Manulife US REIT - Annual Report 2021

MANULIFE US REIT 122 Board Membership Principle 4 The Board has a formal and transparent process for the appointment and reappointment of directors, taking into account the need for progressive renewal of the Board. To ensure the long-term effectiveness of the Board, the Manager has established an NRC at the outset to make recommendations to the Board for the appointment and reappointment of each Director. The NRC’s written terms of reference, as approved by the Board, sets out its scope of authority and responsibilities in performing its functions. The NRC comprises three Directors, the majority of whom are independent. The members of the NRC are: 1. Dr Choo Kian Koon (Chairman) 2. Mr Hsieh Tsun-Yan 3. Professor Koh Cher Chiew Francis The NRC is responsible for reviewing the succession plans for the Board (in particular the appointment and/or replacement of the Chairman of the Board), Board Committees and senior management (including the CEO). In this regard, it has put in place a formal process for the renewal of the Board, including the re-election of Directors to the Board once every two years, and the selection of new Directors. Each Director provides an annual confirmation that he/she is “fit and able” and consents to continue in office and submit himself/herself for nomination and re-election as a Director of the Manager on a rotational basis. The NRC leads the process and makes recommendations to the Board as follows: 1. the NRC reviews annually the balance and diversity of skills, experience, gender and knowledge required by the Board and the size of the Board which would facilitate decision-making; 2. in light of such review and in consultation with management, the NRC assesses if there are any inadequate representations in respect of those attributes and if so, prepares a description of the role and the essential and desirable competencies for a particular appointment; 3. external help (for example, the SID, search consultants or advertisements) may be used to source for potential candidates if need be. Directors and management may also make suggestions; 4. the NRC meets the shortlisted candidate(s) to assess suitability based on the skills required and skills represented on the Board and whether the candidate’s skills, knowledge and professional experience will complement the existing Board, and whether he or she is a fit and proper person for the office in accordance with the Guidelines on Fit and Proper Criteria issued by the MAS (which requires the candidate to be, amongst other things, competent, honest, to have integrity and be financially sound). The NRC will also ensure that the candidate(s) is/are aware of the expectations and the level of commitment required of the proposed directorship; and 5. the NRC makes recommendations to the Board for approval. In reviewing succession plans, the Board has in mind the Manager's strategic priorities and the factors affecting the long-term success of the Manager. Further, the Board aims to maintain an optimal Board composition by considering the trends affecting the Manager, reviewing the skills needed and identifying gaps, including considering whether there is an appropriate level of diversity of thought. In addition, the Board considers different time horizons for succession planning as follows: (i) long-term planning, to identify competencies needed for the Manager's strategy and objectives; (ii) medium-term planning, for the orderly replacement of Board members and key management personnel, and (iii) contingency planning, for preparedness against sudden and unforeseen changes. Corporate Governance