CS01 BOARD CHARTER
The Board charter (“Charter”) sets out the roles and responsibilities of the Board, along with certain matters relevant to the operation of the Board.
This Charter is to be assessed, reviewed and updated annually, with the assistance of both the Corporate Services Workgroup and the Company Secretary, in accordance with the needs of the Company and as and when there are changes to the regulations that may have an impact on the discharge of the Board’s responsibilities.
“Board” refers to Board of Directors of Opcom Holdings Berhad.
“Bursa Securities” refers to Bursa Malaysia Securities Berhad.
“Independent Director” is defined under paragraph 1.01 of the Listing Requirements as one who is independent of management and free from any business or other relationship that could interfere with the exercise of independent judgment or the ability to act in the best interest of the Company.
“Listing Requirements” refers to the Bursa Malaysia Securities Berhad ACE Market Listing Requirements.
“Management Letter” is a report issued by the external auditors to report to the Company on any material weakness identified in the accounting or internal control systems and recommendations for improvements.
2. CODE OF CONDUCT OF BOARD
The Malaysian Code on Corporate Governance Guidelines (“MCCG 2012”) issued by Securities Commission serves as a guide to the Code of Conduct of the Board. Refer to the enclosed ‘Appendix 1’ for the Code of Conduct of Board.
3. BOARD RESPONSIBILITIES
The Board is accountable to shareholders for the performance of the Company and the Board members aspire to the highest standards of corporate governance.
Besides carrying out its statutory responsibilities, the Board’s key responsibilities are as follows:
(a) Reviewing and adopting a strategic plan for the Company;
(b) Overseeing the conduct of the Company’s business to evaluate whether the business is being properly managed;
(c) Identifying principal risks and ensuring the implementation of appropriate internal control systems to manage these risks;
(d) Succession planning, including appointing, training, fixing the compensation of and, where appropriate, replacing senior management;
(e) Developing and implementing an investor relations programme or shareholder communications policy for the Company; and
(f) Reviewing the adequacy and the integrity of the Company’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
4. POWERS AND DUTIES OF DIRECTORS
The Companies Act, 2016, determines the powers and statutory duties of Board members. The major functions of the Board include but not limited to the following:
(a) Setting the Company’s values and standards of conduct and ensuring these are adhered to in the interest of all stakeholders;
(b) Approving policies, strategies, budgets, and plans;
(c) Assessing performance against strategies to monitor both the suitability of those strategies and the performance of management and the Board itself;
(d) Reviewing operating information to understand the Company’s position, and approving financial and other reporting;
(e) Identifying areas of significant business risk and ensuring systems and procedures are in place to manage those risks;
(f) Considering management recommendations on key issues – including acquisitions, funding and significant capital expenditure;
(g) Ensuring that the Company acts legally to comply with the relevant laws and regulations to ensure the highest ethical standards are maintained;
(h) Ensuring that the direction and control of the Company is in the hand of the Board by having a formal schedule of matters specifically reserved to the Board for decision. A schedule of matter would be given to the Directors on appointment and it should be kept up to date. The Schedule of Reserved Matters currently applying is attached as ‘Appendix 2’ to the Board Charter.
(i) Appointing, terminating and reviewing the performance of the Executive Director; and
(j) Reporting to shareholders, as the Board acts on behalf of and is accountable to shareholders, the Board seeks to identify the expectations of the shareholders, as well as other regulatory and ethical expectations and obligations.
5. BOARD BALANCE AND INDEPENDENCE
The Board places great importance on the balance of its independent members as they serve as an essential source of impartial and professional guidance to protect the interest of the stakeholders, particularly shareholders.
Size and Structure
(a) No prescriptive rule for optimum Board size.
(b) Factors to consider in determining the appropriate size include business size and scope or geography.
(c) Factors to consider in determining structure include diversity of Board members technical know-how or experience, age, race or gender.
(a) One-third of the Board must comprise of Independent Directors. In the event the Chairman of the Board is a non Independent Director, the majority members of the Board must be Independent Directors.
(b) If a vacancy in the Board results in a non-compliance with the required composition, the vacancy must be filled within two (2) months, but not later than three (3) months.
Assessment of Independent Director
(a) Is not an Executive Director of the Company.
(b) Has not been within the last two (2) years and is not an officer of the Company.
(c) Is not a major shareholder of the Company.
(d) Is not a relative of any Executive Director, officer or major shareholder of the Company.
(e) Is not acting as a nominee of representative of any Executive Director or major shareholder of the Company.
(f) Has not been engaged as a professional adviser by the Company.
(g) Has not engaged in any transaction with the Company.
An independent director who has served on the Board for a period exceeding nine (9) years may continue his/her directorate in the Company as independent member, subject to the approval of shareholders on the relevant resolutions tabled at the AGM of the Company.
6. POSITION DESCRIPTION
Role of Chairman
(a) Heads the Board;
(b) Chairs general meetings of shareholders;
(c) Monitors the workings of the Board, especially the conduct of Board meetings;
(d) Ensures that all relevant issue for the effective running of the Company’s business are on the agenda;
(e) Ensures that quality information to facilitate decision-making is delivered to Board members on a timely basis;
(f) Encourages all directors to play an active role in Board activities; and
(g) Liaises with Executive Director and the Company Secretary and/or Corporate Services Workgroup on the agenda for Board meetings.
Role of Executive Director
(a) Executive Director is, as employee, involved in the day-to-day management of the Company;
(b) Provides leadership, strategic vision and high level business judgment and wisdom; and
(c) The ability to meet immediate performance targets without neglecting long-term growth opportunities of the Company.
Role of Non-Executive Directors
Act as a bridge between management and stakeholders, particularly shareholders, ensuring relevant checks and balances, focusing on shareholders’ and other stakeholders’ interests and that high standard of corporate governance are applied.
7. DISCLOSURE OF DIRECTORS’ INTEREST AND RELATED PARTY TRANSACTION
The “Related Party Transaction Policy and Procedures” refers.
8. APPOINTMENT OF BOARD COMMITTEES
Audit Committee (“AC”)
The Board appoints and ensures the composition of the AC is in the right size relative to the business operation. If a vacancy in the AC results in a non-compliance with the required composition, the vacancy must be filled within two (2) months, but not later than three (3) months.
The AC provides the Board with assurance of the quality and reliability of financial information used by the Board and of the financial information issued publicly by the Company. The AC shall meet at least four (4) times in a year and additionally as required.
(a) Underscores the Board’s commitment to ensure integrity of financial information and reporting;
(b) Increases the emphasis on risk and control of the Company;
(c) Provides an additional and specialised oversight of the financial reporting process by facilitating the discharge of the Board’s responsibility in respect of the timely preparing and issuance of financial statements;
(d) Considers the appointment of the external and internal auditors, the audit fee and any question of resignation or dismissal;
(e) Reviews external and internal auditors’ audit plan;
(f) Convenes private dialogue with external auditor at least twice a year in the absence of the Executive Director and management;
(g) Reviews external auditor’s Management Letter and management’s response to the findings and recommendations; and
(h) Provides a mechanism for the external auditor to assert their independence in the event of a dispute with management.
Nominating and Remuneration Committee (“NRC”)
With the recommendation of MCCG 2012 in regard to the setting up of a Nominating Committee and the amendments to the Listing Requirements in line with the MCCG 2012, the Board had established a NRC, combining the role of both the nominating committee and the existing remuneration committee into one (1) given the role of nominating committee and remuneration committee and the current size of the Board.
The Board appoints its NRC which consists solely of Non-Executive Directors. If a vacancy in the NRC results in a non-compliance with the required composition, the vacancy must be filled within two (2) months, but not later than three (3) months.
The NRC is empowered by the Board through clear defined terms of reference to oversee amongst others, reviewing the Board composition and making recommendations to the Board for appointments of new Directors by evaluating and assessing the suitability of candidates as Board member or Board Committee member by giving due consideration to the required mix of skills, knowledge, expertise and experience, professionalism and integrity that the proposed Directors shall bring to the Board and reviewing the remuneration packages of the Executive Director and Senior Management.
The NRC is also responsible for annual review of the required mix of skills and experience and core competency which Non-Executive Directors should bring to the Board and annual assessment of the effectiveness of the Board as a whole, the Board Committees, the performance of each existing Director and its Independent Directors. The NRC shall meet at least once a year or more frequently as circumstances required.
Employee Share Option Scheme (“ESOS”) Committee
The ESOS Committee is empowered by the Board through clear defined terms of reference to administer and exercise ESOS matters in accordance with By-law. The Board shall appoint the chairman and members of the committee.
If a vacancy in the committee results in a non-compliance with the required composition, the vacancy must be filled within two (2) months, but not later than three (3) months.
The Company currently does not have an ESOS. No officers/employees of the Company participate in any form of ESOS of the Company.
Risk Management Committee (“RMC”)
The Board appoints its RMC to formulate proactive and effective policies to identify, evaluate and manage significant business risks. The Board shall appoint chairman of the RMC. The members of the RMC shall comprise of Workgroup heads in the Company’s group of companies.
The Board sets the policy and risk management framework that govern RMC including risk tolerance level.
Tender Committee (“TC”)
The TC is empowered by the Board through clear defined terms of reference to review all capital investment and capital expenditure of the group of companies valued at RM500,000 and above. The Board shall appoint the chairman and members of the committee.
If a related party involves, TC shall first reports to the Audit Committee before proposing to the Board for approval.
9. INDUCTION OF NEW BOARD MEMBERS
The Chairman and/or Executive Director shall provide an introduction briefing to new members of the Board to ensure:
(a) Understanding of their roles and responsibilities;
(b) The Board’s expectations in terms of their knowledge contribution;
(c) The nature of the Company’s business;
(d) Current issues faced; and
(e) Strategies adopted by the Company.
10. RETIREMENT OF BOARD MEMBERS
Pursuant to Article 127 of the Company’s Articles of Association, one-third of the Board members are subject to retirement from office by rotation such that each Board member shall retire from office once in every three (3) years. If the number is not three (3) or a multiple of three (3), the number nearest to one third shall retire from office such each Board member shall retire from office once in every three (3) years and if there is only one (1) Board member who is subject to retirement by rotation, he/she shall retire.
All retiring Board members are eligible for re-election.
The Board meets at least four (4) times a year and additionally as required.
The Chairman, assisted by Corporate Services Workgroup and the Company Secretary shall ensure:
(a) Notice of meetings together with the agenda and board papers are circulated to all Board committees at least seven (7) days prior to the meeting;
(b) Appropriateness of the agenda content;
(c) Presence of a quorum;
(d) Adherence to the Company’s Memorandum and Articles of Association;
(e) Applicable provision of the Companies Act, 2016, the Listing Requirements and other regulatory requirements; and
(f) Minutes of meeting shall be entered in books kept for that purpose within fourteen (14) days of the meeting date.
12. ACCESS TO INFORMATION AND INDEPENDENT ADVICE
All Board members of the Company have full and unrestricted access to all information, senior key management, Company Secretary and services within the Company.
The Board, or as individual capacity may obtain and/or undertake independent professional advice at the Company’s expense in furtherance of the members’ duties.
13. DIRECTORS’ TRAINING
It is important for Board to keep abreast of regulatory changes and developments in corporate governance through reading and attendance at relevant training programmes. Board members are compulsory to attend at least one internal and/or external workshop or seminars to enable them to effectively discharge their duties. Board members are also encouraged to keep up with broad business trends through the reading of relevant industry and business publications, attending relevant conferences and expositions, and meeting up with authorities, financiers, overseas business party and other who may be a source of useful information.
A list of training attended for the financial year by the Board will be disclosed in the Company’s annual report. Where any of the Board members have not attended any training during the financial year, reasons thereof for each Board member shall be stated.
14. DIRECTORS’ REMUNERATION
The Board will determine the level of remuneration of Board members, taking into consideration the recommendations of NRC.
Non-Executive Board members shall be paid ‘director fee’ and they will also be paid on their responsibilities in Board committees and for their attendances at meetings. The fee, which is subject to the approval of the shareholders, shall be fixed in sum and not by a commission or on percentage of profits/turnover.
15. BOARD AND BOARD COMMITTEES PERFORMANCE ASSESSMENT
The NRC shall assess the effectiveness of the Board and Board committees on annual basis in the immediate quarter after the financial year end. The compiled performance assessment report of the Board and the Board committees shall be presented to the Board for deliberation.
“Board and Board Committees Performance Assessment Policy” refers.
16. APPOINTMENT AND ROLE OF COMPANY SECRETARY
The Board shall appoint the Company Secretary.
The Company Secretary acts as an adviser to Directors and senior executives on regulatory requirements, Listing Requirements and legislations, identify and highlight to the Board the relevant requirements and ensure compliance of the same. The Company Secretary also ensures all appointments of new Directors are properly effected and all necessary information is obtained from the Directors, for both the Company’s own records and for meeting statutory and regulatory requirements.
Functions of the Company Secretary but not limited to as follows:
(a) Compliance with filing and administrative requirements
(b) Assist in implementation of corporate governance
(c) Assist in appointment of new Directors
(d) Support the Board and Chairman
CODE OF CONDUCT OF BOARD
The principle of this code is based on principles in relation to good faith, integrity, responsibility and corporate social responsibility.
This Code of Conduct of Board is formulated to enhance the standard of corporate governance and corporate behaviour with the intention of achieving the following objectives:
(a) To establish a standard of ethical behavioural for directors based on trustworthiness and values that can be accepted.
(b) To uphold the spirit of responsibility and social responsibility in line with the legislation, regulations and guidelines for administrating the Company.
3. CODE OF CONDUCT OF BOARD
In the performance of his/her duties, a director should at all times observe the following:-
(a) Directors must avoid conflict of interest with respect to their fiduciary responsibility;
(b) Directors should have a clear understanding of the objectives and purpose, capabilities and capacity of the Company;
(c) Directors should devote time and effort to attend meetings and to know what is required of the board and each of its directors, and to discharge those functions;
(d) Directors should ensure at all times that the Company is properly managed and effectively controlled;
(e) Directors should stay abreast of the affairs of the Company and be kept informed of the Company’s compliance with the relevant legislations;
(f) Directors should insist on being informed on all matters of importance to the Company in order to be effective in corporate management;
(g) Directors should notify the Board Chairman before accepting new directorship and indication of time to be spent on the new appointment;
(h) Directors should have access to the advice and services of the Company Secretary, who is responsible to the Board to ensure proper procedures, rules and regulations are complied with;
(i) Directors should have access to consultancy of independent adviser and to seek independent professional advice at the expense of the Company;
(j) Directors should at all times exercise his powers for the purposes they were conferred, for the benefit of the Company;
(k) Directors should disclose immediately all contractual interests whether directly or indirectly with the Company;
(l) Directors should neither divert to his own advantage any business opportunity that the Company is pursuing, nor may he use confidential information obtained by reason of his office for his own advantage or that of others;
(m) Directors should at all-time act with utmost good faith towards the Company in any transaction and to act honestly and responsibly in the exercise of his/her powers in discharging his/her duties;
(n) Directors should be willing to exercise independent judgment and, if necessary, openly oppose if the vital interest of the Company is at stake;
(o) Directors should be conscious of the interest of the shareholders, employees, creditors and customers of the Company;
(p) Directors should at all times promote professionalism and improve the competency of Management and employees; and
(q) Directors should ensure the effective use of natural resources, and improve quality of life by promoting corporate social responsibility.
MATTERS RESERVED FOR THE BOARD
Below is the list of matters, which is non exhaustive, reserved for the Board.
Strategy and Business Planning
1. Opcom Group business plan and changes thereon
2. Opcom Group sustainability governance
3. Creation of new business or activities or termination of existing business or activities which significantly change the nature of Opcom Group and any of its businesses
4. Opcom’s corporate identity and brand architecture
5. Opcom Group policies and any revisions or amendments thereto
Finance and Controls
1. Approval of quarterly, annually unaudited and audited financial statements or any audited financial statements for special purposes
2. Declaration of interim dividend and recommendation of final dividend
3. Approval of any significant change in accounting policies and practices of Opcom and its subsidiaries
4. Reports and findings of the external auditors
5. Capitalisation of reserves
6. Write-off, disposal and acquisition of assets/investments/business (in accordance with the limit of authority sets out in the Finance Manual)
7. Limit of authority and any revisions or amendments thereto
8. Opening and closing of bank accounts
9. Writing-off of inter-company transactions or balances (in accordance with the limit of authority sets out in the Finance Manual)
10. Change in mode of operation and cheque signatories of bank accounts
11. Increase / decrease of authorised and paid-up share capital
12. Provision / acceptance of inter-company advances and loans
13. Provision of corporate / financial guarantee and letter of comfort / support
14. Acceptance of working capital credit facilities
15. Creation of financial instruments and derivatives (in accordance with the limit of authority sets out in the Finance Manual)
16. Entering of related party transaction (in accordance with the limit of authority sets out in the Finance Manual and Related Party Transaction Policies & Procedures)
1. Changes to Opcom Group human resources policy and terms and conditions of employment and benefits
2. Changes to Opcom’s organisational or senior management structure that significantly alters the governance or operational direction of Opcom Group
3. Annual salary increment and performance bonus
4. Remuneration, benefits, entitlements and terms of conditions of employment of Executive Directors, key positions of Opcom and its major subsidiaries
5. Payment of long term employment incentives
6. Appointment or termination or resignation of top key positions of Opcom and its major subsidiaries and changes thereafter
7. Succession plan for top key personnel
8. Performance evaluation of Executive Director
Compliance and Support
1. Legal action against any person which will have a significant impact on Opcom Group’s business or long term plan / strategy
2. Settlement of litigation (in accordance with the limit of authority sets out in the Finance Manual)
3. Appointment of power of attorney
4. Appointment of Board and Board Committee members
5. Approval of Opcom Board and Board Committees’ charter, terms of reference and changes thereto
6. Convening of annual general meetings and extraordinary general meetings
7. Key statements for annual reports, prospectuses and circulars to shareholders
8. Changes to Memorandum and Articles of Association
9. Appointment and termination of share Registrars and Company Secretary / Secretarial Agents
10. Change of registered office
11. Appointment of proxy and corporate representative of the Company
12. Change of Company’s name
13. Winding up of Opcom’s business
1. Internal audit charter and any revisions or amendments thereto
2. Opcom Group internal audit plan
3. Opcom Group Internal audit report