Corporate Governance

1.0      Introduction

 

The Board is accountable and responsible for the performance of the Company and the manner in which the affairs of the Company are managed. Each Director has a legal duty to act in the best interest of the Company and Board members are expected to show good stewardship and act in a professional manner.

 

2.0      Objective

 

This Board Charter which sets out the role, functions, composition, operation and processes of the Board is to ensure that all Board members of the Company are aware of their duties and responsibilities.

 

The Board Charter act as a source reference and primary induction literature to provide insights to prospective Board members. It will also assist the Board in the assessment of its own performance and of its individual Directors.    

 

3.0      Composition of the Board

 

The Board should consists of qualified individuals with diverse set of skills, experience, knowledge and gender, where appropriate, necessary to lead and control the business to cope with the 3Cs i.e. Complexities, Competition and Changes. The Board believes that the presence of diverse ethnicities, nationalities and gender mix on the Board can widen the Board's perspective in effectively discharging its duties and responsibilities. While promoting diversity, due recognition to the financial, technical, experience, competency, character, time commitment, integrity and potential contribution of the Director's concern and business imperative should remain a priority. In line with the Corporate Governance Blueprint 2011 to ensure women participation on Boards reaches 30% by year 2016, despite not setting any specific target for the Company, the Board will give due consideration towards meeting this target when considering new appointments.

 

The Board should also be capable of and perceived to exercise independent judgement.

 

Non-Executive Directors should also be persons of caliber, credibility and have the necessary skill and experience to bring an independent judgement to bear on the issues of strategy, performance and resources, including key appointments and standards of conduct. The Independent Non-Executive Directors help to ensure that the interests of all shareholders, and not only the interests of a particular fraction or group, are indeed taken into account by the Board and that the relevant issues are subjected to objective and impartial consideration by the Board.

 

4.0      Members of the Board

 

The Board should comprised of a minimum of two (2) Directors and a maximum of 15 Directors. At any one time, at least two (2) or one-third (1/3), whichever is higher, of the Board members are Independent Non-Executive Directors. The tenure of an Independent Non-Executive Director shall not exceed a cumulative term of nine (9) years provided approved by shareholders at the Annual General Meeting (“AGM”).

 

All Directors are expected to give sufficient time and attention to the affairs of the Company. Directors are also required to keep abreast of changes in regulatory, laws and accounting standards and development in corporate governance, broad business trends, strategy, financial instruments and technology advancement through reading of relevant industry and business publications and/or attending training programme and relevant conferences. Directors who are well informed would be in a better position to evaluate proposals made by Management and to ask the right questions; hence, be more effective as Directors. In any given circumstances, directorships held by any Board member in listed companies shall not exceed five (5) at any one time.

 

The composition and size of the Board are reviewed from time to time to ensure its appropriateness. All Directors are subjected to retirement by rotation and re-election at AGM.

 

5.0      Directors’ Training

 

New Directors are provided with appropriate briefings on the Company’s affairs (its vision and mission, philosophy and nature of business, current issues within the Company and Group, the corporate strategy and the expectations of the Company concerning input from Directors). The Company Secretary is primarily responsible for the induction programme with appropriate assistance from the Executive Directors.

 

In addition to the Mandatory Accredited Programme (“MAP”) required by Bursa Malaysia Securities Berhad, Board members are also required to attend training programmes which are relevant to the Company’s operations and business. The Board will assess the training needs of the Directors.

 

6.0      Directors’ Remuneration

 

The performance of Directors is measured by the Directors’ contribution and commitment to both the Board and the Company. The Executive Directors’ remuneration will depend on the Company and individual performance, seniority in service, experience and scope of responsibility.

 

In the case of Non-Executive Directors, the level of remuneration reflects the contribution and level of responsibilities undertaken by the particular Non-Executive Director.

 

7.0      Duties and Responsibilities of the Board

 

(a)  Provide strategic drive for the Company and Group by guiding top management in developing corporate strategy. The Board is to ensure that the companies they govern remain competitive by having in place a robust strategy that focuses on sustainable value creation. Attention should be given to environmental, social and governance aspects of business which underpin sustainability.

 

(b)  Oversee the conduct of the business of the Company and Group and to evaluate whether the business is being properly managed. In this respect the Board must ensure that there are objectives in place against which management’s performance can be measured.

 

(c)  Identify principal risks and ensure the implementation of appropriate systems to manage those risks. The target is to achieve a proper balance between risks incurred and potential returns to shareholders.

 

(d)  Review the adequacy and the integrity of the internal control systems and management information systems of the Company and Group. The Board must ensure that there is a satisfactory framework of reporting on internal financial controls and regulatory compliance.

 

(e)  Establish an internal audit function in order to obtain assurance of regular review and/or appraisal of the effectiveness of the system of internal controls within the Company and Group.

 

(f)  Develop position descriptions for the Board and for the Managing Director (“MD”) involving definition of the limits to management’s responsibilities, together with the MD.

 

(g)  Ensure succession planning, including appointing, training, fixing the compensation of and where appropriate replacing senior management (a person in power to make impact on the running of the business of the Company and Group). The Board will assess the MD’s performance against the objectives established by the Board in cooperation with the MD and will assess his or her contribution on corporate strategy.

 

(h)  Appoint a committee of Directors with the responsibility of proposing new nominees for the Board and for assessing Directors on an on-going basis. The actual decision as to who shall be nominated should be the responsibility of the full Board after considering the recommendations of such a committee.

 

(i)  Exercise an adequate degree of independence and have a practice to allow Directors to meet and exchange views. This gives the Board the opportunity to effectively assess the direction of the Company and Group and the performance of the management.

 

(j)  Endorse appointment, evaluation and development plans for pivotal positions based on discussions with management.

 

(k)  Set remuneration at levels which are sufficient to attract and retain the Directors needed to run the Company successfully, taking into consideration all relevant factors including the function, workload and responsibilities involved. The Board Remuneration Committee develop and recommend the remuneration package of the Executive Directors. The decision of both Executive Directors and Non-Executive Directors should be the responsibility of the Board as a whole.

 

(l)  Establish an overall remuneration policy and framework and performance management philosophies for key management positions in the Company and the entire organisation.

 

(m)  The Board’s effectiveness in carrying out its role and duties shall be evaluated at least on an annual basis. This duty shall be discharged to the Board Nomination Committee.

 

(n)  Ensure the assessment of the independence of its Independent Non-Executive Directors is undertaken annually.

 

(o)  Ensure the management develop and implement an investor-relations programme or shareholder communications policy for the Company. This policy should include how feedback received from its shareholders are considered by the Company when making business decisions.

 

(p)  Conduct a business presentation where necessary, with a question and answer session in AGMs.

 

(q)  Receive and seek information that is not just historical or bottom line and financial oriented but information that goes beyond assessing the quantitative performance of the Group to include other performance factors/qualitative factors.

 

(r)  Have a formal schedule of matters specifically reserved for the Board’s decision to ensure that the direction and control of the Company is firmly in the Board’s hands. The schedule of matters specifically reserved for the Board should be kept up to date.

 

8.0    Frequency of Board Meetings

 

The Board shall conduct at least four (4) meetings annually, with additional meetings to be convened as and when necessary.

 

All Directors will be provided with the performance and progress reports on a timely basis prior to the scheduled Board meetings. A full agenda of the meeting and all Board Papers, including complicated issues or specific matters, would be distributed in advance to ensure Directors are well informed and have the opportunity to seek additional information, and are able to obtain further clarification from the Company Secretary, should such a need arise. Where necessary, the services of other senior management or external consultants will be arranged to brief and help the Directors to clear any doubt or concern.

 

9.0     Matters Reserved for the Board

 

The Board reserves full decision-making powers on the following matters:

 

(a)   approval of corporate plans and programmes.

 

(b)   approval of annual budgets, including major capital commitments.

 

(c)   approval of new ventures.

 

(d)   approval of material acquisitions and disposals of undertakings and properties.

 

(e)   changes to the management and control structure within the Company and Group, including key policies (treasury policies, risk management policies and key human resource issues) and delegated authority limits.

 

10.0     Powers of the Board

 

There should clearly be an accepted division of responsibilities at the head of the Company which will ensure a balance of power and authority such that no one individual has unfettered powers of decision. Where the roles of Chairman and the MD are combined, there should be a strong independent element on the Board.

 

All Executive and Non-Executive Directors have the same right of access to information. There should be an agreed procedure whereby the Directors, collectively or individually, may seek independent professional advice in furtherance of their duties at the Company’s expense. In addition, all Directors should have access to the advice and services of the Company Secretary.

 

Where the Board appoints a committee, it should spell out the authority of the committee and in particular, whether the committee has the authority to act on behalf of the Board or simply has the authority to examine a particular issue and report back to the Board with a recommendation.

 

11.0    Chairman of the Board

 

(a)    Leading the Board in setting the values and standards of the Company.

 

(b)   Provides leadership to the Board by helping the Board fulfils the goals it sets by assigning specific tasks to members of the Board.

 

(c)  Ensures proper flow of information to the Board, reviewing adequacy and timing of documentation in support of management’s proposals. In addition, the Chairman ought to organise and present the agenda for regular or special Board Meetings based on input from Directors and ensure that all relevant issues are on the agenda, issues discussed are forward looking and concentrates on strategy. The primary responsibility of the chair also involves him organising information necessary for the Board to deal with the agenda and for providing this information to Directors on a timely basis.

 

(d)   Provides a reasonable time for discussion at the meeting. Furthermore, the Chairman should encourage a healthy debate on the issue and bring to the Board objectivity and independence in the deliberations. Chairman should also maintain control of proceedings without dominating discussions.

 

(e)   Ensures  adequate  lead  time  for  effective  study  and  discussion  of business under consideration and that Board Resolutions are put to a vote if necessary to ensure that it is the will of the majority and not that of the dominant shareholder that prevails and that genuine disagreements have been aired and resolved.

 

(f)    Establishes standards for preparation of Board Papers and reports.

 

(g)   Acts as liaison between the Board and management and carries out other duties as requested by the Board as a whole, depending on need and circumstances.

 

(h)   Identifies guidelines for the conduct of the Directors, and ensures that each Director is making a significant contribution.

 

(i)    Ensures that all Directors, Executives and Non-Executives alike, are enabled and encouraged to participate fully in all its activities. This includes making certain that Directors, especially Non-Executive Directors receive timely, relevant information tailored to their needs and that they are properly briefed on issues arising at Board Meetings.

 

(j)    Manages the processes of the Board and ensures that the Board discharges their responsibilities.

 

(k)    Ensures the balance of membership, subject to Board and shareholder approval.

 

(l)     Develops position descriptions for the Board and for the MD, involving definition of the limits to management’s responsibilities together with the MD. In addition, the Chairman should develop with the MD, the corporate objectives, which the MD is responsible for meeting.

 

(m)   Provides a formal schedule of matters specifically reserved for the Board’s decision to ensure that the direction and control of the Company and Group is firmly in the Board’s hands.

 

(n)   Maintains an effective communications policy (together with the MD) that enables both the Board and management to communicate effectively with its shareholders, stakeholders and the public generally.

 

(o)   Acknowledges the recommendations for improving the quality of AGMs as set forth by the Malaysian Code on Corporate Governance.

 

(p)    Secures  good  corporate  governance  and  ensures  that  Executive Directors look beyond their Executive function and accept their full share of responsibilities on governance. Given the importance and particular nature of the Chairman’s role, it should in principle be separated from that of the MD.

 

(q)    Delineates rules to determine the materiality of any transaction and should establish clearly which transactions require multiple Board Signatures. Board should also agree on the procedures to be followed especially when decisions are required between Board Meetings.

 

12.0    Managing Director (“MD”)/Executive-Directors (“EDs”)

 

(a)  Serves as the conduit between the Board and management in ensuring the success of the Company’s governance and management functions.

 

(b)   Meet regularly with the Board, with due notices of issues to be discussed and should record its conclusions in discharging its duties and responsibilities.

 

 (c)   Develops and recommends to the Board, annual business plans and budgets that support the Company’s long-term strategy and vision for the Company and Group that leads to the creation of shareholder value. In addition, the MD should strive to achieve the Company’s financial and operational goals and objectives, maintain a satisfactory competitive position within its industry and ensures continuous improvement in the quality and value of the products and services provided by the Company and Group.

 

(d)    Formulates and oversees the implementation of major corporate policies, runs the day-to-day business and implement the policies, strategies and decisions adopted by the Board. All Board authorities conferred on the management is delegated through the MD and this will be considered as the MD’s authority and accountability as far as the Board is concerned.

 

(e)    Ensures that the Group has an effective management team below the level of the MD and has an active plan for its development and succession.

 

(f)   Fosters a positive, corporate culture that promotes ethical practices, encourages individual integrity and fulfils social responsibility to attract, retain and motivate a diverse group of top quality employees at all levels.

 

(g)    Ensure, in cooperation with the Board, that there is an effective succession plan in place for the MD position.

 

(h)    Serves as the chief spokesperson for the Company.

 

(i)     Liaise with the Chairman and carries out other duties as directed by the Board as a whole.

 

13.0   Non-Executive Directors (“NEDs”)/Independent Non-Executive Directors (“INEDs”)

 

(a)   Review, approve or disapprove management’s corporate strategy proposal. In doing so, they should bring an objectivity and breadth of judgement to the strategic planning process, as they are not involved in the day to day management of the business. If they are to independently judge the merits of a management’s proposal concerning strategic or business plans, they need to evaluate elements, which should be taken into account in the process of creating the strategic plan for the Company. They are also responsible in monitoring management’s success in implementing the strategy.

 

(b)   Oversee the conduct of the Company’s business and to evaluate whether the business is properly managed. In this respect, they must ensure that there are objectives in place against which management’s performance can be measured.

 

(c)     Develop position descriptions for the Board and for the MD together with the MD and the full Board, involving definition of the limits to management’s responsibilities. In addition, the NEDs should approve, or develop with the MD, the corporate objectives, which the MD is responsible for meeting.

 

(d)    Ensure the highest caliber of senior management when appointing, training, assessing and providing for succession. The key to the effective discharge of this particular task is to provide for the best MD for the job.

 

(e)   Represent their interests on the Board in the case of NEDs representing substantial shareholders and to provide a balanced and independent view to the Board. INEDs however should bring independence of judgement and objectivity to Board deliberations.

 

(f)     Acquire and provide the necessary skill and experience to bring an independent judgement to bear on the issues of strategies, performance and resources including key appointments and standards of conduct.

 

(g)     Keep abreast of issues relating to the Company and Group between meetings.

 

(h)    Meet regularly with the Board, with due notices of issues to be discussed and should record its conclusions in discharging its duties and responsibilities.

 

(i)     Committed to a collective decision making process.

 

(j)   Acknowledge the recommendations for improving the quality of AGMs as set forth by the Malaysian Code on Corporate Governance.

 

(k)    Maintain an effective communications policy that enables both the Board and management to communicate effectively with its shareholders, stakeholders and the public generally.

 

(l)    Outline rules to determine the materiality of any transaction and should establish clearly which transactions require multiple Board signatures. Board should also agree on the procedures to be followed especially when decisions are required between Board meetings.

 

14.0   Senior Independent Non-Executive Directors (“Senior INED”)

 

The Board may select among its INEDs and appoint a Senior INED. The selection of Senior INED is based on his experience and the significant influence he has within the Board, his ability to convey concerns of the INEDs on the Board to the other members of the Board and in the event of dissention between the Chairman and/or EDs of the Company in the execution of their duties as INEDs.

The Senior INED is expected to play the following roles:

 

(a)   Act as a sounding board for the Chairman by meeting or speaking to Chairman regularly to:

  • ensure all INEDs have an opportunity to provide input on the agenda, and advise the Chairman on the quality, quantity and timeliness of the information submitted by Management that is necessary or appropriate for the INEDs to perform their duties effectively;
  • consult the Chairman regarding Board meeting schedule to ensure the INEDs can perform their duties responsibly and with sufficent time for discussion of all agenda items;
  • serve as the principal conduit between the INEDs and the Chairman on sensitive issues, for example issues that arise from 'whistle-blowing';

 

(b)   Provide leadership and advice to the Board by being available for confidential discussions with other NEDs who may have concerns which they believe have not been properly considered by the Board as a whole and/or there is perceived conflict of interest involving the Chairman;

 

(c)   Serve as a designated contact for consultation and direct communication with shareholders on areas that cannot be resolved through the normal channels of contact with the Chairman and/or MD, or for which such contact is inappropriate.

 

15.0   Directors' Independence

 

The Board defines INED as one who is independent and free from any business or other relationship that could interfere with the exercise of independent judgement or the ability to act in the best interest of the Company and are willing to express their opinions at the Board table free of concern about their position or the position of any third party. The Board believes that is impossible and/or impractical to formulate a list of criteria which is appropriate to characterise, in all circumstances, whether a NED is independent and choose to recognise amongst others, the spirit, intention, purpose and attitude of each NED to be considered as exhibiting independent judgement or the ability to act in the best interest of the Company. In determining/assessing the 'independence' of its Directors, the Company also adopts the provisions of the Listing Requirements of Bursa Malaysia as follows:

 

(i)   Not an executive director of the Company or any related corporation ("said Corporation");

 

(ii)  Has not been within the last two (2) years and is not an officer (except as a NED) of the said Corporation;

 

(iii)  Is not a major shareholder of the said Corporation;

 

(iv)  Is not a family member of any ED, officer, or major shareholder of the said Corporation;

 

(v)  Is not acting as a nominee (as defined in the Listing Requirements of Bursa Malaysia) or representative of any ED or major shareholder of the said Corporation;

 

(vi)  Has not been engaged as a professional adviser or is not presently a partner, director (except as an independent director) or a major shareholder, as the case may be, of a firm or corporation (Entity) which provides professional advisory services;

 

(vii)  Has not been engaged in any transaction or is not presently a partner, Director or a major shareholder, as the case may be, of the Entity (other than subsidiaries of the Company) which has been engaged in any transaction.

 

16.0   Board Committees

The Board appoints the following Board Committees with specific terms of reference:

 

(a)    Audit Committee


Terms of Reference of Audit Committee


Composition and Terms of Reference of the Audit Committee


1. Composition


The Audit Committee shall comprise of not less than three (3) members, of which all shall be non-executive directors with a majority of them being independent directors. No alternate director shall be appointed a member of the Audit Committee. A Chairman shall be elected from among their number who shall be an independent director. At least one (1) member of the Audit Committee:

    1. must be a member of the Malaysian Institute of Accountants; or


    1. if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience and:


      • he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or


      • he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or


      • fulfills such other requirements as prescribed or approved by the Exchange.


The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Nominating Committee annually to determine whether the Audit Committee and members have carried out their duties in accordance with the terms of reference.


2. Meetings


There shall be a minimum of four (4) meetings in a financial year and upon the request of its members, the management, the internal auditors or the external auditors, the Chairman of the Audit Committee shall convene a meeting of the Audit Committee to consider any matter within the scope and responsibilities of the Audit Committee or any matter the external auditors believe should be brought to the attention of the directors or shareholders.


At least twice a year, the Audit Committee shall meet with the external auditors without any executive officer of the Group being present.

Two (2) members present of which a majority must be independent directors shall form a quorum. Any questions arising at any meeting of the Audit Committee shall be decided by a majority of votes. In case of an equality of votes, the votes of the independent directors shall prevail.


The Company Secretary shall act as the Secretary of the Audit Committee and minutes of each meeting is distributed to each member of the Board.


Other directors and employees shall attend any particular Audit Committee meeting only at the Audit Committees invitation, specific to the relevant meeting.


3. Authority


The Audit Committee for the performance of its duties shall:


  • have the authority to investigate any matter within its terms of reference;


  • have the resources which are required to perform its duties;


  • have full and unrestricted access to any information pertaining to the Company;


  • have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;


  • be able to obtain independent professional or other advice; and

  • be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Group, whenever deemed necessary.

4. Duties and Responsibilities


The duties and responsibilities of the Audit Committee are to serve as a focal point for communication between non-audit committee directors, the external auditors, internal auditors and the management, to assist the Board in fulfilling its fiduciary responsibilities as to accounting policies and reporting practices of the Group and the sufficiency of auditing relative thereto and to assist the Board in assuring the independence of the Companys external auditors, the integrity of management, the adequacy of disclosures to shareholders, and the adequacy and integrity of internal controls.

5. Functions


The functions of the Audit Committee should include the review and report of the following to the Board of the Company:


i. Internal Audit


  • to review the adequacy of the scope, functions, competency and resources of the internal audit functions, and that it has the necessary authority to carry out its work;


  • to review the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and where necessary, ensure that appropriate action is taken on the recommendations of the internal audit function;


  • to review any appraisal or assessment of the performance of members of the internal audit function;


  • to approve any appointment or termination of senior staff members of the internal audit function;


  • to note resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning; and


  • to consider the major findings of internal investigations and managements responses, and ensure appropriate actions are taken on the recommendations of the internal audit function.


ii. External Audit


  • to discuss with the external auditors before the audit commences, their audit plan and ensure coordination where more than one audit firm is involved;


  • to discuss with the external auditors, their evaluation of the system of internal controls;


  • to discuss with the external auditors, their audit report;


  • to discuss with the external auditors on the assistance given by the employees to the external auditors;


  • to discuss problems and reservations arising from the interim and final audits, and any matters the external auditors may wish to discuss (in the absence of Management where necessary);


  • to review with the external auditors, their management letter and managements response;


  • to consider and recommend the appointment of the external auditors, the audit fee and any questions of resignation or dismissal; and


  • to approve the provision of non-audit services by the external auditors.


iii. Financial Reporting


  • to review the quarterly results and annual financial statements, prior to the approval by the Board, focusing particularly on:


- any changes in or implementation of any accounting policies and practices;


- significant adjustments and unusual events arising from the audit;


- the going concern assumption; and


- compliance with accounting standards and other legal requirements; and


  • to review all prospective financial information provided to the regulators and/or the public.


iv. Risk Management


To oversee the risk management function of the Group including the adequacy and integrity of the Groups internal control system and report to the Board significant changes in the business and the external environment which affect key risks.


v. Related Party Transactions


To consider any related party transaction and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raises questions of management integrity. They are also required to ensure that the Board report such transactions annually to the shareholders via the annual report.


vi. ESOS


To verify the options allocation of the Companys Employees Share Option Scheme (ESOS) at the end of each financial year to ensure they are in compliance with the allocation criteria of the share option.


vii. Reporting of Breaches


To report promptly to Bursa Malaysia Securities Berhad on any matter reported by it to the Board of Directors, which has not been satisfactorily resolved resulting in the breach of the Listing Requirements of Bursa Malaysia Securities Berhad.


viii. Other Matters


To consider other matters as may be directed by the Board from time to time.



This Terms of Reference has been revised by the Board and adopted by the Audit Committee in April 2016.


(b)    Nominating Committee


Terms of Reference of Nominating Committee


1. Membership


The Nominating Committee shall comprised of not less than three (3) members, of which all shall be Non-Executive Directors with a majority of them independent directors. The term of office and performance of the Nominating Committee and each of its members shall be reviewed by the Board at least once every three (3) years to determine whether the Nominating Committee and members have carried out their duties in accordance with the terms of reference.


2. Chairman


A Chairman shall be elected from among their number who shall be a Senior Independent Director.


3. Secretary


The Company Secretary shall act as the Secretary of the Committee.


4. Quorum


Two (2) members present or half of the Committee, whichever is the higher shall form a quorum. Any questions arising at any meeting of the Nominating Committee shall be decided by a majority of votes. In case of an equality of votes, the votes of the Independent Directors shall prevail.


Other directors and relevant employees shall attend any particular Nominating Committee meeting only at the Nominating Committees invitation, specific to the relevant meeting.

5. Frequency of Meetings


The Committee shall meet at a minimum twice a year, and shall hold additional meetings as and when necessary.


6. Notice of Meetings


Meetings shall be called by the Secretary of the Committee at the request of the Committee Chairman based on planned calendar dates. Notice of each meeting confirming the venue, time and date, together with an agenda of items and its supporting papers to be discussed, shall be forwarded to each member of the Committee, no later than five (5) working days before the date of the meeting.



7. Minutes of Meetings


Once approved, minutes should be circulated to all other members of the Board together with the board meeting papers, unless a conflict of interest exists.


8. Duties and Functions


The Nominating Committee shall:


(i) New Appointments


(a) Consider and recommend to the board, candidates for directorship, proposed by the CEO, any senior management or any director or shareholder, or outsourced service providers, taking into consideration the candidates’ skills, knowledge, expertise, competency, experience, time, commitment, character, professionalism, integrity and potential contribution while giving due consideration for gender diversity. For the position of independent non-executive directors, the Nominating Committee should also evaluate the candidates ability to discharge such responsibilities as expected from independent non-executive directors;


(b) Before any appointment by the board, evaluate the balance of skills, knowledge, experience, independence and diversity on the board. Prepare a description of the role and capabilities required for a particular appointment for the boards recommendation. In identifying suitable candidates, the Committee may:


  • use the services of external advisors to facilitate the search;


  • consider candidates from a wide range of backgrounds;


  • consider candidates on merit and against objective criteria with due regard to diversity including gender and the appointees time commitment; and


  • request to consider the disclosure of any business interests that may result in a conflict of interest;


(c) In the case of the appointment of a chairman, prepare position description, including time commitment expected. Any significant commitment to be disclosed to the board prior to appointment and any changes should be reported to the board as they arise;


(d) Recommend to the board, candidates to fill the seats on board committees, in consultation with the chairmen of those committees. In the event that the chairmans position (regardless of board/ committee) is to be filled, to consult with the board;


(e) Ensure that on appointment to the board, non-executive directors receive a formal letter of appointment setting out clearly what is expected of them in terms of time commitment, board committee involvements and involvement outside board meetings;



(ii) Re-election, Re-appointment and Resignation/Termination


(a) Recommend to the board, candidates for re-election of directors by shareholders under the annual re-election provisions or retirement, with due consideration to the extent to which the interplay of the directors expertise, skills, knowledge and experience with those of other board members, as well as their roles as committee members. Attention should be paid to independent directors who are retained beyond nine years as the board has to provide strong justification in exceptional circumstances and seek shareholders approval. In obtaining the shareholders approval, the Nominating Committee should conduct an assessment of the independent director(s) and recommend to the board whether the independent director(s) should remain independent or be re-designated.


In the annual evaluation of independent non-executive directors, focus should go beyond the independent directors background, economic, family and work relationships with due consideration given as to whether an independent director can continue to bring independent and objective judgment to board deliberations;


(b) Matters relating to the continuation in office of any director at any time, including the suspension or termination of service of an executive director as an employee of the company subject to the provisions of the law and their service contract;


(c) The re-appointment of any non-executive director at the conclusion of his term of office having given due regard to his performance and ability to continue to contribute to the board in terms of knowledge, skills and experience required;


(iii) Specific Nominations and Succession Planning


(a) Recommend suitable candidates for the role of senior independent director, as applicable;


(b) Periodically report to the board on succession planning for the board chairman, directors and key management personnel, particularly the CEO. The board should work with the Nominating Committee to evaluate potential successors, taking into account the challenges and opportunities facing the company, and the skills and expertise, including diversity, needed on the board in the future;


(iv) Annual Performance Assessment of Board, Committees and Individual Directors


(a) Annually review the required mix of skills, experience, commitment, performance, diversity and other qualities, including core competencies and effectiveness of the board as a whole, the board committees and the contribution of each individual directors. All evaluations carried out by the Nominating Committee in the discharge of its functions should be properly documented.




This process should be coordinated by the Nominating Committee, with the assistance of the Company Secretary, and thus, reporting to the board at the end of each financial year with an assessment of the boards performance and areas in which the board, board committees or individual director could improve;


(b) Annually review the time required of non-executive and independent directors. Performance assessments should be undertaken to assess whether the directors are spending enough time to fulfill their duties;


(c) Evaluate and appraise the performance of the chairman of the board to be led by the senior independent director;


(v) Induction Training and Training Needs Analysis


(a) Review the induction and training needs of directors. Ensure the training programme attended by the directors must be one that aids the director in the discharge of his duties;


(vi) Size of Board and Independent Directors


(a) Assess the desirable balance in board membership by reviewing the size, structure and composition of the board, taking into consideration the number of directorships;


(b) Assess desirable number of independent directors; and


(c) Consider the representation of interest groups as part of boardroom diversity. Factors to consider includes gender, race, religion, nationality, professional background and culture.


The selection and assessment/evaluation criteria shall be as per the following forms and checklist:

  • Independent Directors Self-Assessment Checklist

  • Directors/Key Officers Evaluation Form

  • Board Skills Matrix Form

  • Board & Board Committee Evaluation Form


9. Annual General Meeting


The Committee Chairman should attend the annual general meeting (including extraordinary general meetings) to answer any shareholder questions on the Committees activities, in particular on areas pertaining to proposed resolutions for shareholders to consider on the appointment or re-appointment of Directors.


10. Reporting Responsibilities


The Committee Chairman shall report to the Board on its proceedings after each Committee meeting. The Committee shall make recommendations to the Board as appropriate on any area within its responsibility or as delegated by the Board, where action or improvement is needed. The Committee shall produce a report to be included in the Companys annual report about its activities and the process used to identify and make appointments.


11. Authority


The Committee for the performance of its duties shall have access to the Group Human Resources function, including without limitation, its information, records, properties and personnel for the discharge of its responsibilities, including obtaining independent professional advice at the Companys expense and periodic review of its terms of reference against its performance.



This Terms of Reference has been approved by the Board and adopted by the Nominating Committee in January 2002 and revised on 22 April 2014.

(c)    Remuneration Committee

(d)    ESOS Committee

(e)    Board Management Committee

 

Except for Board Management Committee, INEDs play a leading role in these committees. The management and third parties are co-opted to the committees as and when required. Details of the membership and a summary of the terms of reference of each committee appointed by the Board are published in the Annual Report.

 

17.0   Financial Reporting

 

The Board aims to present a clear and balanced assessment of the Company’s position and prospects in presenting the annual financial statements, quarterly results announcements and other price sensitive information and reports submitted to regulators.

 

The Board ensure that the annual financial statements are prepared so as to give a true and fair view of the state of affairs of the Company and Group in accordance with the Companies Act and approved accounting reporting standards.

 

18.0    Company Secretary

 

The Company Secretary plays an important advisory role and is a source of information and advice to the Board and its committees on issues relating to compliance with rules, regulations, procedures and laws affecting the Company and the Group.

 

The Board shall appoint someone who is capable of carrying out the duties to which the post entails, and the removal of the Company Secretary shall be a matter for the Board as a whole. The Company Secretary shall be of a senior position with adequate authority and shall report directly to the Board.

 

The specific functions of the Company Secretary are as follows:

 

(a)    Implementation of Corporate Governance

  • Assisting the Board and Chairman on the implementation of the Malaysian Code on Corporate Governance ("CG Code").
  • Monitoring compliance with the principles and recommendations of the CG Code and informing the Board of any breaches; and
  • Ensuring high standards of governance by keeping abreast with the latest developments in corporate governance, changes in the legal and regulatory framework and international best practices.

 

(b)    Supports the Board and Chairman

  • Providing advice to the Chairman and Directors as to their duties and responsibilities;
  • Preparing the agenda with the Chairman and MD and notifying all Directors of Board Meetings;
  • Ensuring the meeting flows effectively;
  • Recording the decisions of the Board, ensuring that the decisions are relayed to management to act upon and circulated amongst the Directors; and
  • Providing full access and services to the Board.

 

(c)    Appointment of New Directors

  • Assisting the Board in ensuring a smooth administration of the appointment of new Directors;
  • Briefing new Directors on organisational structure of the Company and procedures that regulate the operations of the Board; and
  • Ensuring availability of information required by new Directors for the proper discharge of their duties.

 

(d)    Compliance with Filing and Administrative Requirements

  • Ensuring compliance with the procedure for conducting meetings and the safekeeping of corporate documentations;
  • Assisting the Board with interpreting legal and regulatory acts related to the CG Code, listing rules and international regulations and developments;
  • Advising the Board on its obligatory requirements to disclose material information to the shareholders and financial markets on a timely basis; and
  • Notifying the Chairman of any possible violations of legal and regulatory acts.

 

 

19.0    Code of Conduct

 

The Company’s Code of Conduct is to be observed by all Directors and employees of the Group. The Board will monitor compliance with the Code and review the Code regularly to ensure that it continues to remain relevant and appropriate.

 

20.0    Review of the Board Charter

 

The Board will review the Board Charter periodically to update the principles and practices in accordance with the needs of the Company and any new regulations that may have an impact on the discharge of the Board’s responsibilities.

 

 

This Board Charter has been approved and adopted by the Board on 29 January 2013 and revised on 22 April 2014.

 

 


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