Practices on SCGP's Corporate Governance
Composition of the Board of Directors
SCGP's Board of Directors consists of 12 directors, of which 8 (or 66.6% of the total number of directors) are independent directors, with 11 non-executive directors, accounting for more than 90% of the total number of directors. The Chairman of the Board is an independent director and does not hold the position of Chief Executive Officer. In addition, the Board sets a condition that an independent director must not hold more than 0.5% of the total number of voting shares in SCGP, its parent company, a subsidiary, associate, major shareholder or controlling person, including shares held by related persons. This provision is more stringent than the criteria defined in the notification of the Capital Market Supervisory Board.
The Proportion of The Directors
Number and name of other listed companies that SCGP directors being the board members are disclosed in the Annual Report. Although SCGP’s Charter of the Board of Directors allows each director to be the board members of no more than 4 other listed companies, in 2021 all of eleven SCGP non-executive directors have been the board members of no more than 3 other listed companies as shown below:
|No.||Name of non-executive director||No. of other listed company that non-
executive director being the board member
|1||Mr. Prasarn Trairatvorakul||3|
|2||Mr. Cholanat Yanaranop||1|
|3||Mrs. Kaisri Nuengsigkapian||2|
|4||Mr. Chalee Chantanayingyong||0|
|5||Mrs. Pongpen Ruengvirayudh||0|
|6||Professor Kitipong Urapeepatanapong||1|
|7||Mr. Vanus Taepaisitphongse||0|
|8||Mr. Vibul Tuangsitthisombat||0|
|9||Mrs. Suphajee Suthumpun||2|
|10||Mr. Thiraphong Chansiri||3|
|11||Mr. Thammasak Sethaudom||0|
One Share One Vote
Giving importance of equitable actions for shareholders, SCGP Board of Directors has developed one share one vote policy which has been approved by the Shareholders and incorporated in the registered Articles of Association of SCGP (Clause 26) that one share is entitled to one vote. All issued shares of SCGP are common shares. This designates that SCGP does not offer any golden share or dual class share to any shareholders or under any circumstance.
The top 10 major shareholders of SCGP are disclosed in the Annual Report (page 53, pdf page 55). The Siam Cement Public Company Limited (SCC), a company incorporated under Thai law and listed in the stock exchange of Thailand, holds 72.12% of SCGP total shares. SCC is not a government institution nor organization. Therefore, the government does not have the right to nominate Government Representatives to SCGP’s board. Moreover, in SCGP’s Articles of Association (Clause 27), it is stated that decisions on certain significant matters require no less than three quarters (75%) of the total number of votes of shareholders attending the meeting with the right to vote.
Shareholding structure of the Company as at December 31, 2021 is shown in the table below.
|Major Shareholders||Number of shares
(registered and paid-up capital)
|1||The Siam Cement Public Company Limited||3,095,882,660||72.12|
|2||Thai NVDR Company Limited||173,579,410||4.04|
|3||Ladawan Capital Company Limited||71,498,900||1.67|
|4||Social Security Office||44,872,386||1.05|
|5||Mr. Narat Jiwalai||40,615,000||0.95|
|6||SOUTH EAST ASIA UK (TYPE C) NOMINEES LIMITED||39,472,076||0.92|
|7||STATE STREET EUROPE LIMITED||29,374,823||0.68|
|8||THE BANK OF NEW YORK MELLON||19,356,100||0.45|
|9||Mr. Taweerat Prungpattanasakul||15,800,000||0.37|
|10||Mrs. Woraphan Chuengsap-Paisan||14,200,000||0.33|
Fair Bid Treatment Provisions
In case of SCGP overtaken by other firms, SCGP which is under Thai Laws. There is minority shareholder protection mechanism called Mandatory Tender Offer (MTO). If 'investor' purchases SCGP shares reaches 25% of total shares, such investor must conduct mandatory tender offer (means that such investor must offer to buy all of SCGP shares from all shareholders at the same price).
Tax reporting and Effective Tax Rate
Supervision and Compliance with SCG Packaging's Business Code of Conduct
The Board of Directors has approved and enforced the SCGP Corporate Governance Handbook, which consists of structure and mechanisms for corporate governance and corporate governance policies and guidelines extending to the business ethics or SCGP’s Code of Conduct so that all full-time and special contract employees (SCGP does not employ part-time employees) have to comply. The Board of Directors supervises and acts as an excellent example for the management team. In addition, the Board of Directors assigned the Audit Committee and the Corporate Governance and Nomination Committee to oversight the operations in accordance with the governance, risk management, and control principles. The diagram below shows the corporate governance structure of SCG Packaging.
SCG Packaging Public Company Limited commits to promote and support learning and understanding the governance and business ethics, through the Board of Directors and top executives as a role model to the employees at all levels (Tone from the top). Annually every July, the company requires an ethics e-testing to educate and test all employees on the Code of Conduct. The Code of Conduct is regularly updated and inserted into all fundamentally courses of the company.
In addition, the company has prepared the Supplier Code of Conduct, which clearly defines business ethics guidelines to communicate with our business partners in order to ensure mutual understanding and use it as a norm for further business operations.
Besides formulating policies and informing on business ethics, the Internal Audit Office is responsible for assessing operational risks per the SCGP’s Code of Conduct in each operation process of the company and its subsidiaries to prioritize risks and conduct an annual audit.
SCGP has developed a Whistleblowing System for employees and external stakeholders to report instances of whistleblowing and acts that do not comply with corporate governance, the Code of Conduct, Regulations, laws and the Anti-corruption Policy – this includes acts of corruption. The whistleblowing can be done via various channels, both verbally and written. Employees can report instances of this through the Intranet Web, with identifying their names or anonymous. External stakeholders can make reports in Thai or English through SCGP’s website (https://www.scgpackaging.com/en) at any time, with identifying their names. The Company has clearly defined procedures for receiving complaints, such as the confidential collection of facts, the appointment of a fact-inspecting working panel, the setup of an investigation committee, the consideration for approving a penalty, and the complaint resolution report as described in diagram of process for handling complaints below.
The whistleblowers can follow up on complaint result through the system. However, the facts from the investigation have been used to define further practice guidelines and preventive measures. This system helped promote more ethical operations and sustainable development. For the security of the system, two layers of passwords are adopted and the server which was separated from other applications were used to safeguard the security and prevent information leakage to related parties. The company also maintained confidentiality and ensures protection to whistleblowers as required by the SCGP’s Code of Conduct and the whistleblowing policy. In addition, the Audit Committee has reviewed the summary of investigations, penalties, and formulated preventive measures for re-occurred cases in the various systems as appropriate for business conditions.
The company has established measures to protect and provide fairness to those who give information or give clues about corruption or non-compliance with laws, rules, company regulations, SCG Packaging’s Code of Conduct and the Whistleblowing Policy. The details are as follows.
- Whistleblowers who are personnel of the Company may choose to hide their identities if they feel that they might be adversely affected. However, valid details or evidences must be provided to prove that the reported corruption or misconduct is not fraudulent. However, if the whistleblowers reveal their names, the Company will be able to notify them of progress and mitigate impact with greater ease and convenience.
- The Company considers all relevant information confidential and will reveal only as necessary, taking into consideration the safety and possible consequences to the whistleblowers, information sources, or parties related to the Company.
- If the whistleblowers feel that their safety is threatened or that they may be affected, they may request appropriate protection measures from the Company. The Company may prescribe protection measures without such a request if it appears that the whistleblower is likely to be affected or put in danger.
- SCG Packaging takes a fair and suitable approach without retaliation, harassment, or discrimination when engaging with the complainant/whistleblower/ informant who reports fraud, breaches of state laws or regulations, non-compliance with the Company’s Articles of Association or the SCG Packaging’s Code of Conduct, even in the event that they file a lawsuit, testify, give a testimony, or cooperate with a court or a government agency. Failure to comply with this approach is considered a breach of discipline and subject to disciplinary action as well as any applicable legal punishment.
- Those affected will receive compensation through an appropriate and fair process
Reporting on Violation
In 2021, there were complaints through whistleblowing system which external stakeholders and employees were involved in informing clues of the offenders arising from non-comply with corporate governance principles, Code of Conduct, Compliance policy, regulation, the Anti-corruption policy, and Law including fraudulent actions, 4 core values, SCG Packing’s Code of Conduct or Supplier Code of Conduct, a total of 8 cases; 7 cases were investigated and 1 case is under investigation. 4 cases were not in accordance with the complaint or unclear evidence, there was a violation of unethical conduct and 2 cases were failure to comply with company rules / lack of good management. There were no complaints related to the Anti-corruption policy, antitrust policy, Human Rights policy, and Internal data use. The damage was insignificant.
|Reporting on violation||Number of complaints (cases)|
|Total number of complaints||10||8|
|The number of complaints under investigation||0||1|
|The number of investigated complaints||11
(including one complaint of the year 2019)
|Investigated Complaints by types|
|1. Violation of Unethical Conducts|
|1.1 Conflict of Interest||0||1|
|1.3 Human Rights - Violation||0||0|
|1.4 Antitrust - Violation||0||0|
|1.5 Use of insider Information||0||0|
|2. Failure to comply with company rules / lack of good management||1||2|
|3. Not in accordance with the complaint||10||4|
Performance monitoring and reporting
Annually, the Internal Audit Office reports on the ethical business performance through the Audit Committee, the Governance and Nomination Committee and the Board of Directors. Other than that, the preventive practices and guidelines are adapted from past business ethics violations. These will help promote ethical business operations and contribute to the sustainable development of business ethics.
Examples of corrective actions and re-occurrence prevention measures
Unethical Conducts cases
- Communicate SCG Packing’s Code of Conduct in order to emphasis on involvement in SCGP transactions with related parties or SCGP employees that may cause conflicts of interest.
Improper Management cases
- Prepared a clear and written operating manual to be used as a guideline. When there is any changes in the policies/operating procedures, amend the operating manual to be up-to-date and communicate to the operators in order to achieve mutual understanding and effective implementation.
- Organized a preventive seminar on “Case Studies on Corruption and Non-Compliance with Laws, Regulations, Company Policies and Code of Conduct and Three Lines Model” for functions that at risk to offense, related to financial transactions or contacting with external parties, etc.
- Modified the communication method of the SCG Packaging’s Code of Conduct to be in line with the epidemic situation of COVID-19, during the Work from Home period. The responsible person has prepared a VDO Clip and a comprehension test about SCG Packaging’s Code of Conduct for easy access.
- Testing on knowledge and understanding about SCG Packaging’s Code of Conduct and Anti-corruption Policy via “Ethics e-Testing” Which all participants have to pass the test with a score of 100%
SCGP Cybersecurity Governance
SCGP has oversight of information technology governance and cybersecurity through management at three levels, from Governance level, Management level and Operational level.
- Governance level - SCGP joins SCG (parent company) governance committee at 2 groups, as shown below, with objective to determine the direction and implementation on Cyber security within SCGP
a) Information Technology Governance Committee (ITG), represented by Technology and Digital Platform Director (Mr.Surasak Amawat) and
b) SCG Cybersecurity Governance Committee, represented by Information Technology Director (Mr. Thanachai Phuthanadee)
Role and Responsibility
- The ITG has responsibility of establishing policies and regulations regarding the use of IT and communication technology of SCG (SCG e-Policy) in accordance with ISO 27001.
- The SCG Cybersecurity Governance Committee was appointed to oversee SCG’s information technology security practices, to ensure that they are aligned with business directions and can effectively prevent business operations from cyber threats.
- Management Level - Technology and Digital Platform Director is in charge of SCGP's Information Technology Governance and Cybersecurity, adopting policies and practices from the SCG by being a committee in the ITG and supervise it in the context of SCGP by reporting directly to the Chief Executive Officer.
- Operational Level – Information Technology is overseen by the Information Technology Director, who is one of the committee members of the SCG Cybersecurity Governance Committee and is responsible for directly overseeing the operations of information technology and cybersecurity.
This ensures that SCGP has sequential and clear oversight of information technology governance and cybersecurity as shown in the diagram.
IT External Verification
SCGP has been audited, as part of external verification of SCG in 2021, scope of audit conducted by KPMG covering (a) Access to program and data , (b) Program changes, (c) IT application controls review. Valuable comments from KPMG has been currently applied among SCGP for better data security.
SCGP Contribution to Organization
As per SCGP Code of Conduct, SCGP remains politically neutral, and does not give financial support or support any particular political party, political group, or candidates of any kind in local, regional or national levels or person with political influence. Moreover, as stated in our SCGP Anti-Corruption policy
(1) The Company is politically neutral and shall not perform any act which can be considered direct or indirect financial support or other kinds of favors towards political parties, political alliances or candidates in a political election on local, regional or international levels.
(2) The Company personnel shall strictly comply with the Company’s Code of Conduct.
In year 2021, SCGP gives Zero financial or any kind of supports to any political party, political group, or candidates in local, regional or national levels or person with political influence or Lobbying or interest representation or similar and other categories (such e.g. spending related to ballot measures or referendums).
We made 2,462,438.17 Thai Baht contributed to and spent for Trade associations or tax-exempt groups (e.g. think tanks) as shown below.
|Contributions to & Spending for||Paid Amount (THB)|
|Lobbying, interest representation or similar||0||0|
|Local, regional or national political campaigns / organizations / candidates||0||0|
|Trade associations or tax-exempt groups (e.g. think tanks)||500,177.01||2,462,438.17|
|Other (e.g. spending related to ballot measures or referendums)||0||0|
|Total contributions and other spending||500,177.01||2,462,438.17|
|Coverage (as % of revenue)||100||100|
The first seven organizations contributed by SCGP are the following alliances: 1. The Federation of Thailand Industries (F.T.I), 2. Thailand Institute of Packaging and Recycling Management for Sustainable Environment (TIPMSE), 3. A CIRCULAR ECONOMY FOR FLEXIBLE PACKAGING (CEFLEX), 4. The Thai Chamber of Commerce, 5. Foodvalley NL, 6. Technical Association of Pulp and Paper Industry (TAPPI), and 7. Asian Corrugated Case Association (ACCA)
The first seven payments to professional groups and associations in 2021
|Name of organization||Type of Organization||SCGP Position||Paid Amount (THB)|
|1. The Federation Of Thai Industries (FTI)||Trade Association||Collaboration & elevation for industrial development with digitalization, technology and innovation towards sustainable business growth.||1,085,822.45|
|2. Thailand Institute of Packaging and Recycling Management for Sustainable Environment (TIPMSE)||Non-profit organization (TIPMSE is an institute under the umbrella of the FTI)||Collaboration and elevation of recycling-oriented society, include supporting for pilot project related to circular economy principle. Moreover, SCGP employees are the committee members of the organization.||600,000|
|3. Circular Economy for Flexible Packaging (CEFLEX)||Non-profit organization||Collaboration and enhancement for a circular economy for entire value chain of flexible packaging.||460,693.20|
|4. The Chambers Of Commerce And Board Of Trade Of Thailand||Trade Association||Collaboration for enhancement competitiveness and drive company to grow in the global market sustainably.||91,500.00
(included Spanish-Thai Chamber of Commerce)
|5. Foodvalley, NL||Non-profit organization||Collaboration for innovation acceleration and business development and enhancement the competitiveness of the food industry.||85,424.94|
|6. Technical Association of the Pulp and Paper Industry (TAPPI)||Non-profit organization||Networking and collaboration for Publications and Standards, Methods, Technical Information and Innovation.||77,151.60|
|7. Asian Corrugated Case Association (ACCA)||Trade Association||Collaboration & elevation for international cooperation concerning exchange of experience and knowledge in corrugating technology including promoting the education and training of corrugated specialist.||61,845.98|
Largest Contributions & Expenditures
In 2021, SCGP made large contribution to drive sustainable business growth in accordance with ESG and principles of circular economy. The 2 main contributions are for Sustainable Business and circular Economy.
|Issue or Topic||Corporate Position||Description of Position / Engagement||Total spend in FY 2021 (THB)|
|Collaboration for Sustainable Business||Support||SCGP is committed to conduct business for sustainable growth in accordance to ESG framework. Engagement with our stakeholders by being partnership and collaboration across sectors—government agencies, businesses and civil societies is a key factor. SCG has joined The Federation of Thai Industries (F.T.I),The Chambers Of Commerce And Board Of Trade Of Thailand, and Foodvalley, NL, Technical Association of the Pulp and Paper Industry (TAPPI), and Asian Corrugated Case Association (ACCA). The main purposes are for collaboration and elevation for Sustainable Industry development with digitalization, technology, innovation acceleration and enhancement competitiveness of the industry. SCGP applies standards, tools and knowledge of them as a model and sharing those knowledge our stakeholders.||1,401,744.97|
|Collaboration in driving Circular Economy||Support||
SCGP adheres to creating innovative packaging for consumers and a sustainable World by following circular economy principles for reducing the probable impacts. To be able to does that we are seeking and being partners with external organizations, both public, and private sectors. For circular Economy, SCGP has joined Thailand Institute of Packaging and Recycling Management for Sustainable Environment(TIPMSE), The Federation of Thai Industries for collaboration and elevation of recycling-oriented society, include supporting for pilot project related to circular economy principle. Moreover, SCGP employees are the committee members of the organization. Also, SCGP has joined Circular Economy for Flexible Packaging(CEFLEX) for collaboration and enhancement for a circular economy for entire value chain of flexible packaging.Please see collaboration in driving Circular Economy in 2021 Sustainability Report, topic “Building partnerships with external organizations” page 8 (PDF page 10)