Annual Report
2017/2018

CORPORATE

GOVERNANCE

BOARD
GOVERNANCE

RESPONSIBILITIES OF THE BOARD

The Board oversees and monitors STB’s organisational performance and achievement of strategic goals and objectives. It assumes the responsibility of reviewing and approving corporate strategies, budgets and financial plans.

BOARD COMPOSITION AND APPOINTMENT

From 1 April 2017 to 31 December 2017, there were twelve Directors on the Board. Following the retirement of Mr Aaron Boey and Mr Ng Lang on 31 December 2017 and the appointment of Mr Lim Eng Hwee on 1 January 2018, there were eleven Directors on the Board from 1 January 2018 to 31 March 2018. Mr Alvin Lim and Mr Lim Ming Yan were re-appointed to the Board with effect from 1 January 2018.  

The size and composition of the Board are guided by the clauses stated in the STB Act, with the eventual composition subject to approval by the Cabinet. The desired outcome is the provision of a conducive environment for effective discussions and decision-making. The process for the appointment of Directors to the Board is kept formal and transparent as this is critical to the role that corporate governance plays. A review of the Directors’ membership on the Board is done when his or her official term of appointment ends.

The Board is given the mandate to act independently and to exercise objective judgment on the STB’s corporate affairs. This is to ensure that checks and balances are instituted. Apart from Mr Lionel Yeo and Mr Quek Swee Kuan, the other Directors on the Board are Independent Directors. A Director’s independence is re-assessed at the point of each re-appointment.

CONDUCT OF BOARD AFFAIRS

The Board approves financial transactions above a certain financial limit. A regular review of the financial authorisation and approval limits is performed. During each financial year, the Directors are requested to complete an annual Board Evaluation Questionnaire that allows the STB to assess the overall administration of Board matters and engagements with the Board.

Under the year in review, there were a total of five scheduled Board meetings and a one-day Board Workshop to discuss key strategic issues. A record of the Directors’ attendance at Board meetings during the financial year, which ended on 31 March 2018, is set out in Table 1.

TABLE 1:
DIRECTORS' ATTENDANCE AT BOARD MEETINGS IN FY 1 APRIL 2017 TO 31 MARCH 2018

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1 Mr Aaron Boey and Mr Ng Lang retired from the Board on 31 December 2017 and were scheduled for four Board Meetings.

2 Mr Lim Eng Hwee was appointed to the Board with effect from 1 January 2018 and was scheduled for one Board Meeting.

CORPORATE GOVERNANCE

Directors are given access to the STB’s records and information, senior management, or any other staff of the organisation as deemed necessary for them to effectively discharge their responsibilities and to deliberate meaningfully on issues discussed at Board meetings.

The following Board Committees assist the Board in executing its duties:
  • Audit and Risk Committee (ARC)
  • Finance and Investment Committee (FIC)
  • Governance Committee
  • Human Resource Management Committee (HRMC)
A record of each Director’s Board Committee memberships and attendance at Board Committee meetings during the financial year, which ended on 31 March 2018, is set out in Table 2.

TABLE 2:
DIRECTORS' BOARD COMMITTEE MEMBERSHIPS AND ATTENDANCE AT BOARD COMMITTEE MEETINGS IN FY 1 APRIL 2017 TO 31 MARCH 2018

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1 Mr Aaron Boey retired from FIC on 31 December 2017 and was scheduled for one meeting.

2 Mr Allen Law was a member of ARC until 31 December 2017. He was subsequently appointed to be a member of the FIC with effect from 1 January 2018 and was scheduled for one meeting.

3 Mr Lim Eng Hwee was appointed to the ARC with effect from 1 January 2018 and had not been scheduled for a meeting.

ACCOUNTABILITY, INTERNAL CONTROLS AND RISK MANAGEMENT

AUDIT AND RISK COMMITTEE

The Audit and Risk Committee (ARC) comprised four independent and non-executive Directors until 1 January 2018, at which time there was a change in composition to three Directors. At least two members of the ARC have the requisite accounting or related financial management expertise to discharge their responsibilities and duties.

The responsibilities of the ARC are stated in the terms of reference, which include ensuring the adequacy of internal controls and reviewing audit plans, audit reports and audited STB Annual Financial Statements. Besides overseeing accountability and audit, the ARC also assists the Board by providing oversight of the STB’s Enterprise Risk Management Framework through regular risk management reports from Management.

The ARC has explicit authority to investigate any matter within its terms of reference; it also has full access to, and co-operation of, Management. It has direct access to the Internal Audit and external auditors with full discretion to invite any Board Member or Management staff to attend its meetings. In addition, the ARC also met with the external auditors and staff of Internal Audit without the presence of Management, during the financial year. In order to properly discharge its function and duties, reasonable resources are made available to the ARC.

INTERNAL CONTROLS

The Board ensures that Management maintains a sound system of internal controls to safeguard the interests of stakeholders and the assets of the STB. The ARC ensures that a review of the effectiveness of the STB’s internal controls – including financial, operational and compliance controls, and risk management – takes place annually through the various audits performed internally and through related reports issued to the ARC. For certain projects or areas where independent expertise is specially required in connection with the review of controls, external professionals and service providers are appointed accordingly.

EXTERNAL AUDIT

As part of the annual financial statements audit, the external auditors conduct a review of the significant internal controls. Such controls are mainly determined by the purpose of the audit and the scope of works under the audit plan. Any material non-compliance and/or internal control weaknesses, together with the external auditors’ recommendations, are addressed and made known to the ARC.

To maintain the independence of the external auditors, the ARC has reviewed the nature and extent of non-audit services provided by the external auditors during the year and the fees paid for such services. The ARC is satisfied that the independence of the external auditors has not been impaired by the provision of those services. The external auditors have also provided confirmation of its independence to the ARC.

INTERNAL AUDIT

The Internal Audit reports functionally to the Chairman of the ARC and administratively to the Chief Executive. As part of its auditing, the Internal Audit is guided by the current International Professional Practices Framework issued by the Institute of Internal Auditors. The adequacy of funding and staffing of the Internal Audit and its appropriate standing within the STB is ensured by the ARC.

The Internal Audit adopts risk-based auditing as its key audit assurance practice. It provides regional offices, major process owners and policymakers of the STB, with reasonable assurance on the effectiveness of control and governance processes in the management of risks and accomplishment of objectives.

WHISTLEBLOWING POLICY

The STB has in-place a whistleblowing policy to allow employees, vendors, partners of the STB and the general public to report malpractices and misconduct in the workplace. The policy aims to encourage the reporting of such matters in good faith, with the confidence that persons making such reports will be treated fairly and, to the fullest extent possible, protected from reprisals. All whistleblower reports, including the identity of the whistleblower will be treated with confidentiality. Reports can be lodged directly to STB Internal Audit via email at ethics@stb.gov.sg.

FINANCE AND INVESTMENT COMMITTEE

The Finance and Investment Committee (FIC) comprises four Directors. Its responsibilities are broadly categorised into Finance and Fund Management. It endorses STB Workplans and Budget before submission to the STB Board for approval. The Committee also approves tenders, expenditures and proposed changes to the STB’s Financial Regulations (except for the government procurement procedures and virements). It approves the STB’s investment policy, objectives, guidelines, strategies and appointment of external fund manager(s) in respect of surplus funds available for financial investments and reviews these matters at least once a year. The Committee also ensures that financial investments are conducted in compliance with statutory legislation and government directives.

GOVERNANCE COMMITTEE

The Governance Committee comprises three Directors, including the Chairman of the Board. The Committee’s main focus is to ensure the effectiveness of the Board and Board Committees. To ensure that the Board has the appropriate balance of skills and experience to deal with the strategic issues and challenges facing the STB, the Governance Committee reviews the size and composition of the Board, and recommends new appointments and renewals of Directors. It also assumes the responsibility for conducting an annual evaluation of effectiveness of the Board.

HUMAN RESOURCE MANAGEMENT COMMITTEE

The Human Resource Management Committee (HRMC) comprises four Directors, including the Chairman of the Board. Its responsibilities include providing guidance on leadership development and talent management matters; reviewing compensation policies and structures to ensure competitiveness; endorsing the promotion of officers to or within Salary Grade 15 and above (i.e. the equivalent of Superscale Grades in the Civil Service); the assessment of the STB’s performance report to the Board of Directors; and reviewing and approving recommendations on disciplinary matters pertaining to members of senior Management.
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