Corporate Governance (page 2)
2) An independent director should:
i. Provide and enhance the necessary independence and objectivity to
the board;
ii. Ensure effective checks and balances on the board;
iii. To mitigate any possible conflict of interest between the policy-making
process and the day-to-day management of the Company;
iv. Constructively challenge and contribute to the development of
business strategy and direction of the Company; and
v. To ensure that adequate systems and controls to safeguard the
interests of the Company are in place.
4.0 BOARD APPOINTMENT
4.1 Nomination
The Company should ensure that the directors and the Managing Director are of
high calibre, sound judgment, high integrity and credibility as they are entrusted
by the shareholders to manage and perform effectively.
All nominations of candidates for the positions of directors and Managing Director
must be submitted to the Nomination Committee for consideration. The
Nomination Committee shall base on the “Fit and Proper” standards as detailed
hereunder before recommending the candidates to the Board for approval:-
Age limit
In accordance with the Malaysian Companies Act 1965.
Work Experience
5 years or more preferably in relevant industry.
Have been in senior management position.
Good track record of managing a successful and profitable organisation.
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Qualifications
Degree, Professional qualification or equivalent or with the requisite years of
relevant work experience
Personal Background
A person of good character and high integrity and credibility.
Not a bankrupt and has never been engaged in deceitful/oppressive/improper
business practices.
Has not been engaged/associated or had conducted himself in a manner
which may cause doubt on his fitness, competence and soundness of
judgment.
Has not contravened any provision made by or under any written law to be
designed for protecting members of the public against financial loss due to
dishonesty, incompetence or malpractice.
Have not been convicted whether within or outside Malaysia of any offence.
Competencies
Business acumen
Product knowledge
Visionary
Strategic agility
Proven leadership ability
Financial knowledge
Market and global awareness
Compliance and legal awareness
IT awareness
Human Resource Management skills
Directorship
Prior to 1 June 2013
Shall not hold not more than 10 directorships in listed companies and not
more than 15 directorships in non-listed companies.
On and after 1 June 2013
Shall not hold not more than 5 directorships in listed companies.
Directors should notify the Chairman of the Board before accepting any new
directorship, including an indication of time that will be spent on the new
appointment.
All nominations of candidates for the positions of directors and Managing Director
must be submitted to the Nomination Committee for consideration.
4.2 Re-election
All directors are subject to retirement by rotation.
4.3 Retention/ Re-designation of an independent director with cumulative term
of more than nine (9) years
The tenure of an independent director should not exceed a cumulative term of
nine (9) years. Upon completion of the nine (9) years, an independent director
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may continue to serve on the Board subject to the director’s re-designation as a
non-independent director. The Board, upon recommendation of the Nomination
Committee, shall justify and seek shareholders’ approval in the event that it
desires to retain a person who has served in that capacity for more than nine
years as an independent director.
Further, the long serving director is required to declare to the Company annually
that he complies the criteria as stated in item 3.3 above.
5.0 BOARD RESPONSIBILITIES
The Board should assume, amongst others, the following responsibilities:
a. Reviewing the code of conduct of the Company and implementing appropriate
internal systems to support, promote and ensure its compliance;
b. Reviewing and adopting a strategic plan for the Company;
c. Regularly evaluating economic, environmental, social and governance issues and
any other relevant external matters that may influence or affect the development
of the business or the interests of the shareholders in ensuring that the
Company’s strategies promote sustainability;
d. Overseeing the conduct of the Company’s business to evaluate whether the
business is being properly managed;
e. Reviewing, ratifying and monitoring systems of risk management and internal
control and ethical and legal compliance. This includes establishing sound risk
management framework, reviewing procedures to identify the main risks
associated with the Company’s businesses and the implementation of appropriate
systems to manage these risks;
f. Selecting, appointing and evaluating from time to time the performance of, and
planning succession of the Managing Director under the guidance of the
Nominating Committee;
g. Reviewing the procedures for appointment of senior management and ensuring
that succession planning of the senior management is in place;
h. Establishing an internal audit function which reports directly to the Audit
Committee;
i. Promoting effective communication and proactive engagements within
shareholders and other stakeholders;
j. Ensuring there is a sound framework of reporting on internal controls and
regulatory compliance;
k. Ensuring its members have access to information, advice and appropriate
continuing education programmes;
l. Reviewing and approving formal and transparent remuneration policies and
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procedures to attract and retain directors;
m. Ensuring there is appropriate corporate disclosure policies procedures;
n. Encouraging the usage of information technology in communicating with
stakeholders;
o. Taking reasonable steps in encouraging the shareholders’ participation and voting
by poll at general meetings of the Company;
p. Promoting effective communication and proactive engagements with
shareholders; and
q. Undertaking an assessment of the independent directors annually.
r. To undertake continuing professional education to enable them to discharge their
duties.
6.0 BOARD/MANAGEMENT AUTHORITIES
The Board shall have the authority to approve transactions or activities which are
beyond the individual discretionary powers of senior officers or management
committees delegated by the Board as per the Approving Authority limits stipulated in
the relevant policy manuals of respective operating units subject to the provision of the
Articles of Association of the Company.
7.0 BOARD COMMITTEES
a. The Board should establish and delegate certain duties to specialised Board
Committees to oversee critical or major functional areas and to address matters,
which require detailed review or in-depth consideration before tabling its
recommendation to the Board.
b. The Board has established the following Board Committees which operate within
their specific terms of reference:-
i. Nomination Committee
To provide a formal and transparent procedures for the appointment of
directors as well as annual assessment of effectiveness of individual
directors, Board Committees and Board as a whole and key senior
management officers.
ii. Remuneration Committee
To provide a formal and transparent procedure for developing remuneration
policy for directors and key senior management officers, and ensuring that
compensation is competitive and consistent with the Company’s culture,
objectives and strategy.
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iii. Audit Committee
To provide independent oversight of the Company’s financial reporting and
internal control system and ensure checks and balances within the
Company, and to ensure financial statements comply with applicable
financial reporting standards.
To review and assess the suitability and independence of external auditors.
Duties and functions of the above-mentioned committees are provided in their
respective terms of reference.
8.0 BOARD PROCEDURES
a. The conduct of directors will be consistent with their duties and responsibilities to
the Company and, indirectly, to the shareholders. The Board will always act within
any limitations imposed by the provisions of relevant laws and guidelines on its
activities;
b. Directors will use their best endeavours to attend Board meetings. Directors are
expected to participate fully, and constructively in Board discussions and other
activities and to bring the benefit of their particular knowledge, skills and abilities
to the Board;
c. Directors who are not able to attend a meeting will advise the Chairman at an
earlier date as possible and confirm in writing to the Secretary;
d. Board discussions will be open and constructive, recognising that genuinely held
differences of opinion could bring greater clarity and lead to better decisions. The
Chairman will, nevertheless, seek a consensus of the Board but may, where
considered necessary, call for a vote;
e. All discussions and their record will remain confidential unless there is a specific
direction from the Board to the contrary, or disclosure is required by law. Subject
to legal and regulatory requirements the Board will decide the manner and timing
of the publication of its decisions;
f. Directors are expected to strictly observe confidentiality of the Company’s
information; and
g. Directors are required to inform the Board of conflicts or potential conflict of
interest that may have in relation to particular items of business or transaction.
Subject to provisions of relevant laws and guidelines, these Directors shall abstain
from deliberation and determination of those matters.
9.0 AUTHORITY
The Board shall within its terms of reference:
a. Have complete, adequate and timely information prior to Board meetings and on
an ongoing basis;
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b. Have the resources required to perform its duties;
c. Have full and unrestricted access to any information pertaining to the Company;
d. Have the authority to form management / sub-committee(s) if deemed necessary
and fit;
e. Have the authority to delegate any of its responsibilities to any person or
committee(s) that is deemed fit;
f. Have direct communication channels with employees, senior management
personnel and relevant external parties; and
g. Be able to obtain independent professional or other advice.
10.0 MEETINGS & MINUTES
Subject to relevant laws and guidelines, the following should be observed by the
Board:-
a. The Board shall meet on a quarterly basis, but in any event, no less than once in
every three (3) months, or whenever deemed necessary;
b. Individual directors must attend at least 50% of the Board meetings held in each
financial year or such other percentage as may be prescribed by the Listing
Requirements;
c. The quorum of the meetings shall be met pursuant to the Articles of Association of
the Company;
d. The Board is also allowed to carry out the resolution by way of circulation;
e. The participation of the director can be facilitated by means of video or telephone
conferencing;
f. Head of the respective division units and relevant management personnel may be
invited to attend the Board meetings;
g. The Company Secretary shall be appointed as Secretary of the Board Meeting
and minutes of meetings shall be taken and documented; and
h. Information should be supplied to the directors at least seven (7) days prior to the
meeting in order for them to discharge their duties.
11.0 REMUNERATION OF DIRECTORS
a. The Company aims to 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, but without paying more than is necessary to achieve
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this goal.
b. The level of remuneration for the executive directors is determined by the
Remuneration Committee after giving due consideration to the compensation
levels for comparable positions among other similar industry.
c. Non-executive directors are entitled to participate in the Company’s Employee
Share Options Scheme (ESOS) subject to approval at a general meeting. Nonexecutive
directors who participated in the ESOS are prohibited to sell, transfer or
assign the shares within one (1) year from the date of offer of such options.
d. No director other than executive directors shall have a service contract with the
Company.
e. A formal independent review of the directors’ remuneration is undertaken no less
frequently than once every three (3) years.
12.0 BENEFICIAL INFLUENCE ON COMMUNITY
The Board has a continuing responsibility to the community to ensure that the
Company’s activities are conducive towards promoting the economic well-being of its
community and are in line with government’s economic objectives.
