Board Charter

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 consist 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 considered 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 comprise 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 Director's 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, 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 Director.

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 Duties and Responsibilities of the Board

  1. Provide strategic drive for the Company 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.
  2. Oversee the conduct of the business of the Company 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.
  3. 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.
  4. Review the adequacy and the integrity of the internal control systems and management information systems of the Company. The Board must ensure that there is a satisfactory framework of reporting on internal financial controls and regulatory compliance.
  5. 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.
  6. Develop position descriptions for the Board, involving definition of the limits to management’s responsibilities, together with the ED.
  7. 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). The Board will assess the ED’s performance against the objectives established by the Board in cooperation with the ED and will assess his or her contribution on corporate strategy.
  8. 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.
  9. 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 the performance of the management.
  10. Endorse appointment, evaluation and development plans for pivotal positions based on discussions with management.
  11. 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 Director and Non-Executive Directors should be the responsibility of the Board as a whole.
  12. Establish an overall remuneration policy and framework and performance management philosophies for key management positions in the Company and the entire organisation.
  13. 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.
  14. Ensure the assessment of the independence of its Independent Non-Executive Directors is undertaken annually.
  15. 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.
  16. Conduct a business presentation where necessary, with a question and answer session in AGMs.
  17. 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.
  18. 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.

7.0 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.

8.0 Matters Reserved for the Board

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

  1. approval of corporate plans and programmes.
  2. approval of annual budgets, including major capital commitments.
  3. approval of new ventures.
  4. approval of material acquisitions and disposals of undertakings and properties.
  5. changes to the management and control structure within the Company, including key policies (treasury policies, risk management policies and key human resource issues) and delegated authority limits.

9.0 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 ED 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.

10.0 Executive Chairman

  1. The Executive Chairman is responsible for representing the Board to the shareholders and ultimately, to the general public for the Company’s performance.
  2. The Executive Chairman is responsible for ensuring the integrity and effectiveness of the corporate governance process of the Board and building a high-performance Board.
  3. The Executive Chairman together with the Company Secretaries must ensure that the content and order of the agenda for Board Meetings are appropriate and that the member of the Board have the relevant Board paper in good time.
  4. The Executive Chairman must also ensure that the Board members are properly briefed on the issues arising at Board Meeting and that all available information on the issue is tabled before the Board, for deliberation.
  5. The Executive Chairman shall maintain regular dialogue with the Executive Director over all operational matters including creating an effective corporate governance system and shall consult with the Board members on any matter that gives him cause for concern.
  6. The Executive Chairman shall act as facilitator as Board Meeting to ensure that no member, whether executive of non-executive, dominate discussion, that appropriate discussion takes place and that relevant opinion among members is forthcoming. The Executive Chairman shall ensure the discussion result is logical and understandable outcomes.
  7. Managing the interface between Board and Management.
  8. Ensuring appropriate steps are taken to provide effective communication with stakeholders and that their views are communicated to the Board as a whole.
  9. Encouraging active participation and allowing dissenting views to be freely expressed.
  10. Representing Board to shareholders.
  11. Guiding and mediating Board actions with respect to organizational priorities and governance concerns.
  12. Performing other responsibilities assigned by the Board from time to time.

11.0 Executive Director (ED)

  1. Serves as the conduit between the Board and management in ensuring the success of the Company’s governance and management functions.
  2. Meet regularly with the Board, with due notices of issues to be discussed and should record its conclusions in discharging its duties and responsibilities.
  3. Develops and recommends to the Board, annual business plans and budgets that support the Company’s long-term strategy and vision for the Company that leads to the creation of shareholder value. In addition, the ED 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.
  4. 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 ED and this will be considered as the ED’s authority and accountability as far as the Board is concerned.
  5. Ensures that the Company has an effective management team below the level of the ED and has an active plan for its development and succession.
  6. 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.
  7. Ensure, in cooperation with the Board, that there is an effective succession plan in place for the ED position.
  8. Serves as the chief spokesperson for the Company.
  9. Liaise with the Chairman and carries out other duties as directed by the Board as a whole.

12.0 Non-Executive Directors ("NEDs")/Independent Non-Executive Directors ("INEDs")

  1. 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 considered in the process of creating the strategic plan for the Company. They are also responsible in monitoring management’s success in implementing the strategy.
  2. 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.
  3. Develop position descriptions for the Board and for the ED together with the ED and the full Board, involving definition of the limits to management’s responsibilities. In addition, the NEDs should approve, or develop with the ED, the corporate objectives, which the ED is responsible for meeting.
  4. 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 ED for the job.
  5. 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.
  6. 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.
  7. Keep abreast of issues relating to the Company between meetings.
  8. Meet regularly with the Board, with due notices of issues to be discussed and should record its conclusions in discharging its duties and responsibilities.
  9. Committed to a collective decision-making process.
  10. Acknowledge the recommendations for improving the quality of AGMs as set forth by the Malaysian Code on Corporate Governance.
  11. 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

13.0 Alternate Director

Any Director (other than an alternate director) may appoint any person and willing to act, to be his alternate Director and may remove from office an alternate Director so appointed by him, provided that:

  1. Such person is not a director of the Company
  2. Such person does not act as an alternate for more than one director of the Company
  3. The appointment is approved by a majority of the other members of the Board
  4. Any fee or benefit paid by the Company to the alternate Director shall be deducted from the Director’s remuneration.

14.0 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:

  1. Not an executive director of the Company or any related corporation ("said Corporation");
  2. Has not been within the last two (2) years and is not an officer (except as a NED) of the said Corporation;
  3. Is not a major shareholder of the said Corporation;
  4. Is not a family member of any ED, officer, or major shareholder of the said Corporation;
  5. 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;
  6. 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;
  7. 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.

15.0 Board Committees

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

  1. Audit Committee
  2. Nominating Committee
  3. Remuneration Committee

For all 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.

16.0 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 in accordance with the Companies Act and approved accounting reporting standards.

17.0 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.

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:

  1. 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.
  2. 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 ED 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.
  3. 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.
  4. 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.

18.0 Code of Conduct

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

19.0 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.