Corporate Governance
Goal and Performance
A solid corporate governance foundation can help Charoen Pokphand Group realize our business strategy and commitment to creating long-term value for the country where we operate, the people, and our workers. As a result, the Group required all business units to carefully adhere to all applicable laws, rules, and regulations and the Group's standards.
All businesses implement a corporate governance impact scoring assessment.
Supporting the SDGs
Charoen Pokphand Group's corporate governance actions support the achievement of two Sustainable Development Goals
More Details on Sustainable Development Goals Report 2022
Stakeholders Directly Impacted
Charoen Pokphand Group performs stakeholder assessment and prioritization process on an annual basis to evaluate impacts we have on them and how can they influence our strategies and actions over time. In 2022, the evaluation results showed that our works in corporate governance directly create impacts on all 11 stakeholder groups.
More Details on Stakeholder Engagement Report 2022
Our Impact by the Numbers
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Code of Conduct
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Conflicts of Interest Policy and Guidelines
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Anti-Bribery and Anti-Corruption Policy and Guidelines
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Gifts and Benefits Policy and Guidelines
Governance Management Approach
Charoen Pokphand Group upholds the principles of corporate governance in conducting our business. We also treat all stakeholders equally. Throughout the past century, the Group has operated with transparency through the corporate governance principles which have been seamlessly merged into our business operations.
The Board of Directors governs the Group in accordance with the principles of corporate governance to ensure respect of stakeholder rights as well as control and manage risks to achieve maximum business efficiency. These endeavors contribute to adding value and creating sustainable growth for the country, the society, and Charoen Pokphand Group.
Charoen Pokphand Group has defined a work process to tangibly drive corporate governance operations, such as collaborating with representatives from affiliated companies to ensure a common operational approach and compliance with Group policies and guidelines. The Group’s corporate governance mechanisms consist of corporate governance structure development, work process creation, communication and engagement, monitoring and reporting, and disclosure.
Executives’ Responsibilities and Accountabilities toward Sustainable development
Charoen Pokphand Group’s Board of Directors approved the establishment of the Sustainability Committee, which is chaired by Mr. Suphachai Chearavanont, the Chief Executive Officer, and Chief Sustainability Officer of C.P. Group. The roles and responsibilities of the Sustainability Committee included supervising and formulating policies and sustainability goals to create maximum benefit for stakeholders, determining sustainability strategies and guidelines, driving sustainability implementation, and managing and monitoring sustainability performances across the Group. To ensure that Sustainability Frameworks and Goals are being systematically executed across the Group, the implementation of all 15 goals of Charoen Pokphand Group’s 2030 Sustainability Frameworks and Goals has been incorporated as one of the indicators for the performance evaluation of executives according to their scope of responsibility. The result of the evaluation will be reflected in their annual remunerations. The performance of executives is reviewed by the executive board, then the Board of Directors, respectively, to ensure transparency or the evaluation and remuneration process. This approval hierarchy is the same as the reporting line of sustainability activities. For more information on Sustainability Structure, please visit Sustainability Governance
| Sustainability Frameworks and Goals | Accountability | ||||
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| Group CEO | CSO | Director of Sustainable Development | Executives / BU Managers | Employees | |
| Corporate Governance |
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| Human Rights and Labor Practices |
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| Education and Inequality Reduction |
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| Leadership and Human Capital Development |
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| Cybersecurity and Data Protection |
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| Health and Well-being |
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| Social Impact and Economic Contribution |
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| Food Security and Access to Nutrition |
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| Innovation |
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| Stakeholder Engagement |
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| Climate Resilience |
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| Circular Economy |
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| Water Stewardship |
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| Ecosystem and Biodiversity Protection |
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| Responsible Supply Chain Management |
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Risk Management Approach
Charoen Pokphand Group commits to enhancing risk management efficiency by adopting the Integrated Governance, Risk Management and Compliance (Integrated GRC) approach. Furthermore, the Group has also developed a corporate risk management system based on the international standards of the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to ensure the Group’s improvement and resilience in managing risks in response to the needs of the changing business environment.
Risk Management Culture
To enable Charoen Pokphand Group’s stable and sustainable growth amidst business uncertainties, the Group places importance in reinforcing a risk management culture across the organization by establishing and implementing risk management policies and guidelines throughout the Group, reviewing risk management structure to define roles and responsibilities more clearly, communicating and offering trainings related to risks, and sharing knowledge in risk management.
The Charoen Pokphand Group aims to ensure that all levels of employees are attentive to their daily tasks and are aware of the Group's risk management rules. Risk management parameters have been incorporated into the employees’ performance evaluation form.
Risk Training
In 2022, Charoen Pokphand Group organized training courses for executives and employees from business groups related to risk management as follows:
- Risk Control Effectiveness Course: The course was designed for executives and departments that are responsible for the risk management of business groups. It was aimed to create executive and employees’ understanding of the risk control measures and be able to apply the guidelines and methods to monitor, measure, and assess the risk management measures of the business.
- Enterprise Risk Assessment Course: The course was designed for executives and employees of the business group. The course objectives were designed to create an understanding of the standardized risk management practices of the organization and encouraged executives and employees to apply such management guidelines to identify and assess the risks involved in being part of the decision-making strategy, plans, and operations in various areas of the business.
Analysis of Emerging Risks
Charoen Pokphand Group has appointed the Corporate Governance, Risk and Audit Steering Committee to supervise overall risk management, analyze internal and external business environment as well as global economic, social, environmental, political, and technological trends to assess key risk factors/trends and consider the formulation of appropriate mitigation measures for such key risks. In 2022, the analysis of emerging risk factors that may cause widespread impact on the Group and relevant industries within the next 3-5 years include, biodiversity loss, elimination of non-compostable plastic use, and technological development impacting the environmental and societal health.
Risk Category: Environmental
Risk Description:
International research indicates that over the past years, climate change and human activities have put more than 1 million species worldwide at risk of extinction. The extinction of one species can inevitably affect others and increase the likelihood of new epidemic outbreaks in the future. This poses risks in terms of shortage of resources essential to the livelihood of all living things, the well-being of the global population, and business growth of many industries, especially Charoen Pokphand Group whose core business comprises agro-industry and food.
Risk Impact:
Potential risks from biodiversity loss include reduced agricultural output due to poor soil quality, insufficiency of clean water, an increasing number of plant diseases, and lack of access to quality raw materials and materials of the future due to epidemics or international conflicts. As a result, there is a risk of a significant decline in upstream production capacity, increased global demands, and permanent or temporary disruption of transportation. Such risks affect the food security system in the form of production process disruption, lack of high-quality essential food and beverages, rising food and beverage prices, and more.
Mitigating Actions:
As a management measure for potential risks from biodiversity loss, Charoen Pokphand Group implements the Ecosystem and Biodiversity Protection Policy and encourages all relevant business groups and suppliers to adopt the Policy as a guideline for protecting, caring for, maintaining, and restoring biodiversity. The Group has also announced the following goals related to biodiversity protection and restoration:
- By 2025, plant 20 million trees;
- By 2030, 100% of raw material sourcing must proceed from sources that do not involve forest encroachment and deforestation;
- By 2030, all business groups conduct projects or collaborate with relevant national and international partners on biodiversity management and monitoring
Additionally, the Group has formulated the Sustainable Sourcing Policy to expand the scope of natural resource protection, especially biodiversity. The Sustainable Sourcing Policy focuses on the responsible procurement of agricultural and marine raw materials to ensure that they do not proceed from the encroachment of protected areas or are associated with agricultural deforestation. Furthermore, the Group also implements a high-risk raw material traceability system to assure suppliers that our production and raw material procurement processes are in strict accordance with requirements, international laws, and Group policies.
Risk Category: Societal
Risk Description:
Non-compostable plastics pose a multidimensional threat to our environment and civilization due to their pervasiveness, ineffective waste management, and potential for extensive ecological impact. These plastics, which are resistant to natural breakdown processes, have sparked widespread concern due to their negative effects on ecosystems, human health, and resource sustainability.
Risk Impact:
This trend of alternative plastic demand poses both risks and opportunities for Charoen Pokphand Group’s operations, especially in terms of the ability to procure good quality alternative plastic that is resistant to various environments, capable of maintaining product freshness and cleanliness, and safe for consumers. In addition, rising operating costs are another risk factor for the Group due to alternative plastic prices which are higher than conventional plastic as well as expenses related to the improvement of production processes to accommodate new plastic materials. However, if the Group does not plan to switch to alternative plastic, we will face risks in terms of reputation, stakeholder trust, and loss of domestic and international trade opportunities.
Mitigating Actions:
Charoen Pokphand Group has established a policy to promote and support the implementation of a circular economy to increase efficiency and reduce dependency on natural resources. We have also announced relevant goals including:
- By 2030, all plastic packaging used will be recyclable, reusable, and compostable.
To achieve plastic packaging goals, the Group has established the Sustainable Plastic Packaging Guidelines which focus on eliminating the use of non-recyclable plastics and seeking alternative or natural materials; promoting investment in research and development of socially and environmentally responsible product distribution innovations, safe food packaging innovations for consumers; supporting and endorsing the EPR principles (Extended Producer Responsibility) to extend the producer’s scope of responsibility as well as the network of joint responsibility for managing and recycling post-consumer packaging waste; analyzing product life cycle to assess potential and identify improvement opportunities; supporting and cooperating with all sectors to determine eco-design standards for packaging; and focusing on the elimination of plastic waste across the value chain.
Risk Category: Technological
Risk Description:
The rapid pace of technological innovation has brought many benefits, but it also poses considerable hazards to the environment and societal well-being. While innovation improves our abilities and quality of life, it can also have unforeseen effects on ecosystems, public health, and social dynamics. Ecological disruption is a common concern since technological advancement frequently entails resource extraction and ecological modification, resulting in habitat destruction and pollution. Moreover, technological progress can inadvertently exacerbate social inequalities through the digital divide, limiting access to vital tools and information for marginalized communities. Privacy and surveillance concerns arise with the enhanced capabilities of data collection, potentially infringing on personal freedoms. Health impacts, including those from electromagnetic fields and automation-driven unemployment, further underscore the intricate relationship between technology and societal well-being. E-waste and ethical dilemmas surrounding technology's responsible use also demand attention, highlighting the importance of sustainable design, stringent regulations, and ethical guidelines.
Risk Impact:
Charoen Pokphand Group could face consequences from environmental and societal concerns linked with technology advancement due to its different types of business operations. To begin with, C.P. Group's operations may be affected due to increasing manufacturing and production expenses, which have a direct influence on operational efficiency and profitability. Second, the Group's reputation may suffer if it fails to address good management measures for environmental and societal concerns linked with technological progress. Finally, technological innovation supports tougher norms and standards for environmental and societal protection, so the Group may face legal challenges and penalties if its technological practices do not line with growing regulatory requirements.
Mitigating Actions:
C.P. Group has adopted sustainable practices across corporate operations, such as the use of eco-friendly and resource-efficient technology, to reduce the effects of technological growth on the environment and society. The Group invests heavily in R&D to create long-term solutions that can help reduce energy use, resource exploitation, and trash generation. Furthermore, the Group actively communicates with all stakeholder groups to understand their worries and expectations about the impact of technology. Transparent communication to manage environmental and societal concerns contributes to the Group's and stakeholders' trust and goodwill. Advocating for regulations that encourage responsible technological development inside the sector can also help to shape a more sustainable and socially conscious technological landscape.
Compliance
Charoen Pokphand Group has defined operational and behavioral guidelines in the Charoen Pokphand Group Code of Conduct which has been submitted to directors, executives, and employees at all levels for their acknowledgement, understanding, and adherence as guidelines in performing their duties.
Code of Conduct
The process to Identify Risk from Non-compliance
Compliance Risk Profiling: The assessment of both the likelihood and severity of non-compliance. The assessment is carried out at least once a year, or when significant changes occur, in order to prioritize compliance and determine appropriate control measures.
Compliance Training
The appropriate type of communication is selected based on the target audience, content, and objectives according to the established communication and training plan. Additionally, consulting channels are provided for clarification of any queries. The issues in question will be used to further improve communications.
Employee Engagement in Compliance Development The Group has used the survey results of employees’ acknowledgment of corporate governance and compliance to develop operational processes as well as training and communications. The Group used the survey results to plan for the improvement of employee acknowledgment, as follows:
- Awareness Development in compliance operations
- Awareness Development in whistleblowing and complaints
- Awareness Development in Accessing the Code of Conduct, policies, guidelines, and regulations.
Complaints and Whistleblowing
Charoen Pokphand Group has established the Whistleblowing Policy and Guidelines to accept opinions, recommendations, and complaints from both internal and external parties who have been affected or are likely to be affected by the Group’s business operations. Furthermore, to demonstrate clear, honest, and transparent practices, the Group has determined guidelines that are consistent with international standards regarding the roles and responsibilities of concerned parties, whistleblower/complainant protection measures, investigation process, and penalties. Moreover, the Group also integrates the guidelines stated in the Code of Conduct, other relevant policies and guidelines, as well as those set forth in the applicable laws, rules and regulations into employee performance evaluation criteria. The result of the compliance is not only linked to employees' annual remuneration but also career promotion opportunities.
Number of Complaints Relating to Employee Misconduct and Management Measures in 2022
| 2022 | Management Measure | |||||||
|---|---|---|---|---|---|---|---|---|
| No. of Cases | Under Investigation | Substantiated Case | Non-substantiated Case | Verbal Warning | Written Warning | Suspension | Dismissal | |
| Complaints Related to Ethics and Morality (case) | ||||||||
| Fraud | 3 | 2 | - | 1 | - | - | - | - |
| Conflict of interest | 5 | 3 | - | 2 | - | - | - | - |
| Non-compliance | 7 | - | 5 | 2 | 3 | 2 | - | - |
| Discrimination | - | - | - | - | - | - | - | - |
| Harassment | 1 | - | 1 | - | 1 | - | - | - |
| Corruption | 1 | - | 1 | - | - | - | - | 1 |
| Insider Trading | - | - | - | - | - | - | - | - |
| Anti-competitive Behavior | - | - | - | - | - | - | - | - |
| Complaints Related to Anti-Competitive Behaviors (case) | ||||||||
| Violation of Customer Personal Data | - | - | - | - | - | - | - | - |
| Total (Case) | 17 | 5 | 7 | 5 | 4 | 2 | - | 1 |
Remark: The number of complaints shown in the table are the numbers received through Charoen Pokphand Group’s website: https://grc.cpgroupsustainability.com
Details on violation of the Code of Conduct and ethics
