Corporate Governance
Striving for fair and transparent business governance and creating awareness among employees at all levels.
| Target | Performance in 2024 |
|---|---|
Corporate Governance
|
0 violation High Rating (5 stars) |
Information Technology Security and Cybersecurity
|
99.5% 0 complaint |
Corporate Governance
The Meeting of the Board of Directors held on November 26, 2024, passed a resolution to establish one additional sub-committee, namely the Risk Oversight Committee, effective from January 1, 2025, onwards. This sub-committee is therefore not included in the Corporate Governance Structure information as of December 31, 2024.
Board of directors
Sub-Committees
Structure of the Board of Directors
Board Effectiveness
The number and name of other listed companies that SCGP directors are the board members are disclosed in the Annual Report.
SCGP’s Charter of the Board of Directors allows each director to be a board member of no more than 4 other listed companies. The number of directorships that each non-executive director holds not exceed 4 companies in 2024 as shown in the table below.
Succession Plan and Policy for CEO and Top Executives
Succession planning is an important tool to enable succession between each generation of executives to pass on visions, medium-term business development plans, and sustainable development goals. Factors to consider are as follows;
- Essential competency and skills for CEO and Top Executives. SCGP evaluated a high-performance employee group (or talent group) annually to see whether their characteristics, knowledge, and capabilities aligned with the Company’s future organizational capabilities, such as customer and consumer centricity, technology and digital adaptability, global mindset and perspective, etc. In addition, SCGP will support the talent group’s career path and employee development through different learning opportunities, both for professional development (Functional) and leadership development (Transformative Leadership). This will prepare employees to support SCGP’s business expansion, both domestically and overseas, and rise to the rank of future leaders.
The Chief Executive Officer (CEO) shall possess the knowledge, capability, experience and expertise in the fields of SCGP’s core business and other businesses related to its products. Such knowledge, capability, experience, and expertise shall cover all elements throughout the pipeline, from upstream to downstream, including manufacturing processes, technologies, diverse and up-to-date packaging innovations, solutions offerings, and sales. The Chief Executive Officer shall be knowledgeable enough to expand SCGP’s businesses in the local, regional and international markets. Also, they shall be equipped with high leadership and be able to lead the organization and its employees towards its strategic goals. - Criteria for CEO and Top Executives nomination. The Board of Directors determined an agenda for succession planning of the Chief Executive Officer and executives and its progress, at least once a year, with the Remuneration Committee’s recommendations, and offered comments in a sincere, careful, fair, and unbiased manner to increase the successor pool with individuals who possess appropriate potential, qualification and competency, domestically and internationally. At least three candidates shall be nominated for each position. In 2024, the Board of Directors considered and followed up on the progress of succession planning and executive development at the meetings twice, in August and November.
- CEO and Top Executives nomination process. To nominate top executives, the Board of Directors appoints the Chief Executive Officer according to the Remuneration Committee’s recommendations. The Remuneration Committee is responsible for considering succession plans for the Chief Executive Officer and the SCGP’s top executives and proposing them to the Board of Directors for further consideration to maintain performance continuity. In this regard, the Chief Executive Officer has the power and duty to manage SCGP as assigned by the Board of Directors. This is stated in the Corporate Governance Policy section (in the Scope of Duties and Responsibility of the Chief Executive Officer topic) of this report, which is reviewed annually.
In addition, SCGP annually formulated individual development plans for the Chief Executive Officer and executives. The plans are designed for different time periods, 1-3 years and 4-5 years. They will serve as guidelines for self-development and tools for improving essential business-related skills for enterprise leaders, such as strategic thinking, networking, leadership competency, talent competency, and the leadership pipeline. SCGP also established relocation plans for capability improvement on a wider scale to prepare its successors. The executive development plans included supporting the executives to attend the diverse corporate management programs, such as the Advanced Management Program (AMP), provided by the top global institutes, namely Harvard Business School, Stanford University, London Business School, IMD Business School, INSEAD, etc. The CEO will propose individual development plans to the Remuneration Committee to consider, approve, and report to the Board of Directors.
Performance Evaluation and Compensation Management for the Chief Executive Officer (CEO) and Top Executives
The Board of Directors monitors and evaluates the performance of the Chief Executive Officer (CEO) and Top Executives annually, ensuring the process is fair and thorough. The results of these evaluations are used to determine their compensation. The process for performance evaluation and compensation approval is initially reviewed by the Compensation Committee before being submitted to the Board of Directors for further comments and final approval.
On January 1, 2024, the Board of Directors approved the principles for evaluating the CEO and Top Executives based on the following two factors:
1. Company Performance:
This considers the company's growth in terms of both Absolute Performance and Relative Performance. It involves comparing the company's latest performance against established targets and benchmarking it with leading companies in the same industry.
2. Key Performance Index (KPI):
This is based on four main areas, aligned with the Balanced Scorecard framework, covering both internal and external factors, as follows:
- Financial Performance : Includes metrics like revenue sales, net profits, and M&P incremental.
- Customers & Centricity : Includes factors like cross-selling, packaging solutions, and customer satisfaction.
- Cost Management : Includes considerations such as factory overhead, cost-saving measures, and secured sourcing.
- ESG Sustainability & People : Sustainability goals, external perceptions, environmental and social aspects:
- External Perception Metrics (e.g. Brand Reputation, Stakeholder Satisfaction Survey)
- Environmental Metrics (e.g. Energy Consumption, Greenhouse Gas Emission, Zero Waste to Landfill, Water, Circular Economy etc.)
- Social Metrics (e.g. Occupational Health and Safety, Stakeholder Engagement, Community Satisfaction Survey etc.)
Furthermore, there is an additional assessment criteria for CEO which is CEO Survey. The consideration consists of three main criteria in line with the leadership profile, which comprises Engagement, Innovation & Strategy, and Excellence
SCGP budgets its remuneration in accordance with its short-term and long-term operating results. In the short term, SCGP considers annual operating results, such as revenues from sales, net profit, and EBITDA. In the medium-long term, SCGP takes into account the performance of its five-year plans, such as business expansion, profit growth, market shares, overall sustainable development performance, and ongoing operational enhancement.
Compensation of CEO & Top Executives
Variable performance-based component to pay
To present Notable Focused KPI Matrix for SCG Packaging and its management from an Investor Meeting (Month of March,2025) , the following points can be included, aligned with key areas of focus
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 Company does not have governmental institutions owning more than 5% of the total voting rights as evidenced in the major shareholders list on the Company's website Major Shareholders
and see also the Shareholders' Meeting for additional context or updates related to this matter.
Tax reporting and Effective Tax Rate
SCGP has established tax policy which has been overseen and approved by the board of directors. The tax policy demonstrates Philosophy of SCGP and its affiliates which is to conduct business with fairness, adhering to social and stakeholder's responsibility, all in accordance with its corporate governance policy and code of conduct. With respect to tax policy, SCGP ensures that its business is operated with transparency, fairness and fully comply with laws and regulations in all countries where SCGP operates
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. Link to Corporate Governance Structure
Communication
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.
Auditing
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 ensures that there are internal audits conducted for every system and process within a 5-year timeframe. The planning of these audits takes into consideration the order of risks associated with the company's operations and compliance with various regulations. The internal audit is assessed for quality by external entities every 5 years, following the International Standards for the Professional Practice of Internal Auditing (IIA Standards), which are set by the Institute of Internal Auditors (IIA).
SCGP’s transparent business operations driven through CAC membership
SCGP has been a member of the Thai Private Sector Collective Action Coalition Against Corruption (CAC) since 2020, making this the 5th year of its commitment to conducting business with transparency and zero tolerance for corruption. This aligns with the company’s principles of good governance and long-term sustainability.
SCGP has voluntarily declared its intention to help tackle the problem of corruption and has implemented measures in line with CAC guidelines, including setting internal policies, conducting risk assessments, and establishing practices to prevent corruption.
Throughout this period, SCGP has continuously developed an effective anti-corruption risk management system and promoted awareness among employees at all levels of the importance of conducting business ethically.
SCGP Cybersecurity Governance
SCGP has oversight of information technology governance and cybersecurity through management at three levels, the Governance level, Management level, and Operational level.
Governance level
- SCGP joins SCG (parent company) governance committee in 2 groups, as shown below, with the objective to determine the direction and implementation on Cyber security within SCGP.
SCG Committees Role and Responsibilities a) Information Technology Governance Committee (ITG)
SCGP representative is Technology Digital and Productivity Director
The ITG has the responsibility of establishing policies and regulations regarding the use of IT and communication technology of SCG (SCG e-Policy) in accordance with ISO 27001. b) SCG Cybersecurity Governance Committee
SCGP representative is Information Technology Director
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. - SCGP also appointed 2 committees in order to enhance information technology and cybersecurity governance, including data governance and data stewardship, especially for SCGP.
SCGP Committees Role and Responsibilities a) Information Security Management System (ISMS) Management Committee
Technology Digital and Productivity Director is the Information Security Executive and Information Technology Director (Mr. Thanachai Phuthanadee) is the Information Security Management Representative (ISMR) of the Committee
The ISMS was appointed to set direction and be a consultant for the implementation of the security management system ISO 27001. Consider the policy, objectives, and criteria for measuring, supporting necessary resources, command, and staying tuned for progress in operations. b) Data Governance Steering Committee
Technology Digital and Productivity Director is the Chairman and Information Technology Director (Mr. Thanachai Phuthanadee) is the Committee
The Data Governance Steering Committee was appointed to control, support, and follow up to ensure for complying with the personal data protection laws. Promote, push, and raise awareness to enhance knowledge and understanding in matters of personal data protection to employees and related persons.
The ISMS Management Committee Organization is shown below.
Management Level
Technology Digital and Productivity Director is in charge of SCGP's Information Technology and Cybersecurity Governance, adopting policies and practices from the SCG by being a committee in the ITG and supervising it in the context of SCGP, in order to achieve the ISMS objectives of SCGP and Control and verify data management so that related parties can carry out data management in accordance with the policy. rules, regulations, or regulations. The management performance is reporting directly to the Chief Executive Officer periodically.
Operational Level
The Information Technology Director is overseeing the Information Technology and Cybersecurity execution and operation by being a committee member of the SCG Cybersecurity Governance Committee and being an ISMR of the ISMS Management Committee and also be a committee of the Data Governance Steering Committee.
This ensures that SCGP has sequential and clear oversight of information technology and cybersecurity governance as shown in the IT Organization Structure below.
IT Organization Structure
Information Security Management System
SCG Packaging Public Company Limited has established an operational framework for the Implementation of the Information Security Management System (ISMS Framework), whish is divided into four phases as follows:
- Planning
- Doing
- Checking
- Acting
IT External Verification
SCGP has been certified for Information Security Management System – ISO/ IEC 27001:2022 by BSI, for registered activities which are 1. Information security management system and supporting function for DATA CENTER operation, and 2. DATA CENTER operation including supporting system and facilities.
SCGP Contribution to Organization
As per the 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 at local, regional, or national levels or person with political influence. Moreover, as stated in our SCGP Anti-Corruption policy
(1) The Company shall maintain political neutrality and shall not act in the interest of or provide financial or other support to political parties, political coalitions, political figures, or political candidates, either directly or indirectly, either at the local, regional, or national levels.
(2) The Company’s personnel shall strictly comply with the SCGP’s Code of Conduct in relation to political action.
In year 2024, SCGP gives Zero financial or any kind of support to any political parties, political groups, or candidates at local, regional, or national levels or the 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 2,208,560 Thai Baht contributions to and spent for Trade associations or tax-exempt groups (e.g. think tanks) as shown below.
| Contributions to & Spending for | Paid Amount (THB) | |||
|---|---|---|---|---|
| 2021 | 2022 | 2023 | 2024 | |
| Lobbying, interest representation or similar | 0 | 0 | 0 | 0 |
| Local, regional or national political campaigns / organizations / candidates | 0 | 0 | 0 | 0 |
| Trade associations or tax-exempt groups (e.g. think tanks) | 2,462,438 | 1,643,769 | 3,085,425 | 2,208,560 |
| Other (e.g. spending related to ballot measures or referendums) | 0 | 0 | 0 | 0 |
| Total contributions and other spending | 2,462,438 | 1,643,769 | 3,085,425 | 2,208,560 |
The first 8 Organizations contributed by SCGP are World Business Council on Sustainable Development (WBCSD), Global Compact Network Association, CDP Worldwide, Federation of Thai Industries, Thai Chamber of Commerce, Asian Corrugated Case Association, Thailand Institute of Packaging and Recycling Management for Sustainable Environment (TIPMSE).
The first eight payments to professional groups and associations in 2024
| Organizations | Type of Organization | SCGP Position |
|---|---|---|
| 1. Global Compact Network Association of Thailand | Non-profit organization (UNGC’s local network in Thailand) | Collaboration for the voluntary initiative to align strategies and operations with UNGC 10 principles in the areas of human rights, labour, environment including Climate Resilience and Paris Agreement, and anti-corruption, and to take strategic action to support the UN Sustainable Development Goals |
| 2. World Business Council for Sustainable Development | Non-profit organization | Joining as a member of WBCSD's Forest Solutions Group (FSG) and provides environmental and social information support to create guidelines related to forest products and deforestation. Including the contents of the TNFD Forestry Sector Guidelines. |
| 3. Federation of Thai Industries (FTI) | Trade Association | Collaboration & elevation for industrial development with digitalization, technology, and innovation toward sustainable business growth |
| 4. CDP Worldwide | Non-profit organization | Applies their standards, tools, and knowledge to measure, manage, disclose and ultimately reduce environmental impacts |
| 5. The Thai Pulp and Paper Industries Association | Trade association | Collaboration & elevation for cooperation concerning the exchange of experience and knowledge in pulp & paper. Moreover, SCGP employees are the executive committee of the organization. |
| 6. 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 a recycling-oriented society, include supporting pilot projects related to the circular economy principles. This will be resulting in GHG emission reduction. Moreover, SCGP employees are the committee members of the organization. |
| 7. ASIAN CORRUGATED CASE ASSOCIATION (ACCA) | Trade Association | Collaboration & elevation for international cooperation concerning the exchange of experience and knowledge in corrugating technology including promoting the education and training of corrugated specialists. |
| 8. The Thai Chamber of Commerce | Trade Association | Collaboration for enhancement competitiveness and drive the company to grow in the global market sustainably. |
SCGP participated in the United Nations Global Compact (UNGC) mid of 2022 and have been declared our intention to address the issue of “Preventing and solving problems caused by climate change.” We also joined the Thailand Carbon Neutral Network (TCNN) as a Climate Action Initiator member in 2022. The contribution to TCNN was made in early 2023 about 20,000 THB.
Largest Contributions & Expenditures
In 2024, SCGP made a large contribution to drive Sustainable Business growth following ESG and principles of Circular Economy. The 2 main contributions are Sustainable Business and Circular Economy. Both largest contributions are conforming to Paris Agreement and our Net Zero pathway.
| Issue or Topic | Corporate Position | Description of Position / Engagement | Total spend in FY 2024 (THB) |
|---|---|---|---|
| Collaboration for Sustainable Business | Support | SCGP is committed to conducting business for sustainable growth following the ESG framework. Engagement with our stakeholders through partnership and collaboration across sectors—government agencies, businesses, and civil societies is a key factor. SCGP has joined World Business Council for Sustainable Development (WBCSD), the Global Compact Network Association of Thailand (GCNT), The Chambers of Commerce, The Federation of Thai Industries (FTI),CDP Worldwide, Asian Corrugated Case Association (ACCA) and The Thai Pulp and Paper Industries Association Paper .The main purposes are for collaboration and elevation for Sustainable Industry development with digitalization, technology, innovation acceleration, and enhancement of competitiveness of the industry including Climate Resilience and Paris Agreement Alignment. SCGP applies standards, tools, and knowledge of them as a model and shares that knowledge with our stakeholders. | 1,919,855 |
| 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 do that we are seeking and being partners with external organizations, both public and private sectors. For the circular Economy, SCGP has joined the Thailand Institute of Packaging and Recycling Management for Sustainable Environment (TIPMSE), The Federation of Thai Industries for collaboration and elevation of a recycling-oriented society, including supporting pilot projects related to circular economy principles. Moreover, SCGP employees are the committee members of the organization. | 288,705 |
Whistleblowing System
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, English, Vietnamese, and Khmer through SCGP’s website Whistleblowing System SCG Packaging 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.
Whistleblower Protection
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 2024, there were cases involving non-compliance with laws, SCGP’s regulations, the Anti-Corruption Policy, the Corporate Governance Policy, SCGP’s Four Core Values, the Code of the Conduct or Supplier Code of Conduct as stated below:
Performance monitoring and reporting
In 2024, a total of 12 cases involving noncompliance with laws, Company’s regulations, Anticorruption Policy, SCG Packaging’s Corporate Governance Policy, SCG Packaging’s Four Core Values, SCG Packaging’s Code of Conduct or SCG Packaging’s Supplier Code of Conduct were filed through the SCGP Whistleblowing System by external parties and employees. Of these, 10 cases were completely investigated (including 4 pending cases from 2023), divided into 4 cases that did not comply with complaints or had unclear evidence, 1 cases that were violations of ethics, and 5 cases that involved inappropriate management. None of the issues were related to non-compliance with Anti-corruption Policy, Antitrust Policy, SCGP Privacy Policy and insider information use. The damages were non-material. Findings from the investigations were taken into consideration for the determination of future procedures and preventive guidelines. Moreover, the Audit Committee had supervised the review of whistleblowing policies, fraud inspections, risk assessments, review conclusions and penalties, and the determination of preventive measures for potential fraud across systems as per their appropriateness with the continual business environment continuously.
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%