1.0 STATEMENT OF POLICY
The Board of Directors of Pinehill Pacific Berhad (“the Company") is appointed by its shareholders to supervise the management of the business and affairs of the Company. The prime stewardship responsibility of the Board is to ensure the viability of the Company and to ensure that it is managed in the best Interests of the shareholders, including securing sustainable long-term financial results and increasing shareholder value, with proper social and environmental considerations. Hence, the Board should collectively have sound and sufficient knowledge and expertise to enable effective governance and oversight.
The Board has the following principal roles, which facilitate the discharge of the Board’s stewardship in the pursuit of the best interest of the Company:
Reviewing and adopting a strategic plan for the Company
Overseeing the conduct of the company's business to evaluate whether the business is being properly managed
Identifying principal risks and ensure the implementation of appropriate systems to manage these risks
Succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing senior management
Developing and implementing an investor relations programme or shareholder communications policy for the company
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, rates, directives and guidelines
2.0 BOARD COMPOSITION
2.1 Selection of Members
The Board maintains an overview of the experience expected of the new Directors. It reviews candidates proposed by the Remuneration and Nomination Committee ('RNC"). The size of the Board is dictated by the Company‘s Constitution, which currently permits a maximum of twelve (12) Directors to be appointed to the Board.
On appointment of new Director, the new Director is required to commit sufficient time to attend to the Company’s meetings/matters before accepting his/her appointment to the Board.
In accordance with the Malaysian Code on Corporate Governance 2017 (“the Code”), Directors are required to notify the Chairman before accepting any new Directorship and to indicate the time expected to be spent on the new appointment.
On boardroom diversity, the Board is supportive of the gender boardroom diversity recommended by the Code. The Board through the RNC will review the proportion of the female to male board members during the annual assessment of the Directors' performance taking into consideration the appropriate skills, experience and characteristics required of the Board members, in the context of the needs of the Group.
The Board will periodically evaluate the performance of the Directors for re- appointment or retirement from the Board. The assessment and evaluation process are delegated to the RNC.
2.2 Membership Criteria
Board members must have an appropriate mix of skills, knowledge and experience in business and an understanding of the regions in which the Company operates, including the ability to provide stewardship over the Company’s business.
To ensure effectiveness of the Board, members should be from diverse backgrounds, with knowledge and experience in different pertinent disciplines which may include finance, accounting, legal, business management, information technology and investment management. They should also possess strategic thinking and leadership skills and are dynamic and responsive to the business environment. In addition, they should have knowledge of regulatory requirements, and risk analyses and control.
2.3 Independent Directors
The number of independent directors on the Board and the determination of independence status shall be determined by the Board and guided by the relevant legislation and regulations.
Pursuant to the Main Market Listing Requirements (“Main LR’), at least two (2) Directors or one third of the Board must be independent.
An Independent Non-Executive Director is independent of management and free of any significant business or other relationships that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgment, and who otherwise meet the criteria for independence.
The Independent Directors provide independent judgement, experience and objectivity without being subordinated to operational considerations. The views of Independent Directors should carry significant weight in the Board’s decision-making process.
The key roles of an Independent Directors include:
Support the skills and experience of the Executive Directors;
Provide unbiased and independent views, advice and judgement in order to safeguard the interest of minority shareholders;
Contributing to the formulation of policy and decision-making through their knowledge and experience of other businesses and sectors; and
Ensure that strategies proposed by the management are fully deliberated and examined, taking into account the long term interest of the shareholders, employees, customers and the many communities in which the Group conducts its business.
The Board undertakes to assess the independence of the Independent Directors on an annual basis. Notwithstanding, each Director is expected to advise the Chairman immediately if he/she may no longer be independent. Should the Chairman or any other Director have any concern about the independence of a Director, they must immediately raise the issue with that Director and, if the issue is not resolved, with the Board.
2.4 Executive Chairman
The Executive Chairman represents the Board to the shareholders. The Executive Chairman is responsible for ensuring the integrity and effectiveness of the Board and will consult with the Board promptly over any matter that gives him cause for major concern.
The Executive Chairman will act as facilitator at meetings of the Board and ensure that no Board members, whether executive or non-executive, dominates the discussion, and that appropriate discussion takes place and that relevant opinion among Board members are forthcoming.
The key roles and accountabilities of the Executive Chairman include:
Providing leadership for the board so that the board can perform its responsibilities effectively;
Ensuring that the Board plays a full and constructive part in the determination of the Company’s strategies and policies;
Ensuring balance of membership, subject to the Board and shareholder approval;
Organizing information for deliberation at meetings and reviewing agendas for meetings and ensuring that all relevant issues are on the agenda;
Ensuring that all Directors, Executive and Non-Executive alike, are enabled and encouraged to play an active part in the meeting so as to bring to the Board a healthy level of deliberation and independence. This include making certain that Directors, especially Non-Executive Directors received timely, relevant information tailored to their needs and that they are properly briefed on issued arising at Board meetings;
Ensuring that Executive Directors look beyond their executive function and accept their full share of responsibilities of governance; and
Ensuring that every board resolution is put to a vote to ensure that it is the will of the majority and not that of the dominant owner that prevails.
Leading the board in establishing and monitoring good corporate governance practices in the company.
2.5 Group Executive Vice President
The Group Executive Vice President is accountable to the Board for the achievement of the Company’s goals and for the observance of the management authorities.
The Group Executive Vice President shall be the head of the Management of the Company and the Group and in that capacity is answerable to the Board.
The key roles of the Group Executive Vice President, amongst others, include:
Overseeing the running of the business operations;
Implementing policies and strategies adopted by the Board with the aim to achieve corporate objective;
Exploring new business opportunities/ventures for the Group;
Consistently find means to improve and achieve the Group’s performance target;
Keeping board fully informed of all important aspects of the Group’s operations and ensuring sufficient information is distributed to the board members;
Ensuring compliance with all relevant legislation and regulations by reviewing policies and monitoring compliance; and
Developing and maintaining effective relations with significant agencies, investing public and other trade associations and institutions.
The Group Executive Vice President is supported by the Management team, whose roles and accountabilities shall include:
Make and implement operational decisions within the limits set by the Board;
Carry out the day-to-day operations and control of the business of the Company;
Assist the Group Executive Vice President in exploring new business opportunities/ventures for the Group;
Assist the Group Executive Vice President in finding means to improve and achieve the performance target of the Company and its subsidiaries (‘the Group”); and
Collect information of the business environment, propose policies and strategies for consideration of the Board.
Separation of the positions of the Executive Chairman and Group Executive Vice President promotes accountability and with a clear division of responsibilities, ensures a balance of power and authority, such that no one individual has unfettered powers of decision-making.
2.6 Terms of Directors
Generally, the Board members have no fixed term of appointment. Subject to the Company’s Constitution, at each Annual General Meeting, one-third of the Directors for the time being, or if their number is not a multiple of three, the number nearest to one-third, shall retire from office. A Director retiring at a meeting shall retain office until the close of the meeting, whether adjourned or not.
New Board members will only hold office until the next Annual General Meeting at which they will retire and become available for re-election.
The Board does not prescribe a maximum age limit for its Board members.
The tenure of an Independent Director shall not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an Independent may continue to serve on the Board subject to the Director’s re-designation as a Non-Independent Director. Otherwise, the Board must justify and seek shareholders’ approval at Annual General Meeting in the event it retains the Directors as an Independent Director.
3.0 BOARD COMMITTEES
The Board may delegate specified matters to individual members or committees of the Board to oversee critical or major functional areas and to address matters which required detailed review or in-depth consideration. All such committees must be provided with written terms of reference which state clearly the extent and limits of their responsibilities and authority, specifically whether they have authority to decide on behalf of the Board or are to report back to the Board.
The following are the Company’s existing Board committees:
4.0 MEETINGS OF THE BOARD AND COMMITTEES
The Executive Chairman of the Board must ensure that an agenda is carefully prepared prior to the Board meeting, raising issues that require attention, ensuring that proceedings are conducted efficiently and all appropriate matters are addressed accordingly to enhance the Board’s productivity and strengthen its strategic and supervisory role. The Company Secretaries must work with the Executive Chairman and the Group Executive Vice President on preparing the agenda for the Board meeting.
Information and materials, duly endorsed by the Group Executive Vice President and the relevant group functional heads, that are important to the Directors’ understanding of the agenda items and related topics are distributed in advance of the meeting. The Company will provide information on the business, finance and risks of the Company to the Directors on a regular basis as well as on an as-required basis.
The Board shall meet at regular intervals throughout the year. At all meetings of the Board, the Executive Chairman, if present, shall preside. If the Executive Chairman of the Board is absent, the members present at the meeting shall elect a chairman of the meeting.
The secretaries of the Company shall be in attendance and a record of the proceedings shall be kept. Board members may participate in meetings by means of video-conferencing, conference calls, or similar communication with one another.
The meetings of the Board Committees are similarly guided by their respective terms of reference.
4.4 Management at Meetings
Appropriate members of the Management of the Group may be invited to participate and/or make presentations at meetings to allow Directors to gain additional understanding and insight into the Company’s business.
4.5 Written or Circulating Resolutions
A resolution in Writing, signed or assented to by majority of Directors shall be as valid and effectual as if it had been passed at a meeting of the Directors and may consist of several documents in the like form, each signed by one or more Directors.
The expressions “in writing” and “signed” include approval by any such Director by facsimile or other similar means of communication approved by the Directors for such purpose from time to time incorporating, if the Directors deem necessary, the use of security and/or identification procedures and devices approved by the Directors.
The written resolutions of the Board Committee are similarly guided by their respective terms of reference.
4.6 Minutes of Committee Meetings
Minutes of the Committee meetings should be provided to all Directors at the next appropriate Board meeting following the Committee meetings. The Directors are invited to seek clarifications of the issue raised in the Committee meeting.
5.0 BOARD RESPONSIBILITIES
The Board has responsibilities to adhere to the laws of the jurisdiction within which it operates. Management operates within the confines of the rules and regulations and provides the Board with the assurance that they have been duly adhered and complied with. Apart from the above, the Board ensures that it complies with the Constitution of the Company.
The powers and authorities of the Board emanate from the shareholder and shall be exercised within this framework. The Board delegate authority to the Board Committees, Group Executive Vice President and any other bodies as it deems fit for effective management of the Company. Any authority delegated emanates from the Board and is not intended to replace the powers of the Board.
Broadly, the duties and responsibilities of the Board of Directors include but not limited to the following:
5.1 Risk Oversight and Internal Control
In the implementation of the group policies, the Board of Directors should be:
Providing oversight in ensuring that the Company’s risk appetite and activities are consistent with the Group’s strategic intent, the Group and local operating environments, effective internal controls, and regulatory standards;
Developing and instilling a strong risk culture in the Company and exercising prudence and effective corporate governance in risk management;
Understanding the risks associated with the business activities and taking all necessary measure to ensure that such activities are conducted in a safe and sound manner and in line with high standards of professionalism and sound business practice;
Ensuring that comprehensive and adequate written risk management policies and procedures are established and which clearly delineate authority limits and scope of activities;
Reviewing management’s periodic reports on risk exposure, risk portfolio composition and risk management activities, and ensuring that deficiencies are promptly remedied; and
Ensuring that senior management is capable of managing the risk and that they undertake to implement the risk strategy and policy approved by the Board.
5.2 Policy Deliberation
5.3 Business Performance
Ensuring the Company is operated so as to preserve its financial integrity and in accordance with policies approved by the Board;
Approves the annual budget for the Company and conduct periodic review of achievements against the annual budget, as well as review the management’s business action plans;
Institute succession planning by ensuring that there is effective succession plan to grow and retain talents
5.4 Corporate Governance
Conducting reviews of Board and Committee performance, including Directors’ individual contributions;
Ensuring that Directors are provided with relevant continuing education and are updated on changes in laws, regulations and standards.
5.5 Duties of Directors
- Upholding the highest standards of integrity and avoiding positions of conflict of interest between the Company and themselves, their relatives and corporations related to them;
- Abstaining from any decisions which could place or potentially place them in situations of conflict and reporting to the Board at the first instance of any potential conflicts of interest;
- The Directors are expected to:
- attend all board and relevant committee meetings
- Study information and packages provided by management in advance of meetings and be prepared to discuss the contents at the meetings.
- Read all reports and proposals submitted and if in order approve them promptly in writing.
5.6 Matters Reserved for Collective Decision of the Board
The authorities of the Board are specified below. The authorities may be varied from time to time as determined by the Board:
(a) Conduct of the Board
Appointment and recommendation for removal of directors.
Appointment and removal of Company Secretaries
Appointment of Board committees and members
Approval of terms of reference of Board Committees and amendments to such terms.
Appointment of senior executive positions, including that of the Executive Directors and Group Executive
Vice President of the Company and their duties and the continuation (or not) of their service.
- Approval/recommendation of the directors’ fee/ remuneration arrangements for non-executive directors
Approval of the remuneration structure and policy for Executive Directors.
Approval of remuneration packages for Executive Directors.
Approval of any proposed employees’ share option scheme and/or amendments to the scheme, subject to other approvals that may be required by law or regulations.
Approval of business strategy and group operational plan and annual budgets.
Ongoing review of performance against business strategy and group operational plan, including monitoring of key risks and risk management policies and actions.
Approval of capital expenditure above the prescribed amount as may be determined from time to time.
Approval of bad debts write-off in excess of the prescribed amount as may be determined from time to time.
Approval of investment or divestment of a capital project which represents a significant diversification from the existing business activities.
Approval of changes in the major activities of the Company or Group.
Approval of treasury policies and bank mandate.
Approval of the limit of authority for the Company
Approval of interim and annual financial statements
Approval for the release of financial announcements
Approval of the Annual Directors’ Report and Statutory Accounts.
Approval of interim dividends, the recommendation of final dividend and the making of any other distribution.
Adoption of accounting policies.
Review the effectiveness of the Group’s system of internal control. This function is delegated to the Audit Committee which will in turn report to the Board on its findings.
(e) Other Matters
The granting of powers of attorney by the Company.
The entering into of any indemnities or guarantees.
Recommendations for the alteration of the Constitution of the Company.
Alteration of the accounting reference date, registered office and name of the Company.
Purchase of own shares by the Company.
Issue of any debt instruments.
Scheme of reconstruction or restructuring.
Any other significant business decision.
Any other matters requiring the convening of a general meeting of shareholders or any class of shareholders
Any other matters as may be required by the laws or the governing authorities.
Any other matters requiring the Board’s approval under the Limits of Authority of the Company.
6.0 ADMINISTRATIVE MATTERS
6.1 Board Confidentiality
Directors will maintain absolute confidentiality of the deliberations and decisions of the Board and of information received in meetings, except as may be specified by the Executive Chairman or if the information is publicly disclosed by the Company.
6.2 Directors’ Information Kit
Care will be taken to ensure that new Directors understand the roles and responsibilities of the Board and its Committees, as well as the commitment level that the Board expects of its Directors. A Directors’ Information Kit containing information on the Company and Board matters is presented to all new Directors and the enclosed information updated as and when necessary.
6.3 Directors’ Remuneration
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.
The level of remuneration for the Executive Director is determined by the RNC after giving due consideration to the compensation levels for comparable positions amount other similar Malaysian public listed companies.
The Non-Executive Directors will receive a fixed base fee, not by a commission or on percentage of profits/ turnover, as consideration for their Board duties. The aggregate amount of directors’ fees to be paid to Non-Executive directors is subject to the approval of the shareholders at a General Meeting.
6.4 Access to Information and Independent Advice
Directors may access such information and seek such independent advice as they individually or collectively consider necessary to fulfill their responsibilities and permit independent judgement in decision making.
Directors will be entitled to:
Access members of the senior management via the Group Executive Vice President at any time to request relevant and additional information or seek explanations;
Have access to internal and external auditors, without management being present to seek explanations or additional information; and
Seek independent professional advice with the prior consent of the Executive Chairman or two (2) other Directors (one of whom is Non-Executive), which will not be unreasonably withheld or delayed, and which will be at the Company’s expense, subject to the quantum of the professional fees to be incurred shall not exceed RM50,000.00.
6.5 Company Secretary
The appointment and removal of Company Secretary or Secretaries of the Board shall be the prerogative of the Board.
The Secretary is responsible for ensuring that Board procedures are followed, that the applicable rules and regulations for the conduct of the affairs of the Board are complied with and for all matters associated with the maintenance of the Board or otherwise required for its efficient operation.
6.6 Investor Relations and Shareholder Communication
The Company is committed to ensure that shareholders are well-informed of all major developments affecting the State of affairs of the Company. To achieve this, the Company has implemented amongst others, the following:
Timely release of announcements and disclosures to Bursa Malaysia Securities Berhad, which include quarterly financial results, material contract and any other material information that may affect the investors’ decision making;
Encourage full participation of shareholders at all Annual General Meetings to ensure a high level accountability and discussion of the Company’s strategy and goals. The Company will also invite the external auditor to attend the Annual General Meeting and be available to answer shareholders’ questions about the conduct of the audit and the preparation and content of the auditors’ report; and
Shareholders can gain access to information about the Company including the summary of the Group’s investor relation activities and media releases through the Company’s website, www.pinepac.com.my.
6.7 Other Matters
The Board Charter serves to delineate the mission, structure, scope and functions of the Board and duties of the directors. The Board Charter complements the Constitution and the duties required by legislation and regulatory bodies, and does not replace the said requirements. Where ambiguity and/or contradiction arises, the Constitution, legislation and the regulations shall prevail over the contents of the Board Charter.
The provisions of this charter are subject to such revisions by way of modification, addition or otherwise as the Board, may from time to time consider fit.