22-04-2025
Applying blanket standard narrows pool of director candidates: Keppel DC Reit manager
We refer to the BT article 'Keppel DC Reit lead independent director Kenny Kwan fails to get re-elected at AGM', published on Apr 18, 2025.
Kenny Kwan received 49.93 per cent of the votes, just 0.07 per cent short of the 50 per cent majority required for his re-endorsement. We understand that an important reason for this outcome is the recommendation by a proxy adviser made prior to the annual general meeting relating to Kwan's re-endorsement, based on their classification of Kwan as a non-independent director. This stems from Keppel DC Reit's disclosure that A&O Shearman, the law firm where Kwan is a partner, is one of the law firms providing legal services to Keppel.
The board holds the view that Kwan can be regarded as an independent director because he does not hold a substantial partnership interest in A&O Shearman; A&O Shearman has not been engaged by Keppel DC Reit or the manager to provide any legal services since Kwan joined as a partner; and Kwan is not employed by Keppel or any of its entities.
In addition, Kwan's relationship with Keppel has been fully disclosed in Keppel DC Reit's annual report, in line with best practices for corporate governance and transparency.
Keppel DC Reit adheres to the framework set out in the Code of Corporate Governance as well as the Securities and Futures (Licensing and Conduct of Business) Regulations when evaluating independence. The rationale and consideration of the board for determining Kwan's independence is set forth in detail in the annual report.
While Keppel DC Reit respects the outcome of the vote, we believe it is important to evaluate independence in context, especially within the framework of Singapore's regulatory guidelines.
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In a market where major law firms naturally serve large companies, such as Keppel, applying a blanket standard could significantly narrow the pool of qualified candidates. Such an approach may unintentionally limit board diversity and expertise, particularly among professionals with highly relevant skill sets.
Kwan brought to the board of Keppel DC Reit two decades of legal and capital markets experience, with deep expertise in real estate investment structures, cross-border transactions and regulatory compliance.
His expertise was extremely valuable to Keppel DC Reit in navigating complex transactions, enhancing compliance and strengthening investor protection. Kwan's insights contributed greatly to board deliberations, and to ensuring that management decisions are both commercially sound and legally robust. We also wish to highlight that Kwan's election resolutions in 2019 and 2022 were passed even though the underlying circumstances were materially unchanged.
On behalf of the board and management of Keppel DC Reit, I would like to extend our appreciation to Kwan for his strategic guidance and invaluable contributions to Keppel DC Reit as lead independent director and chairman of the nominating and remuneration committee. The board and management remain committed to upholding high standards of corporate governance and transparency, as well as delivering strong returns to unitholders.
Christina Tan, chairman of Keppel DC Reit Management, manager of Keppel DC Reit
