/disposal of assets, connected transactions, joint venture/cancellation of joint venture, capital increase/capital reduction, issuance of new securities, repurchase of own shares, payment or non-payment of dividend or incidents that affect Banpu’s share prices, in such cases, directors shall refrain from trading the Company’s shares from the period he/she learns of the information to the day Banpu discloses the information to the public.

25. Amendment of the Board of Directors’ scope of approving power as described in Clause 1 – 24.

Roles and Responsibilities of the Management

To clearly separate the scope of oversight and management, the company has assigned the management, led by the CEO, the following key roles and responsibilities:

• The management collaborates with the Board in developing the business direction and long-term strategic plans to align with the company’s vision and mission. The CEO, appointed and delegated by the Board, is responsible for business operations, development, and strategy implementation.
• The management uses the Board’s recommendations as a guideline for further development, setting business direction, long-term strategic plans, annual plans, budgets, and staffing levels, which are then proposed to the Board.
• The CEO delegates authority to executives and senior management of various business units both domestically and internationally, according to the Delegation of Authority.
• The CEO evaluates executives and senior management in a hierarchical manner using goals and criteria aligned with the Company’s strategic plan and annual work plan, as well as the CEO’s own performance targets, in order to determine appropriate compensation packages and incentives.