Speaker:Speaker: Mr. C.K. CHOMr. C.K. CHOBarrister,Barrister,

LLB ( Hons.) London ,CFE, DMS, MIMC, MCMI, MIoDLLB ( Hons.) London ,CFE, DMS, MIMC, MCMI, MIoD

ViceVice--President, Hong Kong President, Hong Kong Chapter, The Association of Fraud Chapter, The Association of Fraud ExaminersExaminersFormer Head of Legal Research Former Head of Legal Research and Management Unit, Operations and Management Unit, Operations Department, ICACDepartment, ICACMaster Trainer , Academy of Master Trainer , Academy of Management ConsultancyManagement Consultancy

DISCLAIMERDISCLAIMER

Not a substitute for legal adviceNot a substitute for legal advice

For educational purposes onlyFor educational purposes only

Any views expressed are my own opinionAny views expressed are my own opinion

CORPORATE CORPORATE GOVERNANCE MANUALGOVERNANCE MANUAL

3RD EDITION3RD EDITIONAPRIL 2005APRIL 2005

EXTRACT FROM WEBSITE OF KCRCEXTRACT FROM WEBSITE OF KCRC

MISSIONMISSION

To provide a To provide a safe ,safe ,reliable , reliable , profitable and integrated railway networkprofitable and integrated railway networkmeeting the increasing demand for meeting the increasing demand for territorial, crossterritorial, cross--boundary and intercity boundary and intercity railway servicesrailway services

Corporation to find better ways to:Corporation to find better ways to:

(a)(a) serve customers and meet performance serve customers and meet performance pledgespledges

(b)(b) fulfill both Government and corporate fulfill both Government and corporate objectivesobjectives

(c)(c) Maintain financial strengthMaintain financial strength(d)(d) Develop sound business partnershipsDevelop sound business partnerships(e)(e) Build teamwork and commitment in staffBuild teamwork and commitment in staff; ;

andand(f)(f) Encourage initiative and reward successEncourage initiative and reward success

CORPORATE VISIONCORPORATE VISION

To be a world leader in providing quality To be a world leader in providing quality transport services on the basis of prudent transport services on the basis of prudent commercial principlescommercial principles

CORE VALUESCORE VALUES

Keep customers firstKeep customers first

Continue improvingContinue improving

Respect and trustRespect and trust

Communicate effectivelyCommunicate effectively

ROLE OF THE CHAIRMANROLE OF THE CHAIRMAN

Responsible for the conduct of the Responsible for the conduct of the Business of the Managing BoardBusiness of the Managing Board(Source: Para. 211 of Corporate (Source: Para. 211 of Corporate Governance Manual)Governance Manual)

RULES FOR CONDUCT OF RULES FOR CONDUCT OF CORPORATION BUSINESSCORPORATION BUSINESS

Para. 241 (a) to (r) set out those matters which will in all Para. 241 (a) to (r) set out those matters which will in all cases be referred to the Managing Board for its cases be referred to the Managing Board for its consideration and approval, consideration and approval, together with any further together with any further items which the Board may from time to time decide.items which the Board may from time to time decide.Examples:Examples:Annual budgetAnnual budgetPassenger fares and freight chargesPassenger fares and freight chargesContracts in excess of HK$50 millionContracts in excess of HK$50 millionConsultancy contracts in excess of HK$10 millionConsultancy contracts in excess of HK$10 million

Para. 242 of the Corporate Para. 242 of the Corporate Governance ManualGovernance Manual

Management must report to the Board Management must report to the Board each montheach month on on

significant developments, together with the significant developments, together with the operating and financial results, operating and financial results, information on use of the Corporate Seal, information on use of the Corporate Seal, letting of major contracts, letting of major contracts, accidents, service disruptionsaccidents, service disruptions,,Public complaints and any other matters Public complaints and any other matters which may be required by the Board from which may be required by the Board from time to timetime to time

Para. 243 of Corporate Para. 243 of Corporate Governance ManualGovernance Manual

All other authorities to carry out All other authorities to carry out Corporation activities are delegated to the Corporation activities are delegated to the Chief Executive OfficerChief Executive Officer