Corporate Governance CG Voices : Issue 01: Apr - Jun 2020 CG Voices

Executive’sExecutive’s InterviewInterview IntegrityIntegrity andand HonestyHonesty isis thethe foundationfoundation NetworkCG toto buildingbuilding corporatecorporate governancegovernance GRC Pilot Project Our collaboration to drive C.P. Corporate Governance Editor’sEditor’s CornerCorner Check out our new-look “CG Voices”, as we update Global real-life events exclusively for our employees NewsNewsGlobal Explore how others managed the COVID-19 Crisis COVID-19 testing the leadership of CEOs worldwide Editor’s Corner

At the time of writing, we are still in the middle of the COVID-19 pandemic affecting and the rest of the world. While approaching our centennial anniversary, today’s issue is how can we pass this challenge together as we enter our next century. To celebrate this issue, we are honored to share the wisdom of our Chief Executive Officer, Mr. Suphachai Chearavanont, on what we can do to demonstrate ourselves as a “good corporate citizen” on our path to long-term sustainability. We always look to give back to our communities by conducting our business ethically, and engaging with our stakeholders, which we have compiled in this newsletter. We are happy to listen to your feedback, as well as hosting giveaways for you to participate from time to time.

Hello, fellow C.P. employees, and welcome to Please don’t forget to our newly revamped “CG Voices” newsletter! wear your mask, While easier on the eyes, our newsletter always wash your hands, aims to be a friendly space for stakeholders to and maintain social distancing! voice their opinions about corporate governance, See you again in the next issue! including for our top executives to communicate with employees, and for C.P. Group employees to learn how to apply best practices based on Rongruja Saicheua real-life events from around the world. Editor All management and staff of C.P. Group must set a good example in order to establish a work standard in the workplace that is in line with our Group Code of Conduct. Everyone should act upon by putting it into practice, as part of our responsibility as a good corporate citizen.

Mr. Suphachai Chearavanont Voice Suphachai Chearavanont, CEO upholds our core values of “Integrity and Honesty” as the foundation of corporate governance in leading our organization to sustainability.

As the globally-accepted driving force for successful business is to be sustainable, Group prioritizes the importance of sustainable business practices in line with the United Nations’ Sustainable Development Goals Framework, which is the Group’s Heart-Health-Home strategy and we place an emphasis on “Corporate Governance”, as the essential component in driving business groups to achieve sustainability in all economic, social and environmental dimensions. Mr. Suphachai Chearavanont With over 350,000 employees in 21 countries worldwide coming Chief Executive Officer from diverse cultural and language backgrounds, corporate governance is especially important to C.P. Group to include a corporate culture of accountability in our business conduct. This issue of “CG Voices” aims to help in communicating our Good corporate citizen with responsibility, ethics and responsibilities as a good corporate citizen, under our belief transparency that every single member within our organization has an important role in driving towards our sustainability goals. The Chief Executive Officer of C.P. Group says although running a successful business is a priority, we cannot neglect our responsibility as a good corporate citizen, by setting the Integrity and Honest; the Foundation in Building standard in good business practices while contributing to the Corporate Governance economy, society and the environment. We must only do business based on good ethics and in line with world-class Mr. Suphachai Chearavanont, the Chief Executive Officer of standards that is beyond the expectation of simply complying Charoen Pokphand Group Company Limited, revealed to with rules and regulation. CG Voices that the Group prioritizes driving business in accordance with corporate governance principles, as it is With regards to good corporate governance in C.P. Group, our crucial not only for the organization but for the nation as well. CEO highlighted that risks must be managed with accountability Our business code of conduct was established from the sixth and transparency in our operations in compliance with the corporate core value, “Integrity and Honesty,” which all executives Group Code of Conduct, to be applied and verified by all Group and employees have been following in a similar manner. companies in the same manner, as well as regularly communicated with stakeholders to establish their confidence and trust in us. “Executives and all employees must act as a good example, establishing a work standard according to our Group Business “Responsibility towards society and conducting business ethically Code of Conduct, and also to put this into practice. Being an should be the basis in all our present and future commitments, ethical company will result in having a successful business, starting from ourselves individually first before extending this which in time will contribute to promoting good business towards people around us.” practices that can benefit our nation and society,” said Mr. Chearavanont. “Responsibility towards our society must genuinely come from inside-out, starting by caring for our 350,000 employees in over 21 countries where we have presence as part of our family, as well as treating our over ten thousand business partners as our extended family.” Mr. Suphachai Chearavanont The Three-circle Principle The Three-circle Principle is our philosophical framework which consists of Social, Economic, and Environment circles that encompasses all our stakeholders. From this, we conduct business responsibly with “love & compassion”, “dream” and “security” as an inspiration to create value by achieving our goals within the three circles ethically on our mutual path to sustainability. Love alues V es / G The Social With “love and compassion” as the root in creating and e valu over tur nm sharing value with society, along with creating a culture in driving ul en C t ethical action in order to establish a sustainable business model. Social The Economic Involves around having a sense of security; businesses requires financial stability, which is equally important to supporting

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n e t Economic Environment r r e S s p The Environment Elevating the quality of life for people, and h r e e n n i n io protecting the environment around us. The essence of this is c p eu at io u & rs ov t “dreaming” and having an innovative mindset to inspire success. r T hip Inn lu m it ale Evo ea y nts Dr

The Three-circle Principle is our framework to honor our stakeholder responsibilities

Leadership during Crisis During the current COVID-19 crisis, Charoen Pokphand Group has announced policies regularly to reassure all our 350,000 employees around the world that the Group will stand with them as we fight through this crisis together, by ensuring the safety and job security of all involved while also satisfying our obligations towards society and economy. Our CEO recognizes that business must be able to work through a crisis, and the most important resource in an organization is its “people”. We do this by keeping the morale of our employees up through a “zero layoff” policy, as job stability directly links to financial security. Furthermore, C.P. Group has made collaborations with society to help fight against the COVID-19 crisis, as we always believe that companies must help the nation during these critical times. As a result, we have carried out several initiatives, such as building a factory for surgical mask distribution free of charge to medical staff, hospitals and the general public; supplying quality food to people under COVID-19 quarantine; delivering medical supplies to 77 hospitals all over Thailand, and building True Virtual World platform to facilitate work and study from home at no expense during the COVID-19 crisis. “Today’s leaders must be agents of change with a sustainability mindset, as well as being outstanding role models and visionaries,” Mr. Chearavanont said. “Crises – The True Test of Leadership” One of the most defining qualities in a leader is integrity. Today’s leaders must also have accountability that serves the creation of shared value with all stakeholders that include employees, business partners, customers, societies, communities, and the environment as the basis of a company’s corporate governance and sustainable growth.

Over the course of running a business, leaders are constantly encountering one crisis after another, and must be able to handle crises using their insights and vision, both short-term and long-term, thereby turning a crisis into an opportunity that benefits the company and society as a whole. Mary Barra, the CEO Leading General Motors Through Crisis

General Motors or GM, the largest automobile producer in the , has halted their vehicle production as a result of the COVID-19 viral outbreak. Mary Barra, the CEO of GM has made the decision to convert factories from automobile production to produce 30,000 ventilators, which are in high demand in the U.S. as the country is entering its critical lockdown stage to control the pandemic, as well as surgical masks, face shields, and Personal Protection Equipment or PPE, prior to President Donald Trump enforcing the Defense Production Act to the rest of the industry.

Mary demonstrated her leadership with accountability to the stakeholders and the society affected by a crisis with prompt decision-making to relieve the situation as quickly and effectively as possible. As a result, Mary has received an honorable mention as one of the world leaders in a special report by Fortune Magazine about Heroes of the Pandemic. Source Forbes :https://www.forbes.com/sites/edgarsten/2020/03/18/gms-barra-offers-to-build-ventilators-in-idled-plants/#28812fb74754 Also, you can access the interview on 60 Minutes on CBS’s website. Cbsnews: https://www.cbsnews.com/news/vehicles-to-ventilators-ford-general-motors-take-on-coronavirus-60-minutes-2020-04-26/ Walmart, and the Wellbeing of Employees during the COVID-19 Crisis.

Walmart, the biggest retailer in the U.S. and a world class company with 1.5 million employed in the U.S. and 2.2 million around the world, has been taking care of its employees’ well-being during the COVID-19 pandemic. John Furner, CEO of Walmart USA, is a leader who cares for the safety and well-being of his employees that are risking their lives to serve customers amid the outbreak by providing personal protection equipment, along with living expense aid to both full-time staff and hourly-paid part-time staff. This also covers employees from Sam’s Club department stores, assistant branch managers of retail subsidiaries within the group, and employees from Walmart’s supply chains, as well as drivers.

Not only did the company create safe working conditions for employees, but also help with living expense by handing out food coupons, paying cash bonus twice, first in April and second in June totaling 755 million dollars, in addition to expediting its first quarter bonus payment for the current fiscal year worth 180 million dollars. This demonstrates the company’s high ethical standards in their work culture and caring for internal stakeholders, which is an important factor in good corporate governance and leading to Walmart’s sustainable growth.

You can access the following website for more information: https://corporate.walmart.com/newsroom/2020/05/12/walmart-repeats-cash-bonuses-for-associates Accountability is the cornerstone of good corporate governance that companies uphold beyond compliance with laws and regulations. It involves doing business with ethics, transparency, and responsibility to society and communities at large.

Unilever’s higher standard of disclosure for their Product Information Unilever, a major consumer goods company known for their products such as Dove soap, Comfort fabric softener, and OMO detergent, has a policy of disclosing fragrance ingredients on the label of their beauty and personal care products, which is higher than the standards stipulated by the law since 2017. Consumers in the U.S. and Europe can verify the ingredients in over 3,000 products on their website. The consumer can use this information to select the quality and safety of the products. This demonstrates Unilever’s accountability to its customers and society that is higher than product control disclosure standards, further increasing consumers’ confidence in their products. If you would like to learn more about Unilever’s disclosures as a consumer, you can access the following website: https://www.unilever.com/news/press-releases/2018/unilever-discloses-fragrance-ingredients-online-for-its-home-care-and-personal-care-brands.html Under the section “What’s in our Products”

BMW only procures raw materials for its electric cars from ethical suppliers BMW, the leading, innovative, well-known and highly-desired German automobile brand, emphasized the importance of responsi- ble material sourcing by joining the Initiative for Responsible Mining Assurance (IRMA), an assurance procedure in procuring materials with an accountability to society and environment that considers the human rights, health and safety of labor. In this Initiative, BMW agrees to ensure that environmental and social standards are adhered to throughout their entire value chain, and that raw material for automobile production must be sourced from suppliers and mining companies that complies with the BMW Group Supplier Code of Conduct and the IRMA, forcing partners in BMW’s supply chain to reevaluate their standards in environment, society, and ethical business conduct.

BMW conducts their business in accordance with corporate governance principles, including social responsibility, environmentally-friendly and sustainability by only sourcing minerals from mines with ethically-responsible practices. For its latest electric vehicle project, BMW used IRMA principles and adopted a policy for purchasing only traceable cobalt and lithium, the two important ingredients used in the production of batteries. Sources of minerals are traceable and monitored under ethical procedure and accountability by complying to environmental, human rights and transparency standards throughout the value chain. You can access the following websites for more information caradvice: https://www.caradvice.com.au/818146/bmw-first-carmaker-to-join-initiative-for-responsible-mining-assurance/ Electrive: https://www.electrive.com/2019/12/11/bmw-buys-540-million-euros-worth-of-lithium-in-australia/ GRC Pilot Project Charoen Pokphand Group understands the upcoming trends in “Governance” and “Compliance”, which are sweeping through businesses around the world and in Thailand. In realizing of this, the Group has initiated a new GRC pilot project that combines three elements of “Governance”, “Risk” and “Compliance” to foster more effective management. This project not only demonstrates the company’s good corporate governance, but also creates a competitive advantage for the company in the long-run. This Pilot project was presented by Mrs. Patsharee Congtrakultien, Chief Compliance Officer from the Corporate Compliance Office and Mrs. Rongruja Saicheua, Senior Vice President of Corporate Governance, from the Sustainability, Good Governance and Corporate Communications Office to executives from Chia Tai Group, with Mr. Manas Chiaravanond, CEO, as the chairperson of the meeting and committed to implement this project.

“Group Collaboration in Driving of Corporate Governance” In the second quarter of 2020, the Corporate Governance Department of the Sustainability, Good Governance and Corporate Communications Office, has organized monthly online conference meetings for subsidiaries to collectively brainstorm and plan recurring activities for the promotion of good corporate governance throughout the Group. Participating members gained invaluable insights and experiences shared by listed companies in topics such as “Corporate Governance Conduct” by , Plc; “Corporate Governance Structures and communications” by CPALL, Plc; and “Conflicts of Interests Disclosure Practices” by Siam Makro, Plc. Moreover, non-listed companies also shared their real-life cases for all participants to adapt and apply within their business group. CGPLAY Crossword Down Across 1 Comes with our responsibilities, 3 This foundation for sustainable and is expected from all development is not a written social professionals of good standing rule, but all companies must have. 2 This D-Letter word is all about 4 This is what followers crave, being different and unique, which leaders need. is in the interest of society today. 5 A basis of trust, that everyone can see through.

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