Langham Hospitality Investments (the “Trust”) is constituted by laws of Hong Kong governing the Trust Deed entered into between LHIL Manager Limited (as the “Trustee-Manager” of the Trust) and Langham Hospitality Investments Limited (the “Company”) (collectively “Langham”) as a fixed single investment trust, meaning that the Trust may only invest in the securities and other interests in a single entity, being the Company. The Trustee-Manager is a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of Great Eagle Holdings Limited. In its capacity as trustee-manager of the Trust, the Trustee-Manager has a limited role only in the administration of the Trust and is not involved in the management of the operations of the Company and its subsidiaries. The Company is a company incorporated in the Cayman Islands as an exempted company with limited liability. It is the holding company of the hospitality business carried on by its subsidiaries and currently owns and controls the three Hotels indirectly through its subsidiaries.
Corporate governance is the system by which a company is directed and managed. The governance structure reflects the distribution of rights and responsibilities among the Board of Directors, Management and Holders of Share Stapled Units. The Company and the Trustee-Manager are committed to maintaining and developing a high standard of corporate governance practices that are designed to enhance company image, create value for our Holders of Share Stapled Units, and reduce the risk of fraudulent practices and ultimately service the long-term interests of our Holders of Share Stapled Units. The following constitute key components of Langham’s governance framework:
Corporate Governance Report (2021)
Memorandum and Articles of Associations of the Company
Deed of Trust Constituting Langham Hospitality Investments
Employee Code of Conduct
Code of Conduct regarding Securities Transactions by Directors and Relevant Employees
Policy on the Preservation and Prevention of Misuse of Inside Information
Reporting and Monitoring Policy on Connected Transactions
Anti-Fraud, Bribery and Corruption Policy
Unitholder Communication Policy
Board of Directors and Company Secretary
Notwithstanding the fact that the Directors of the Trustee-Manager and the Directors of the Company must always be the same individuals pursuant to the Trust Deed, two respective Boards have their own distinct responsibilities. The Trustee-Manager Board is responsible for taking all reasonable steps to ensure that the Trustee-Manager discharges its duties under the Trust Deed, while the Company Board is responsible for setting out the overall strategies and business objectives of the Group and providing oversight of their implementation by the management team.
The Trustee-Manager Board and the Company Board play a central support and supervisory role in Langham’s corporate governance duties. The Boards are ultimately accountable for Langham’s activities, strategies, financial performance and corporate governance policies and assumes responsibility for leadership and control of Langham.
The Executive Director is primarily responsible for the overall day-to-day management of Langham and will have oversight of the performance of the Hotel Manager and the business operations of Langham.
The Non-executive Directors of the Company will assume a strategic role in formulating the development plans of Langham and in particular, the development of possible further synergies between Langham and its holding company for the mutual benefit of both groups.
Independent Non-executive Directors
The role of the Independent Non-executive Directors is to help develop strategy and, where appropriate, to give objective criticism and informed comments and advice. They are expected to bring an independent judgment to bear on issues of strategy, policy, performance, accountability, resources including key appointments and standards of conduct. They should take the lead where potential conflicts of interests arise and should scrutinize Langham’s performance in achieving agreed corporate goals and objective, and monitoring performance reporting.
The Company Secretary shall report to the Chairman of the Board. She is responsible to the Board for facilitating compliance with Board procedures. All Directors have access to the advice and services of the Company Secretary to ensure that board procedures, and all applicable law, rules and regulations are followed. In each financial year, the Company Secretary will take no less than 15 hours of relevant professional training.
To provide effective oversight, the Company established an Audit Committee, a Remuneration Committee and a Nomination Committee respectively in 2013. The Trustee-Manager established an Audit Committee in 2013. The requirement to establish a Nomination Committee is not relevant to the Trustee-Manager as the Trust Deed requires that the Directors of the Trustee-Manager shall at all times comprise the same individuals who serve as Directors of the Company. The requirement to establish a Remuneration Committee is also not applicable to the Trustee-Manager as its Directors are not entitled to any remuneration payable by the Trust or the Trustee-Manager, and the Trustee-Manager does not have any employee.
Each Board Committee has a written Terms of Reference setting out its composition, responsibilities and authority and the terms of reference of the Board Committees will be reviewed periodically to ensure that they comply with the latest legal and regulatory requirements and reflect developments in best practices.
The following paragraphs summarized the composition, roles and functions of the committees of the Company and Trustee-Manager:
Company Audit Committee
The Company established the Company Audit Committee in compliance with Rule 3.21 of the Listing Rules and the Corporate Governance Code as set out in Appendix 14 to the Listing Rules. The Audit Committee of the Company shall, amongst other things, review the reports and proposals from management and make recommendations to the Company Board in respect of the financial reporting and other statutory obligations, risk management and internal control system, and audit process with a view to assisting the Company Board to fulfill its duties in relation to risk management, internal control and financial management.
The members of the Company Audit Committee are:
Mr. WONG Kwai Lam (Chairman)
Professor CHAN Ka Keung, Ceajer
Professor LIN Syaru, Shirley
Company Remuneration Committee
The Company established a Remuneration Committee in compliance with Rule 3.25 of the Listing Rules and the Corporate Governance Code as set out in Appendix 14 to the Listing Rules. The Remnueration Committee sets up formal and transparent procedures for setting policy on Executive Director’s remuneration and for fixing the remuneration packages for all Directors and senior management and to ensure remuneration levels are sufficient to attract and retain Directors to run the Company successfully without paying more than necessary.
The members of the Remuneration Committee are:
Professor CHAN Ka Keung, Ceajer (Chairman)
Dr. LO Ka Shui
Professor LIN Syaru, Shirley
Mr. WONG Kwai Lam
Company Nomination Committee
The Company established a Nomination Committee in compliance with the Corporate Governance Code as set out in Appendix 14 to the Listing Rules. The Committee is responsible diversity to formulate policy and make recommendations to the Company Board on nomination, appointment or re-appointment of Directors and board succession. It focuses on strengthening, broadening, balancing and understanding the range of skills, experience and diversity on the Company Board.
The members of the Nomination Committee are:
Professor LIN Syaru, Shirley (Chairperson)
Dr. LO Ka Shui
Professor CHAN Ka Keung, Ceajer
Mr. WONG Kwai Lam
Trustee-Manager Audit Committee
The Audit Committee of the Trustee-Manager shall, amongst other things, review the reports and proposals from management and make recommendations to the Trustee-Manager Board in respect of the financial reporting and other statutory obligations, risk management and internal control system, and audit process of the Trust and the Trustee-Manager with a view to assisting the Trustee-Manager Board to fulfill its duties in relation to risk management, internal control and financial management.
The Trust Deed also requires that the memberships of the Company Audit Committee and the Trustee-Manager Audit Committee must be the same. The members of the Trustee-Manager Audit Committee are:
Rights of Holders of Share Stapled Units
Rights to Convene / Call a General Meeting
Pursuant to Article 12.3 of the Company’s Second Amended and Restated Articles of Association, extraordinary general meetings shall be convened on the written requisition of any one or more member(s) of the Company deposited at the principal office of the Company in Hong Kong or, in the event the Company ceases to have such a principal office, the registered office specifying the objects of the meeting and resolutions shall be added to a meeting agenda and signed by the requisitionists, provided that such requisitionists held as at the date of deposit of the requisition not less than, for as long as the Trust Deed remains in force, 10% of the paid up capital of the Company which carries the right of voting at general meetings of the Company. Within 21 days from the date of deposit of the requisition, the Company Board shall proceed to convene the meeting to be held with such notice in accordance with Article 12.4.
Rights to Appoint / Remove Trustee-Manager
Pursuant to Clause 23.1 of the Trust Deed, holders of Units of the Trust may (i) by requisition convene a meeting to vote on a resolution to remove the trustee-manager and (ii) nominate a company which has consented in writing to serve as the replacement trustee-manager for appointment at general meeting by serving the requisition/nomination on the incumbent trustee-manager, provided that the holders of Units making such requisition and/or nomination hold not less than 5% of the total voting rights of all holders of Units at the date of the requisition/nomination.
Proposing a Person for Election as a Director
Pursuant to Article 16.5 of the Company’s second Amended and Restated Articles of Associations, two members of the Company (not including the person to be proposed) together representing not less than 10% of the total voting rights of all the members are entitled to propose a person for election as a Director of the Company at the general meeting by lodging a written notice with the principal office of the Company in Hong Kong of their such intention together with the consent of the nominated person at least 7 days before the date of the general meeting.