AOT Corporate Governance

AOT is engrossed to operate by following good governance principles in accordance with international corporate governance standards, thereby promoting confidence to shareholders, investors, and all stakeholders to ensure the long-run business stability based on good corporate governance practices.

Corporate Governance Principles

According to Corporate Governance, AOT follows AOT Corporate Governance Principles and Good Corporate Governance Handbook B.E.2559 (2016) which have been aligned with OECD Principles of Corporate Governance, and the Corporate Governance Codes for listed companies issued by the Securities and Exchange Commission (SEC) which is acknowledged by the Stock Exchange of Thailand (SET) and the Thai Institute of Directors (IOD).

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Corporate Governance Principles

The objective of the AOT Corporate Governance System is to maximize the benefits of shareholders, the process covers the selection of independent directors with a diverse range of professional qualifications required for airport management services. AOT also implements chains of control, audit, supervision, and continuous performance evaluation on the Board of Directors to ensure that operations are in line with good corporate governance practices.

Structure of AOT Board of Directors

The Board of Directors is the key element to pivot the direction of the organization. Appropriate structure and qualification of directors would supplement the effective leadership of the management where business decision making could be made thorough and rounded considerations, which is the heart of sustainability development. Putting the importance of prudent and efficient deliberation on operational matters, AOT has appointed five subcommittees, namely the Audit Committee, the Nomination Committee, the Remuneration Committee, the Corporate Governance Committee and the Risk Management Committee. The Corporate Governance Committee and the Risk Management Committee are responsible for screening and monitoring important tasks according to economical, social, and environmental aspect of the operations.

AOT shareholders

The selection process of qualified AOT board of directors comprised of the evaluation of various and necessary professional skills which are important in maximizing the airport business operational efficiency such as strategic management and business development, accounting and finance, legal, safety and security science and technology, or political sciences, among many others, regardless of gender, race, religious belief and be in compliance with relevant regulations such as the Standard Qualifications of Directors and State Enterprise Employees Act B.E. 2518 (1975), the Public Limited Companies Act, B.E. 2535 (1992), and the Securities and Exchange Act, B.E. 2535 (1992). AOT complies in a strict manner with directive guidance on the appointment of State Enterprise directors following the Cabinet Resolution on 18th July 2017 and 6th August 2019 (Subject: Directive Guidance on the Appointment of State Enterprise Directors) and detailed procedures on the implementation of directive guidance on the appointment of State Enterprise directors following the State Enterprise Policy Committee on the Meeting 4/2560 held on 11th October 2017 and also complies with AOT regulations, Corporate Governance Principles and Good Corporate Governance Handbook.

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Structure of AOT Board of Directors

The Board of Directors is the key element to pivot the direction of the organization. Appropriate structure and qualification of directors would supplement the effective leadership of the management where business decision making could be made thorough and rounded considerations, which is the heart of sustainability development. Putting the importance of prudent and efficient deliberation on operational matters, AOT has appointed five subcommittees, namely the Audit Committee, the Nomination Committee, the Remuneration Committee, the Corporate Governance Committee and the Risk Management Committee. The Corporate Governance Committee and the Risk Management Committee are responsible for screening and monitoring important tasks according to economical, social, and environmental aspect of the operations.

AOT Board of Directors

The Board of Directors is the key element to pivot the direction of the organization. Appropriate structure and qualification of directors would supplement the effective leadership of the management where business decision making could be made thorough and rounded considerations, which is the heart of sustainability development. Putting the importance of prudent and efficient deliberation on operational matters, AOT has appointed five subcommittees, namely the Audit Committee, the Nomination Committee, the Remuneration Committee, the Corporate Governance Committee and the Risk Management Committee. The Corporate Governance Committee and the Risk Management Committee are responsible for screening and monitoring important tasks according to economical, social, and environmental aspect of the operations.

The AOT Articles of Association prescribes the composition of the Board of Directors as follows;

• Number of directors is not less than five but is not exceed fifteen and they shall be elected in the shareholders’ meeting.
• Independent directors should not be more than one - third of all members, and must not be less than three individuals.
• Not less than half of the directors must reside in the Kingdom of Thailand.
• At least one director must be proficient in accounting and finance.

Directors are elected by the majority votes at the shareholders’ meeting. Each shareholder has the right to vote equal to the number of shares the individual is holding. The candidates who receive higher votes are elected respectively to attain the required number of directors at a given meeting. In every annual general meeting, one-third (1/3) of directors, or, if the number cannot be divided by three, then the nearest number to one-third (1/3) shall vacate office. As for the directors vacate office on the first and second years after the Company registration shall be drawn by lots. As for the third year and subsequent years, the longest directors shall vacate office. vacating directors may be eligible for re-election.

More detail can be found in the Qualification of Directors and the Appointment and Termination of the Board of Directors in the Annual Report

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Meeting of the Board of Directors

AOT arranges the Board of Directors’ meeting on a regularly basis which is not less than twelve times per annum. The meeting must be held at least once every three (3) months whereas meeting dates shall be set in advance to allow regular attendance of the directors, and to eligible relevant business units to schedule working plan along with prepare information and meeting agenda for thorough consideration by the Board of Directors. The President of the Board of Directors shall announce the next meeting date before ending a meeting. AOT will also terminate the directorship in case of three consecutive absences without reasonable causes.

More information can be found in the Meeting of the Board of Directors section in the Annual Report.

Independence of the Board of Directors

Requirements for AOT independent directors are stricter than the minimum requirement set by the Securities and Exchange Commission, Thailand and the Stock Exchange of Thailand, whereas AOT independent directors must possess the following qualifications 1

1) An Independent director holds no more than 0.5 percent of the total number of voting shares of AOT, subsidiaries, affiliates, major shareholders or entities with controlling authority of AOT, including in shares held by those related persons.

2) An Independent director is not involved in the management and is not an officer, an employee, a consultant with monthly salary or an entity with controlling authority of AOT, subsidiaries, affiliates, major shareholders or entities with controlling authority of AOT unless there has been no benefits or interests arising from such relationships for at least 2 years. Such prohibited characteristic excludes the case where the Independent Director was a government official or consultant of government agencies that were major shareholders or entities with controlling authority of AOT.

3) An Independent Director has no business relationship such as being a customer, partner, creditor / trade debtor, creditor / loan debtor, etc., whether directly or indirectly in terms of finance and management of AOT, subsidiaries, affiliates, major shareholders or entities with controlling authority of AOT in such a manner that may obstruct the exercise of independent discretion. Also, an Independent Director is not or was not a significant shareholder or an entity with controlling authority over a party with the business relationship with AOT, subsidiaries, affiliates, major shareholders or entities with controlling authority AOT.

4) Independent Director is not a close relative or has other relationships that may remove the independence exercised over other directors, executives, major shareholders of AOT, subsidiaries, affiliates, entities with controlling authority or persons who are nominated to be directors, executives or entities with controlling authority of AOT or subsidiaries. An Independent Director is not appointed as a representative to safeguard the interest of the directors, major shareholders or shareholders related to major shareholders.

5) An Independent Director who possesses qualifications according to Item Nos. 1 - 4 may be assigned from the AOT Board of Directors to make management decisions of AOT, the parent company, subsidiaries, affiliates, subsidiaries of the same level, major shareholders or entities with controlling authority of AOT. Such decisions can be made on a collective decision basis.

6) An Independent Director is not an auditor, a professional service provider whether being legal or financial consultant of AOT, subsidiaries, affiliates, major shareholders or entities with controlling authority of AOT, and not a significant shareholder, an entity with controlling authority a partner of an audit office that employs auditors of AOT, subsidiaries affiliates, major shareholders or entities with controlling authority of AOT, or a partner of professional service providers, unless there have been no benefits or interests arising from such relationships for at least 2 years.

7) An Independent Director does not engage in a business of the same nature as and which is significantly competitive to that of AOT or subsidiaries, or a significant partner in a partnership, or a director who is involved in the management, an officer, an employee, a consultant with monthly salary, or holds more than 1 percent of the total number of voting shares of other companies which are engaged in businesses of the same nature as and which are significantly competitive to those of AOT or subsidiaries.

8) An Independent Director does not have any other characteristics which can compromise his / her freedom of expression of views about AOT's business operations. However, the AOT directors who have been nominated according to the criteria and procedures for nomination and possess complete qualifications pursuant to the above-mentioned definition of the independent director will be appointed as independent directors by the resolutions of the AOT Board of Director meeting and / or shareholders' meeting.

1 Full requirements for independent directors can be found in the Annual Report under the Qualification of Independent Directors chapter and the Nomination and Appointment of Directors and President for Airports of Thailand Plc section.

Professional Skill and Diversity of the Board of Directors

Directors must be proficient in various skills and have a diverse range of backgrounds relevant in order to enhance benefits and creating values for AOT. They must also be fully qualified and do not have any restrictions as stipulated in the Standard Qualifications of Directors and State Enterprise Employees Act B.E. 2518 (1975), the Public Limited Companies Act, B.E. 2535 (1992), the Securities and Exchange Act, B.E. 2535 (1992), AOT regulations, and AOT Corporate Governance Principles. AOT has no discriminatory policies against gender, race, or religious belief.

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Assessment of the Board of Directors and President

Performance Evaluation of the Board of Directors

AOT requires self-assessment from its directors on an annual basis as a framework in the performance assessment of the Board of Directors and considers achievements and obstacles for the subsequent improvement of the Board of Directors’
performance. The evaluation is consist of:

      1. Self-assessment form for State Enterprise directors (individual)
      2. Assessment form for the State Enterprise’s Board of Directors.
      3. Self-assessment form for the sub-committees.

AOT directors are also under the external assessment carried by the State Enterprise Policy Office (SEPO), Ministry of Finance which assesses the performance of State Enterprise in corporate governance and leadership aspect, and evaluation under the listed companies corporate governance survey project run by the Thai Institute of Directors (IOD) whereby the criteria is in
accordance with those of an international ASEAN CG Scorecard assessment.

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Clawback Provision

AOT, as a listed company in the Stock Exchange of Thailand, is obliged to comply with Section 89/7 of the Securities and Exchange Act, B.E. 2535 (1992) that requires directors and management to exercise their duties responsibly, prudently, and honestly and to comply with laws, objectives, regulations of the company, the Board of Directors’ resolutions, and the shareholders’ meeting resolutions. In cases where the director acts or omits to act in such a way that constitutes non-compliance with aforementioned duties which causes the director, the executive or the related person to obtain undue benefits, the company may bring an action against the director for disgorgement of such benefits to the company.

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Equality of the Remuneration

In 2020, the compensation ratio between the President and average annual employee remuneration (excluding
the President) is 16.14 times. This is calculated inclusively of annual basic salary and bonus payment.

Shareholding and Voting Rights

AOT applies the following conditions on shareholding and voting rights
     • Independent directors are allowed to hold not more than 0.5 percent of the voting shares in AOT, its subsidiaries, its joint venture with major shareholders or AOT authorized personnel. The holding is also inclusive of the director’s dependent individuals.
     • The President, as a director of the company, is not eligible to hold shares in accordance with the regulation in the Standard Qualifications of Directors and State Enterprise Employees Act B.E. 2518 (1975).
     • There is no holding restriction for current AOT management, however, directors and management of AOT are obliged to report transactions in AOT securities to comply with the regulations and are bounded to the blackout period.

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Remarks

      1. AOT common shares held through Thai NVDR Co., Ltd. are not qualified for voting rights in the shareholders’ meeting as they are categorized as non-voting depository receipt (NVDR) equity unless the vote on delisting the securities from the Stock Exchange of Thailand (SET).
      2. AOT has no outstanding golden shares which are held by government entities.