SD Governance Structure and Policies

SD Governance Structure and Policies

CNCo strongly believes that it is imperative to act with probity, transparency and accountability to achieve our long-term objectives. We developed the 2030 Sustainability Strategy aligned with CNCoTHRIVE to have a pathway on where we want to be in ten years' time.

The parent company's Board of Directors is the highest-level governance and oversight body and sets the strategy for its subsidiary companies. The Chairman of the Board of Directors is Mr. S. C. Swire.

The CNCo Board of Directors at 31^st December 2019 comprised eight members, of whom four were Independent Executive Directors.

CNCo's governance structure below the Board level is represented by the CNCo Executive Leadership Team (ELT) which is comprised of

• Managing Director
• Commercial Director
• Finance Director
• General Manager, Swire Shipping
• General Manager, Swire Bulk
• Fleet Director
• Global Head of Human Resources (HR)
• Global Head of Procurement

The ELT meets on an ad hoc basis and makes strategic decisions that support the long-term sustainability of our operations. They are directly supported by the Functional Leadership Team.

The General Manager – Sustainable Development (GM SD) reports directly to the Managing Director and reports to the Board biannually, allowing him to provide SD input at a strategic level, and at an early stage of any new project deliberation and planning. The GM SD is also consulted on the sustainability of specific commodities prior to entering into Contracts of Affreightment with charters. The GM SD provides the ELT with strategic updates and seeks approvals when necessary.

CNCo's SD Report is reviewed by the Managing Director prior to publication to ensure accuracy and inclusion of all material issues.

The shareholders are directly represented on the CNCo Board of Directors and use this platform to provide governance direction.

While CNCo has no direct public shareholders, it manages and operates all its businesses in compliance with both the John Swire and Sons (UK)'s, and CNCo's Corporate Code of Conduct.

CNCo's leadership teams regularly review the operating practices and the Enterprise Risk Management framework that ensures:

• satisfactory and sustainable returns to its parent company;
• the interests of stakeholders are safeguarded;
• overall short and long-term business risk is understood and managed appropriately;
• the delivery of high-quality services; and
• the highest standards of ethics are maintained by our employees in all dealings.

We have in place policies, guidelines and procedures that comprise our organisational governance suite. All policies are updated as required (for cause and / or annually), and then reviewed and approved by CNCo ELT before publishing. Our policies are available on the Company's website under the Sustainable Development tab and include inter alia SD Policy, Environmental Policy, Responsible Cargo Carriage Policy, Sustainable Procurement Policy and Supplier Code of Conduct.

In 2019 CNCo's Business Excellence team started work on scoping, designing and digitising policies, guidelines and standard operating procedures to deliver a web-based Corporate Governance System (CGS). CGS will act as a single source of truth that will help develop behaviours to deliver an optimised process-driven and compliant culture – doing things in a standard way, consistently always variations and exceptions to the way we operate our business.

The Designated Person Ashore ("DPA") is an internationally legally required position under the International Maritime Organisation ("IMO") International Ship Management ("ISM") Code, which provides an international standard for the safe management and operation of ships and for the prevention of pollution. The DPA role was instituted in the global marine industry to ensure that one named person has direct access to the highest level of management in the event that a more junior line manager is felt to be blocking resolution of a safety-related issue. This legal responsibility and authority of the DPA includes monitoring the safety and pollution prevention aspects of the operation of each ship and ensuring that adequate resources and shore-based support are utilised.

CNCo is involved with the various thematic working groups at the Swire group level, and is also part of the Group's Sustainability Committee, responsible for setting targets and sharing best practices among the private and public companies of the Swire group.

CNCO's Corporate Philanthropic Committee meets on an ad hoc basis and reviews / approves requests for community investment or CP sponsorships. Our CP donations focus largely on:

• Provision of Educational and / or Health Opportunities for Youth; and / or
• Enhancing the Company's presence in our Stakeholder Communities; and / or
• Environmentally / Biodiversity Sustainability issues;

while as best possible simultaneously:

• Demonstrating a strategic fit with CNCo's business;
• Fostering or enhancing a Corporate Partnership with CNCo (rather than being disconnected philanthropy) – i.e. be Business Critical Community Engagement ("BCCE");
• Involve a Long-Term Partnership;
• Be Responsive to Community Needs;
• Normally avoid "One-Offs";
• Involve fewer but larger sums, rather than many small donations, as these have a bigger impact multiplier.

We have in place a formal Whistleblowing Policy through which concerns on potential governance, social or environmental issues can be fed back quickly, and anonymously if required, to a senior member of the management team. Reporting of material concerns is formally tracked and addressed. The policy and the process can be found on CNCo's website.