Manulife US REIT-Sustainability Report 2019

Corporate governance is the system by which companies are directed and controlled. It is intended to increase MUST’s accountability to various stakeholders. Good corporate governance within MUST will thus allow us to avoid any potential detrimental breaches before they occur. Regulatory Compliance Due to REITs operating in a highly regulated sector, the Board of Directors and management have to work together to safeguard the interests of Unitholders by ensuring compliance with local and foreign laws and regulations. Any form of non-compliance, breaches in regulations or corruption linked back to MUST will result in financial penalties and severely damage our reputation and stakeholder trust. Being listed on SGX-ST and regulated by the Monetary Authority of Singapore, MUST and its Manager are required to comply with a range of rules and regulations. Specific policies and procedures are also instituted (as shown on page 87 to 88) to ensure that MUST complies with the various regulatory and operational requirements. The Manager, as a subsidiary of Manulife Group, is also subjected to certain Group-wide policies and procedures. MUST’s Sponsor is a Securities and Exchange Commission registered company and the Manager aligns its corporate governance to the high standards expected of MUST’s Sponsor. The Manager’s compliance team works closely with the Sponsor’s legal and compliance teams plus appointed external legal counsel in Singapore and the U.S., to ensure that MUST and the Manager operate within their regulatory ambit. Details on corporate governance can be found on page 92 of MUST’s 2019 Annual Report. As of 31 December 2019, nine out of 16 full-time employees of the Manager are holders of the Capital Markets Services (CMS) licence under the Securities and Futures Act (SFA) of Singapore, out of which seven have at least five years of experience relating to trust management. The CMS licence holders are responsible for functions ranging from management, investment, finance to investor relations. The CMS licence holders attended regular training to ensure that they stay up-to-date with the market regulations. The compliance team reviews all marketing materials to ascertain their compliance with relevant rules and regulations and that no information presented is capable of misleading stakeholders. These stringent requirements are necessary as we produce a large number of marketing materials with specific and regulated information. Any breaches of regulation in regards to marketing can lead to costly fines and misplace our stakeholder’s trust in MUST. Both compulsory and voluntary trainings are made available to all employees to ensure that they fully understand what is required of them and their reporting obligations. New hires are subject to mandatory orientation and induction programmes. In addition, the compliance team frequently delivers regular updates on legal and organisational standards to the Board of Directors and employees. Firm- wide training on anti-bribery and anti-corruption is also rolled out to all employees to create an awareness of the importance of complying with relevant anti-bribery and anti-corruption laws as well as to educate employees on dealing with gifts and entertainment. Such stringent internal practices are required to prevent any breach from happening. Furthermore, issues like health and safety are extremely sensitive and any breaches of such regulations will have consequences beyond just fines. They may draw unwanted negative media attention, leading to loss of reputation, and may even inhibit MUST’s ability to continue operations if the breach is severe. Therefore, by equipping our employees with the necessary skills, we are able to avoid any potential breaches altogether. Being the owner of the properties, we have a responsibility to ensure that our tenants and users of our properties remain safe from injury at any time when they are present in our properties. The Property Manager has a compliance team to manage compliance at the property level. The Property Manager conducts regular training and engagement sessions for the tenants where they are free to raise relevant issues they are facing. Grievance mechanisms such as feedback channels, anonymous hotlines, and whistle-blowing channels are also available for all other stakeholders. To manage compliance risk, the compliance team is actively involved and consulted on all business activities, from concept to execution. Periodic submission of data to respective regulators and application and review of licences are also tracked. The internal audit team reviews processes and procedures, and the Manager follows an established and comprehensive enterprise risk management framework where regular reports are submitted to the Board. We take pride in our corporate governance practices and being one of the leading examples in Singapore. This is exemplified by the improvement in 2019’s score for GIFT and, being an award recipient in the SIAS 20 th Investors’ Choice Awards 2019. MUST was also one of the 59 listed companies in Singapore to retain the SGX Fast Track status. As an SGX Fast Track issuer, MUST is recognised for its high corporate governance standards and good compliance track record. Companies in this programme enjoy prioritised clearance for selected corporate action submissions to SGX Reg Co. Furthermore, MUST is also included in iEdge SG ESG Leaders Index, which proves its status as a leader of sustainability practices among our peer groups. Ultimately, MUST recognises the importance of having a robust governance structure that is supported by comprehensive compliance policies and procedures to drive long-term growth. ETHICAL CORPORATE BEHAVIOUR 86 MUST