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Board, Director and Committee Evaluation Assessment

 

1.  INTRODUCTION

1.1  Board structure and composition is the foundation of Board effectiveness. Every Company operates within a specific and unique context, which is determined by its current situation, aspirations and priorities. The structure and composition of the Board must therefore reflect the context

1.2  This Board Evaluation Assessment is adopted to ensure the Board discharges its duties and responsibilities effectively and efficiently.

1.3 The Board must complete the Board Evaluation and Board Committee’ Effectiveness Assessment based on the criteria specified by Green Book Guidelines on Board Effectiveness, Bursa Malaysia Securities Berhad as well as the recommendations made under the Malaysian Code of Corporate Governance 2012.

1.4  Where the Board fails to meet performance expectations, performance reviews may be conducted on ad-hoc basis.

2.         COMPONENTS OF AN EFFECTIVE BOARD

2.1  The Board Evaluation Assessment is based on the following criteria, as recommended by the Green

Book, Bursa Malaysia Securities Berhad and Malaysian Code of Corporate Governance 2012:

2.1.1  Structuring a high performing Board

  1. Structures the Board to match the company’s requirements;

- Board is preferably no larger than 10 Directors;

- Board composition is balanced – no more than 2 Executive Directors and at least 1/3 of Board is Independent;

- Clear separation of Chairman and Group Managing Director;

- Skills and experiences in line with company’s requirements;

- Compensation is aligned to skill set required of Directors;

- Additional selection criteria for Chairman;

- Directorships in listed companies of not more than 10 and in non-listed companies of not more than 15.

  1. Defines committees’ role, structure and composition to complement the Board’s requirements;
    • Only those committees necessary are established;
    • Adheres to clear charters as established by Board Committees are composed of the right Directors.
  2. Selects and nominates Directors using a disciplined process;
    • Clear selection criteria exists;
    • Nomination process is objective;
    • Candidates sourced from likely and unlikely sources.
  1. Evaluates the Board as a whole and each Director regularly.
    • Clear performance evaluation criteria exists;
    • Nomination and Remuneration Committee leads the process;
    • Chairman leads the follow up process;
    • Training programs address development areas.

2.1.2 Ensuring effective Board operations and interactions

  1. Makes every Board Meeting productive.
  • - Follow a set schedule;
  • - Chairman determines agenda in consultation with Group Managing Director;
  • - Adheres to a clear charter.
  1. Ensures the quality and timeliness of all Board information.
    • - Board papers are clear and relevant;
    • - Board given appropriate notice.
  1. Builds trust via positive Board interaction dynamics and open communication within the Board and with Management.
  • - Positive Boardroom dynamics and environment;
  • - Constructively challenges and supports Management;
  • - Board decisions communicated promptly to Management.
  •  

2.1.3 Fulfilling the Board’s fundamental roles and responsibilities

  1. Contributes to developing corporate strategy and setting of targets.
  • - Guides the strategic direction;
  • - Co owns the strategy with Management;
  • - Sets targets for Management.
  1. Upholds a strong corporate performance management approach.
    • - KPIs provide a balanced view;
    • -Reviews corporate p erformance and follows up.
  1. Oversees development of the company’s future leaders and human capital
  • - Select Group Managing Director and proactively plans for succession;

  • - Reviews the performance management philosophy;

  • - Evaluates the Group Managing Director;

  • - Enforces performance and development plan of those in pivotal positions;

  • - Understands the pool of future leaders.

  1. Understands and manages the company’s risks
    • - Sets the company’s risk parameters;
    • - Understands major risk exposures;
    • - Considers the risk factors in all major decisions
  1. Adopt a shareholder’s perspective when making decision
    • - Take capital market perspectives into account;
    • - Consider views of majority shareholders and adequately protect minorities’ interests.
  1. Balances valid stakeholder interests
    • - Balance and manage the sometimes conflicting stakeholders’ interests in the best sustainable interests of all shareholders.
    •  

2.2 The Board will complete the Board, Board Committees’ Evaluation Assessment and Individual Directors’ Evaluation Assessment and will discuss and assess the extent to which the Board, Committees and individual directors have met each performance criterion based on the Green Book Guidelines, Bursa Malaysia Listing Requirements and Malaysian Code of Corporate Governance 2012 based on the above roles and responsibilities.

2.3 In addition to the above, Chairman Effectiveness Assessment will also be conducted at the Board and Committee level. The assessment is based on the following criteria:

  1. Chairman is able to lead the Board effectively.
  1. Chairman has maintained a relationship of trust with and between the Executive and Non-Executive Directors.
  1. Chairman ensures the provision of accurate, timely and clear information to Directors.
  1. Chairman ensures ethical business is practiced, compliance with laws and regulations, auditing and accounting principles and corporate governance.
  1. Chairman ensures effective communication with shareholders and relevant stakeholders.

2.4       Each Committee must also conduct an annual self-evaluation based on the following:

  1. Each Committee must review the extent to which it discharged their roles and functions set out in the terms of reference of each Committee.
  1. Each Committee Member has positively contributed to interaction, discussion and participates actively in Board Committees activities.
  1. Each Committee Member has added value to the Committee and help to assist the Board for better decision-making.
  1. Each Committee Member has sufficient, relevant and recent expertise in fulfilling their roles.
  1. Each Committee identifies areas for improvement and the necessary to allow these improvements.

2.5       Upon completion of the above assessments, the Evaluation Forms will be submitted to the Group Company Secretary’s Office for tabulation and the results will be presented to the Nomination and Remuneration Committee together with agreed action plans to address the gaps, if any, for deliberation and onward submission to the Board.

3.         REVIEW

 

The Board Effectiveness Evaluation forms is subject to regular review by the Board and will be amended and updated as appropriate to reflect the current best practices.

Last updated : 12 Sep 2017

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