Corporate Governance

 

 

 

BOARD CHARTER - Aug 2013

  1. Introduction

    The Board of Directors of MENANG CORPORATION (M) BERHAD regard Corporate Governance as important principles and practices to be upheld, and it will continuously strive to ensure that good Corporate Governance is implemented and carried out throughout the Group, wherever applicable, with the ultimate objective to adopt good governance practices as an integral part of business dealings and business culture.

  2. Objective

    This Board Charter shall constitute and form an integral part of the each Director’s duties and responsibilities, and the role the directors shall be clear, strengthened in all its relationships with the management and shareholders. In light of this, the responsibilities of the board shall be set out in the Board Charter to ensure the understanding of management oversight, setting strategic direction that is premised on sustainability and promoting ethical conduct in business dealings.

  3. The Board
    1. Role
      1. The Board is charged with leading and managing the Company in an effective and responsible manner. Each Director has a legal duty to act in the best interest of the Company. The Directors, collectively and individually, are aware of their responsibilities to shareholders and stakeholders for the manner in which the affairs of the Company are managed. The Board sets the Company’s values and standards and ensures that its obligations to its shareholders and stakeholders are understood and met.
      2. The Board understands that the responsibility for good Corporate Governance rests with them and therefore strives to follow the principles and best practices stated in the MCCG. The Board includes a narrative statement in its Company’s Annual Report on the extent of compliance with the principles and recommendations in Corporate Governance pursuant to Paragraph 15.25 of the LR.
      3. The Company complies with the various guidelines issued by Bursa Securities and the SC relating to disclosure and internal audit functions.
      4. The duties, powers and functions of the Board are governed by the Articles of Association of the Company, the Companies Act 1965, as amended from time to time and any re-enactment thereof, regulatory guidelines and requirements that are in force.
      5. The Board shall assume the following responsibilities:
        • Reviewing and adopting a strategic plan for the Company;
        • Establishing policies for strengthening the financial and operational performance of the Group and ensuring proper and effective execution of the policies;
        • Overseeing and evaluating the conduct of the Company’s business to ensure the business is properly managed. This includes ensuring the solvency of the Group and the ability of the Group to meet its contractual obligations and to safeguard its assets;
        • Identifying principal risks and ensuring the implementation of appropriate systems to manage these risks;
        • Reviewing the adequacy and the integrity of the Company’s internal control systems and management information systems, including systems for compliance with applicable law, regulations, rules, directives and guidelines;
        • Ensuring the conduct of the Group business complies with applicable laws, regulations, rules and directives and guidelines;
        • Appointing board committees to address specific issues, considering recommendations of the various board committees and discussing problems and reservations arising from these committees’ deliberations and reports;
        • Ensuring that the statutory accounts of the Company and Group are fairly stated and conform with the relevant regulations including acceptable accounting policies that result in balanced and understandable financial statements;
        • Ensuring that there is in place an appropriate succession plan for members of the Board and senior management;
        • Formalising the Company’s strategies on promoting sustainability, focusing on environmental, social and governance aspects.
        • Ensuring the Group adheres to high standards of ethics and corporate behaviour including transparency in the conduct of business; and
        • Developing and implementing an appropriate investor relations programme or shareholder communication policy for the Company;
    2. Composition and Board Balance
      1. The Board should consist of individuals with diverse experiences, backgrounds and perspectives besides having high standards of professionalism and integrity. The composition and size of the Board is such that it facilitates the making of informed and sound decisions.
      2. The Board should consist of a minimum of two (2) Directors and maximum of fifteen (15) Directors. At any one time, at least two (2) or one-third (1/3), whichever is higher, of the Board members shall be Independent Directors.
      3. The Board shall include an appropriate balance of executive and non-executive directors (including independent non-executive directors) such that no individual or small group of individual will dominate the Board’s decision making process.
      4. The Board shall identify a Senior Independent Non-Executive Director to whom shareholders’ concerns can be conveyed if there are reasons that contact through the normal channels of the Chairman or the CEO/GMD have failed to resolve them.
      5. Where the Chairman of the Board is not an Independent Director, the Board shall comprise a majority of Independent Directors as recommended by paragraph 3.5 of the MCCG 2012.
    3. Appointments
      1. Appointment of a new Director is a matter for consideration and decision by the full Board upon appropriate recommendation by the Nomination Committee.
      2. Newly appointed Directors are expected to declare their time commitment to the Board, and to notify the Chairman of the Board if they sit in other listed corporations as a director.
      3. Directors who wish to accept new appointments to the Board of other listed corporations are required to notify the Chairman and Company Secretary as soon as practicable.
      4. The number of directorships in listed corporations held by any Board member at any one time shall comply with the LR.
      5. The Company shall provide an orientation and education program for new directors to the Board as an integral element of the process of appointing new directors. Every new director shall be given a comprehensive understanding on the operations of the Company.
    4. Re-election
      1. All Directors shall be subject to retirement by rotation at least once in every three (3) years in accordance with the LR, the Companies Act and the Company’s Articles of Association.
      2. The Director should meet the following criteria set by the Nomination Committee for recommendation on re-election of retiring directors:-
        • Minimum meeting attendance and training as required by the LR.
    5. Director’s Training
      1. Every director shall undergo continuous trainings to equip himself to effectively discharge his duties and refresh competencies by participation in:-
      2. Every Director is required to attend minimum one (1) training programmes in a financial year.
      3. Every director shall undertake the Mandatory Accreditation Programme (“MAP”) as prescribed by Bursa Malaysia Securities Berhad Listing Requirements.
    6. Board Meetings and Procedures
      1. The Board shall meet at least four (4) times a year or more frequently when necessary, with timely circulation of notice of meeting and agenda at least 7 days before the meeting. The Board should record its deliberations and the decisions and resolutions carried at the board meetings. The Board should review the minutes to ensure the completeness and accuracy of the minutes.
      2. The Company shall provide to all Directors with timely and quality information and in the form and manner appropriate for them to discharge their duties effectively; and the Board members, where necessary may consult with experts and professionals for advice at the expense of the Company.
      3. Full and comprehensive Board papers shall be circulated to all Directors well in advance of each Board Meeting.
      4. A formal schedule of matters should be reserved for the Board’s deliberations and decisions to ensure the direction and control of the company is firmly vested in the Board. The formal schedule of matters, amongst others, shall include:
        • Review and approve strategic direction and business plans.
        • Review and approve the financial statements of the Group for timely lodgement and release to relevant authorities and market.
        • Review major risks and relevant measures deployed by management to address the risks.
        • Establish and delegation of power to board committees and management team.
        • Review and approve corporate exercise, restructuring plans, capital expenditure, disposal of capital items, funding requirements.
        • Review and consider succession plan, evaluation of board and board committees and individual directors based on recommendations of Nomination committee.
        • Review recommendation from remuneration committee on remuneration packages of directors.
        • Review Group budgets.
        • Review and ratify the related party transactions and recurrent related party transactions.
        • Approve the appointment and resignation of directors, company secretary, auditors.
    7. Code of Ethics and Conduct

      The Company has adopted the Code of Ethics as prescribed by the Companies Commission Malaysia for Company Directors and a separate Code of Conduct for Directors.

    8. Gender Diversity Policy

      The Company does not practise any gender biasness as both genders are given fair and equal treatment. Any new appointments to the Board shall be based on merits without fulfilling any gender quotas.

  4. CHAIRMAN AND GROUP MANAGING DIRECTOR/CEO

    The Company shall aims to differentiate between the Chairman and the GMD/CEO (GMD or CEO) with a clear division of responsibility between running of the Board and the Company’s business. The positions of Chairman and GMD are separate and clearly defined.

    1. Chairman
      The Chairman is responsible for leadership of the Board in ensuring the effectiveness of all aspects of its role.
    2. Group Managing Director/CEO
      The GMD is the conduit between the Board and the Management in ensuring the success of the Company’s governance and management functions.
  5. BOARD COMMITTEES

    The Board may delegate their powers and duties to the following Board committees which shall operate within defined terms of reference in accordance with the requirements of the LR.

    1. Audit Committee
    2. Nominating Committee
    3. Remuneration Committee
  6. FINANCIAL REPORTING
    1. Transparency
      1. The Company aims to present a clear and balanced assessment of the Group’s financial position and future prospects that extends to the interim and price-sensitive information and other relevant reports submitted to regulators.
      2. The Directors ensure that the financial statements are prepared so as to give a true and fair view of the current financial status of the Company in accordance with the approved accounting standards.
      3. The Company’s practice is to announce its quarterly financial results to Bursa Securities as early as possible within two (2) months after the end of each quarterly financial period.
      4. The Auditors’ Report shall contain a statement from the Auditors explaining their responsibility in forming an independent opinion, based on their audit, of the financial statements.
    2. Company Auditors
      1. The Board has established formal and transparent arrangements for considering how financial reporting and internal control principles will be applied and for maintaining an appropriate relationship with the Company Auditors through its Audit Committee.
      2. The Audit Committee also keeps under review the scope and results of the audit and its cost effectiveness and the independence an objectivity of the Company Auditors. The Company ensures that the Company Auditors do not supply a substantial volume of non-audit services to the Company.
      3. The Audit Committee shall review and monitor the suitability and independence of external auditors annually by establishing/adopting of policies and procedures:
        • in governing circumstances for contracts of non-audit services to be entered with external auditors and procedures that must be followed by the external auditors;
        • to assess the suitability and independence of external auditors;
        • to obtain written assurance from the external auditors confirming that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.
      4. Appointment of the Company Auditors is subject to approval of shareholders at general meetings. The Company Auditors have to retire during the AGM every year and be re-appointed by shareholders for the ensuring year.
    3. Internal Controls and Risk Management
      1. The Board recognises the importance of sound internal control in the Company and with this regards, the Board ensures that there is an on-going process for identifying the level of risk tolerance and managing significant risks faced by the Group. The Board believes that maintaining a sound system of internal control is based on a clear understanding and appreciation of the following key elements:
        • Determining the Company’s level of risk tolerance and activity identified, assess and monitoring the key business risks to safe guard shareholders’ investments and the Company’s assets;
        • Commitment to articulate, implement and reviewing the Company’s internal control systems;
        • Periodic testing of the effectiveness and efficiency of the internal controls procedures and processes to be conducted to ensure that the system is viable and robust.
      2. A risk management structure outlines the responsibilities of the risk management committee (“RMC”) has been established to carry out the following functions:
        • RMC assess significant risks which could potentially affect the strategic and perational objectives of the Company and the RMC charted the corrective measures required to mitigate those risk identified.
        • RMC met twice during the financial year to review and update the Company’s principal risk.
        • Progress of RMC activities and Risk Register are updated to the Board by the Management for information and deliberation.
    4. Internal Audit Function

      The Company outsourced its internal audit function to a firm of consultants which provides the board with the level of assurance required on the adequacy and integrity of the internal control system. The internal audit function adopts a risk-based approach, focusing mainly on key processes and principal risk areas of the operating units.

      The objectives of the assignment are to independently review the system of internal control as established by Management and make appropriate recommendations for improvement. Two cycles of internal audit were completed for each financial year under review, and findings from the internal audit had been communicated to the Audit committee for review and endorsement.

      The Audit Committee considers the internal audit report and Management’s responses, before reporting and making recommendations to the board in strengthening the risk management and internal control systems.

  7. INVESTOR RELATIONS AND EFFECTIVE COMMUNICATION
    1. The Board recognizes the need for effective investor relation and communication with shareholders, stakeholders, financial analysts by providing them with relevant information affecting the Company. The Company adopts an open and transparent policy in respect of its relationship with these stakeholders and ensures timely release of information to shareholders in accordance to the LR of Bursa.
    2. The Company adopts an open and transparent policy in respect of its relationship with these stakeholders and ensure timely release of information to through the following ways and means:-
        • Constructive engagements with shareholders and financial analysts about performance, corporate exercises and other matters affecting shareholders’ interests;
        • Press conference and release of press statement after General Meetings (if any);
        • Company’s website updated as per the LR.
      1. Appointment of the Company Auditors is subject to approval of shareholders at general meetings. The Company Auditors have to retire during the AGM every year and be re-appointed by shareholders for the ensuring year.
  8. GENERAL MEETINGS
    1. The Company regards the general meetings as the principal forum for dialogue with shareholders and aims to ensure that the general meetings provide an important opportunity for effective communication with, and constructive feedback from, the Company’s shareholders.
    2. General meetings provide avenues for shareholders to exercise their ownership rights. The Board shall facilitate the exercise of these rights and take reasonable steps to encourage shareholders participation at general meetings, by serving notices for meetings earlier than the minimum notice period required by law and regulation. The board shall disclose all relevant information to shareholders to enable them to exercise their rights by attending to the general meetings and vote in the appropriate manner.
    3. The Board would encourage poll voting on substantive resolutions and make an announcement of the detailed results showing the number of votes casted for and against each resolution. The chairman of the meetings shall inform shareholders of their rights to demand a poll vote at the commencement of the general meeting, if necessary.
  9. SOCIAL RESPONSIBILITY AND SUSTAINABILITY

    The Board partakes in formulating strategies that promotes sustainability and stakeholders’ interests. In this regards, the needs and interests of stakeholders are taken into consideration.

    1. Employees
    2. Employees are invaluable assets of the company and play a vital role in assisting the company to achieve its vision and mission. The Company endeavours to provide a conducive working environment in their workplace by enforcing and adhering to Occupational Safety and Health measures with the objective of ensuring a secured, safe and healthy workplace for all employees. Safety consciousness must be instilled in all operations.

    3. Environment
    4. The board acknowledges the need to safeguard and minimize the impact of the Company’s operations on the environment in the course of achieving the company’s objectives. The board supports initiatives on environmental issues, and the Group adopts a comprehensive environmental management system as part of its commitment to protect the environment and contribution towards sustainable development.

    5. Social Responsibility
    6. The company should play an important role in contributing towards the welfare of the community in which it operates, and shall continuously identify opportunities supporting charitable causes and initiatives in community development projects.

  10. WHISTLE BLOWING

    The Company encourages its employees and other stakeholders (shareholders, suppliers, customers, partners, business associates) to report genuine concerns about any malpractice, misconduct, unethical behaviour, violation of code of conduct, illegal acts or failure to comply with regulatory requirements which they may become aware. The Company assures that the whistle blower will be protected from any retaliation or adverse impact on his employment or relationship with the Group, provided that the report is made in good faith and without malice.

    In the case of employee, any concern should be raised with his immediate superior and in the case of stakeholder, with the immediate superior of the employee concerned. If the above is not possible or appropriate for any reason, then concern should be reported to the Senior Independent Non-Executive Director.

    All reports should be investigated promptly by the person receiving the report and promptly report to the Management. Investigation report and proposed course of action shall be reported to Audit Committee for deliberation and decision.

  11. APPLICABILITY
    1. This Board Charter sets out the principles and guidelines that are to be applied in practice by the Board and its Board committees and lay down in narrative form the detailed roles, responsibilities and functions of the proponents of good corporate governance in the Company.