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 receive corporate governance 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 2023
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 2023
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’ Accountabilities towards 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 of C.P. Group. In addition, in 2023, Dr. Teerapon Tanomsakyut was appointed Chief Sustainability and Strategic Development Officer to assist in management and oversee the implementation of sustainability policies and actions at the group-wide level. 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 executive board reviews the performance of executives, then the Board of Directors, respectively, to ensure transparency and the evaluation and remuneration process. This approval hierarchy is similar to the reporting line of other 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
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. Additionally, C.P. Group has a robust internal audit process to ensure the strict implementation of its risk management program. This internal audit process regularly reviews and monitors compliance with established risk management policies, identifies areas for improvement, and ensures that corrective actions are taken promptly to mitigate any potential risks.
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. The Group has thus incorporated risk management issues as one of the criteria for employee performance evaluations.
Risk Training
Charoen Pokphand Group regularly organizes risk training courses for executives and workers to instill precise understanding and application, hence preventing noncompliance with applicable government and Group laws, rules, and regulations.
- Risk Control Effectiveness Course: The course was designed for executives and department that are responsible for the risk management of business groups. It was aimed to create executive and employees’ understanding of risk control measures and be able to apply the guidelines and methods to monitor, measure, and assess the risk management measures of the business.
- Risk Management Framework and Enterprise Risk Assessment: The course was designed for various departments to create awareness of risk management and understanding of roles and responsibilities in governing enterprise risk management. The training program includes Risk Control Efficiency, organized for executives and departments in charge of business group risk management to create an understanding about risk control measures for executives and employees.
Analysis of Emerging Risks
Charoen Pokphand Group recognizes the importance of effective enterprise risk management as the foundation for sustainable operations. The Group has adopted a comprehensive risk analysis approach, considering various perspectives, including issues related to all Group businesses, suppliers, and stakeholder groups. Additionally, impacts are analyzed over different time periods to assess the potential risk levels and to determine appropriate mitigation measures.
Risk Category: Environmental
Risk Description:
Biodiversity loss and ecosystem collapse pose significant risks to C.P. Group due to their broad impacts on sustainability and human well-being. Our operations in agriculture, aquaculture, and food production depend on healthy ecosystems. Degraded biodiversity disrupts natural systems, reducing agricultural productivity and threatening food security for communities relying on our products. putting essential resources like clean water and fertile soil at risk.
Ecosystem collapse destabilizes supply chains, making crops and livestock more vulnerable to pests, diseases, and climate extremes, increasing costs and supply shortages. Biodiversity loss also affects human health through reduced ecosystem services like air and water purification, pollination, and climate regulation.
Protecting biodiversity ensures a sustainable planet for future generations and supports equitable access to natural resources, a fundamental human right. Ecosystem degradation disproportionately impacts marginalized communities, worsening social inequalities. Addressing these risks is crucial for C.P. Group’s business continuity and social responsibility.
Risk Impact:
Changes in biodiversity and ecosystem integrity can directly affect the availability of raw materials, water resources, pollination services, and the overall flexibility of the supply chain. Furthermore, biodiversity loss and ecosystem collapse also pose regulatory, reputational, and market access risks for Charoen Pokphand Group.
Social expectations and stakeholder demands also play a key role. Consumers, investors, and civil society organization are focusing more on companies that demonstrate environmental responsibility, biodiversity conservation, and sustainable business operations.
Mitigating Actions:
Charoen Pokphand Group has established comprehensive mitigation measures to manage risks associated with biodiversity loss and ecosystem collapse. This includes prioritizing sustainable sourcing practices of, for example, agricultural products and seafood, promoting aquaculture, ensuring responsible forest management and investing in biodiversity conservation initiatives. The Group also conducts rigorous environmental impact assessments to assess potential impacts on biodiversity and ecosystems, engages with stakeholders to promote collaborative work and decision-making and invests in research and innovation for sustainable technologies and practices. Moreover, the Group strictly complies with environmental laws and regulations while actively supporting biodiversity-friendly agriculture and aquaculture. These endeavors are a demonstration of the Group’s commitment to biodiversity and ecosystem protection as well as our determination to make positive contributions to environmental sustainability and conservation efforts.
Risk Category: Societal
Risk Description:
Non-compliance with sustainability requirements in the supply chain poses a significant risk to Charoen Pokphand Group (C.P. Group). As a global conglomerate with extensive operations in agriculture, aquaculture, and food production, our supply chain involves numerous stakeholders, including suppliers, contractors, and partners across various regions. Failure to adhere to sustainability, especially ethical standards, such as labor rights, environmental regulations, and fair trade practices, can have severe implications for our business.
This risk can lead to legal penalties, reputational damage, and loss of consumer trust, all of which can negatively impact our brand and market position. Breaches related to sustainability in the supply chain, such as the use of child labor, unsafe working conditions, or environmental violations, can disrupt operations and lead to financial losses. Moreover, non-compliance with standards can result in supply chain inefficiencies, increased costs, and strained relationships with stakeholders, including investors and customers who prioritize corporate responsibility.
Risk Impact:
Non-compliance with sustainability requirements in the supply chain significantly impacts C.P. Group. It can lead to costly legal penalties and fines. Reputational damage, especially from human rights violations, erodes consumer trust and tarnishes our brand, affecting market positioning. Financial losses from operational delays, increased costs, and supply chain disruptions impact profitability and business continuity. These disruptions can terminate supplier relationships and challenge sourcing. Breaches related to sustainability strain stakeholder relationships with investors, customers, and partners who value corporate responsibility. Increased scrutiny from regulatory bodies and NGOs demands more rigorous oversight. Market opportunities may be lost as consumers prefer ethically responsible companies. Human rights violations, like child labor, have severe social implications. Non-compliance also affects employee morale and retention. Addressing these impacts requires robust ethical practices, continuous monitoring, and proactive stakeholder engagement.
Mitigating Actions:
Charoen Pokphand Group must employ diverse strategies to minimize the risk of non-compliance with sustainability requirements in the supply chain. This includes implementing the Supplier Code of Conduct, establishing procurement contract guidelines, conducting thorough due diligence on suppliers, and imposing punishment on suppliers with evaluation results below the specified criteria or found to have violated requirements. In addition, the Group has initiated traceability and transparency using technology such as blockchain and supply chain management systems, and many more. This technology has helped the Group to accurately track and monitor suppliers’ activities.
Risk Category: Technological
Risk Description:
The rapid advancement of artificial intelligence (AI) and automation technologies presents a significant emerging risk to C.P. Group. While technologies offer opportunities for improved efficiency and innovation, they also pose challenges in several way, including potential job displacement, ethical concerns, and the need for significant investment in new skills and infrastructure. The integration of AI and automation could disrupt traditional business models, supply chains, and labor markets, requiring the Group to adapt swiftly to maintain competitiveness and social responsibility.
Risk Impact:
There are several impacts of disruption from integration of AI and automation on C.P. Group. For instance, job displacement is a major concern as automation takes over tasks traditionally performed by human worker. This can affect employee morale and necessitate extensive retraining and redeployment programs. Furthermore, the rapid demand for new skills related to AI and automation may outpace the supply of qualified workers, creating skill gaps that could hinder the Group's ability to fully leverage these technologies. The integration of AI and automation will also necessitate substantial changes to operational processes, requiring significant investment in new systems, infrastructure, and training programs. Ethical and compliance issues could also arise, particularly around the use of AI in decision-making processes, which might raise concerns about bias, transparency, and accountability.
Mitigating Actions:
To address the risks associated with disruption from integration of AI and automation, the Group has already implemented comprehensive training programs to reskill and upskill employees, preparing them for new roles created by AI and automation. These programs include partnerships with educational institutions and training providers to develop relevant curricula. The Group is also focusing on promoting ethical AI practices by adhering to strict guidelines that ensure transparency, fairness, and accountability in the use of AI technologies. Regular reviews and updates of these guidelines are conducted to keep pace with technological advancements. Moreover, the Group actively engages with employees on the benefits and challenges of AI and automation. This engagement fosters an open dialogue to address concerns and build confidence. In terms of strategic investments, the Group allocates resources for the implementation of AI and automation technologies in areas where they can deliver the most value, while promoting career development for our employees, ensuring these investments align with the Group's long-term goals and sustainability commitments.
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 2023
| 2023 | Management Measure | ||||||
|---|---|---|---|---|---|---|---|
| No. of Cases | Under Investigation | Completed | Verbal Warning | Written Warning | Suspension | Dismissal | |
| Complaints Related to Ethics and Morality (case) | |||||||
| Fraud | 2 | - | 2 | - | - | 1 | 1 |
| Conflict of interest | 2 | - | 2 | - | 1 | - | 1 |
| Non-compliance | 5 | - | 5 | 5 | - | - | - |
| Discrimination | 3 | - | 3 | 3 | - | - | - |
| Harassment | 3 | - | 3 | 2 | - | - | 1 |
| Corruption | 1 | - | 1 | - | 1 | - | - |
| Insider Trading | - | - | - | - | - | - | - |
| Anti-competitive Behavior | - | - | - | - | - | - | - |
| Complaints Related to Anti-Competitive Behaviors (case) | |||||||
| Violation of Customer Personal Data | - | - | - | - | - | - | - |
| Total (Case) | 16 | 0 | 16 | 10 | 2 | 1 | 3 |
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
