Manulife US REIT - Annual Report 2021

ANNUAL REPORT 2021 117 All Board members participate in matters relating to corporate governance, business operations and risks, financial performance, and the nomination and review of the Directors. The key roles of the Board are to: • guide the corporate strategy and directions of the Manager; • ensure that senior management discharges business leadership and demonstrates the highest quality of management skills with integrity and enterprise; and • oversee the proper conduct of the Manager. The Manager has adopted the MFC Code of Business Conduct and Ethics. It affirms MUST’s commitment to ethical conduct and its practice of complying with all applicable laws and avoiding potential or actual conflicts of interest. All Directors and employees of the Manager are subject to this code and must complete an annual training and certification of compliance with the code. The MFC Code of Business Conduct and Ethics is available at http://www.manulifeusreit . sg/about.html. Two Board Committees, namely the Audit & Risk Committee (ARC) and Nominating and Remuneration Committee (NRC) have been constituted with written terms of reference to assist the Board in discharging its responsibilities and may decide on matters within its terms of reference and applicable limits of authority. The terms of reference of the respective Board Committees set out their compositions, authorities and duties, including reporting back to the Board. All terms of reference are reviewed and updated as and when necessary to ensure their continued relevance. Notwithstanding the delegation of authority to the Board Committees, the ultimate responsibility for decision-making and oversight rests with the Board as a whole. The composition of the ARC and NRC, the terms of reference, and a summary of each committee’s activities, are disclosed in the subsequent sections of this corporate governance report. Each of these Board Committees operates under delegated authority from the Board, with the Board retaining overall oversight. The Board may form other Board Committees as dictated by business imperatives. Membership of the various Board Committees is managed to ensure an equitable distribution of responsibilities among Board members, to maximise the effectiveness of the Board and to foster active participation and contribution from Board members. Diversity of experience and appropriate skills are considered in the composition of the respective Board Committees. The Manager has also adopted a set of internal controls which establishes approval limits for capital expenditure, investments, divestments, bank borrowings and issuance of debt instruments. Apart from matters that specifically require the Board’s approval, the Board delegates authority for transactions below those limits to the Board Committees and management. Approval sub-limits are also provided at management level to optimise operational efficiency. The Board has reserved authority to approve certain matters which have been clearly communicated to management in writing and these include, among others: 1. acquisitions and divestments; 2. equity fund raising and new debt financing; 3. income distributions and other returns to Unitholders; and 4. matters which involve a conflict of interest for a controlling Unitholder or a Director. The Board meets regularly to deliberate the strategies of MUST, including approval of material transactions such as acquisitions and divestments (taking into consideration the recommendations of the ARC), funding and hedging activities, approval of the annual budget and review of its performance. The Board or the relevant Board Committee will also review MUST’s key financial risk areas and the outcome of such reviews will be disclosed in the Annual Report or where the findings are material, immediately announced via SGXNet. Board and Board Committee meetings are scheduled prior to the start of each financial year in consultation with the Directors. The Constitution of the Manager permits the Directors to participate via audio or video conference. All Directors are invited to attend scheduled Board Committee meetings even if they are not a Committee member. Apart from the regular scheduled meetings, ad hoc Board and Board Committee meetings are also held as and when required.