The Committee shall be appointed by the Board of Directors and shall consist of not less than three (3) members, a majority of whom should be non-executive directors.
The office of a Committee member shall automatically be vacated when he ceases to be a director.
In the event of any vacancy in the Committee resulting in the non-compliance of the above, the Company must fill the vacancy within three (3) months.
The Board of Directors must review the term of office and performance of the Committee and each of its members at least once every three (3) years to determine whether such Committee and members have carried out their duties in accordance with their terms of reference.
The Chairman shall be elected by the Committee from amongst their members.
If the Chairman is not present at a meeting within fifteen (15) minutes after the time appointed for holding the meeting, the members of the Committee may elect any other member present to be the chairman of the meeting.
- *The Company Secretary or her nominee shall act as Secretary of the Committee and shall be responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it prior to each meeting.
The Secretary or her nominee shall attend each Committee meeting and record the proceedings of the meeting and minute the resolutions.
- * The Secretary shall also be responsible for keeping the minutes of meetings of the Committee and circulating them to the Committee Members. The Committee Members may inspect the minutes of the meeting at the Registered Office of the Company.
- * The Committee shall meet at least once a year and hold additional meetings as and when necessary depending on the level of responsibility and complexity of the Group.
- * The Members may participate in a meeting by means of telephone conference, v i d e o conference or any similar or other communication equipment by means of which all persons participating in the meeting can hear each other. Such participation in a meeting shall constitute presence in person at such meeting.
- * The quorum for a meeting shall be two (2) members. The Committee at which a quorum is present is considered to be competent for the exercise of its authorities, powers and discretions vested upon it.
- * All decisions at such meeting shall be decided on a show of hands and based on a majority of votes. The Chairman shall have a casting vote.
- * Meetings of the Committee shall be called by the Secretary of the Committee at the request of the Chairman of the Committee. Notice of each meeting confirming the venue, time and date, together with an agenda of items and its supporting papers to be discussed, shall be forwarded to each member of the Committee, five (5) working days before the date of the meeting.
The Committee shall have the right to invite other Directors, Management and consultants as applicable to participate in the Committee meetings, as and when necessary, to carry out its responsibilities.
- * The Secretary or his/her nominee shall minute the proceedings and resolutions, including the names of all attendees. Draft minutes of meetings of the Committee shall be circulated promptly to all members of the Committee.
- The Committee may establish procedures from time to time to govern its meetings, keeping of minutes and its administration.
- Duties and Functions
The main functions and duties of the Committee shall include, but are not limited to the following:-
- Consider and recommend to the Board of Directors candidates for directorships, proposed by Management, a Director, a shareholder or independent sources, taking into consideration the candidates’ skills, knowledge, expertise and experience, time commitment, character, competence, professionalism and integrity. For the position of independent non-executive directors, the Committee should also evaluate the candidates’ ability to discharge such responsibilities as expected from independent non- executive directors;
- * When identifying suitable candidates, t h e Committee shall evaluate the balance of skills, knowledge, experience and board diversity (including gender diversity) and the current and future needs and size of the Company. Accordingly, the Committee may:-
- Use sources to identify suitable candidates to facilitate the search from diverse pools;
- Consider candidates from a wide range of backgrounds;
- Consider candidates on merit and against objective criteria with due regard for diversity including gender, ethnicity and age, and appointees time commitment, skill and experience; and
- Request disclosures of any business interests that may result in a conflict of interest.
- Recommend to the Board of Directors, candidates to the board committees and Chairman of those committees.
- Consider and recommend to the Board of Directors the candidates for CEO and Chief Financial Officer (“CFO”), taking into consideration the candidates’ skills, knowledge, expertise and experience, time, commitment, character, professionalism, integrity and management diversity.
Re-election, Re-appointment and Resignation/ Termination
- Recommend to the Board of Directors, candidates for re-election of directors by shareholders under the annual re-election provisions or retirement, with due consideration of the directors’ expertise, skills, knowledge and experience with those of other Board Members, as well as their roles as Committee Members.
Attention should be paid to independent directors who are retained beyond nine (9) years as the Board of Directors has to provide strong justification in exceptional circumstances and seek shareholders’ approval. In obtaining the shareholders’ approval, the Committee should assess the independent directors(s) and recommend to the Board of Directors whether the independent director(s) should remain independent or be re-designated;
- Deal with the matters relating to the continuation in office of any director at any time, including the suspension or termination of service of an executive director as an employee of the Company, subject to the provisions of the law and their service contract;
- Review the re-appointment of any non-executive director at the conclusion of his term of office having given due regard to his performance and ability to continue to contribute to the Board of Directors in terms of knowledge, skills and experience required;
Specific Nominations and Succession Planning
The Board of Directors should work with the Committee to evaluate potential successors, considering the challenges and opportunities faced by the Company, and the skills and expertise, including diversity, needed on the Board composition of Directors in the future;
- Understand the current performance, competencies and potential of those in key positions in Senior Management in order to identify and develop plans for those key talents.
- Recommend to the Board of Directors, the succession plans for board chairman, directors and key Management personnel, particularly for both executive and non-executive directors and the re-appointment of any non- executive director at the conclusion of his or her specified term of office.
- Establish a clear succession plan for board chairman, directors and senior Management, considering succession planning in the course of its work, considering the challenges and opportunities facing the Company, and the skills and expertise needed on the Board of Directors and by the Company in future.
In terms of Senior Management, the Committee may request from time to time detailed views (either in the form of a report or otherwise) and work together with the CEO and/or Senior Management of the Company to:-
- identify expected critical position vacancies and determine any future critical positions; and
- identify gaps in current employees and develop individual development plans, coaching and monitoring programmes.
Annual Performance Assessment of Board, Committees and Individual Directors
Size of Board of Directors and Independent Directors
- Annually review the required mix of skills, experience, diversity and other qualities, including core competencies and effectiveness of the Board, as a whole, the Board Committees and the contribution of each individual directors. All evaluations carried out by the Committee in the discharge of its functions should be properly documented. This process should be coordinated by the Committee, with the assistance of the Secretary, and the findings reported to the Board of Directors at the end of each financial year with an assessment of the Board’s performance and areas in which the Board, Board Committees or individual Director could improve;
- Annually review the time commitment of non-executive and independent directors. Performance assessments should be undertaken to assess whether the directors are spending adequate time to fulfill their duties;
- Evaluate and appraise the performance of the Chairman of the Board.
- Annually review the independence of the independent director and recommend to the Board of Directors whether the independent director(s) who has (have) exceeded the cumulative term of nine (9) years should remain independent or be re-designated;
- Annually review the performance of the CEO and CFO; and
- Annually review the term of office of the Audit Committee (“AC”) and each of its members to determine whether the AC has carried out their duties in accordance with their terms of reference.
In developing its procedures and making recommendations to the Board of Directors, the Committee will take into account of:-
- Assess the desirable balance in Board of Directors membership by reviewing the size, structure and composition of the Board of Directors.
- Assess desirable number of independent directors; and
- Consider the representation of interest groups as part of boardroom diversity. Factors to consider may include gender, race, religion, nationality, professional background and culture.
- The provisions of the Company’s Memorandum & Articles of Association or Constitution, the Companies Act 2016, ACE Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and other laws and regulations, if any, in respect of the appointment, removal, etc of directors;
- The need for the Board of Directors to operate an open and transparent appointment process. This may include engaging independent sources for the appointment process;
- The overall composition and balance of the Board of Directors.
Continuous Education / Development
- Identify suitable orientation, educational and training programmes for continuous development of Directors and ensure all Directors receive appropriate continuous trainings programme in order to keep abreast with developments in the industry and with changes in the relevant statutory and regulatory requirements.
- Assess the AC members’ knowledge on financial literacy.
- Recommend and advise the Board of Directors on the remuneration and terms of conditions (and where appropriate, severance payments) of the Executive Directors (including the Chief Executive Officer (“CEO”)), ensuring that remuneration is set at a competitive level for similar roles within comparable markets to recruit, attract, retain and motivate high caliber individuals and structured so as to align their interest with those of the Company and shareholders.
- Establish a formal and transparent procedure for developing a framework or policy on remuneration packages of individual directors, taking into consideration the following:-
- In case of Executive Directors (including the CEO), the component parts of remuneration should be structured so as to link rewards to corporate and individual performance;
- In the case of Non-Executive Directors, the level of remuneration should reflect the experience and level of responsibility undertaken by the Non- Executive Director concerned.
- Monitor structures and levels of remuneration for other senior executives and make recommendations, if appropriate, to ensure consistency with the Company’s remuneration objectives.
- Approve any major changes to employee compensation and benefits arrangements applicable to the Executive Director(s) and senior management.
- Approve incentive plans for the Executive Directors and senior management, and any amendments to such plan.
- Carry out other responsibilities, functions or assignments as may be defined by the Board of Directors from time to time.
- Establish and review the benefits in all its form for the Executive Directors, Non- Executive Directors, CEO and key management positions under the employment within the Group.
- Review and approve annual salary increment and bonuses for the Executive Directors, CEO and key management positions under the employment of the Group.
- Obtain external advice, where necessary, on benefits for the Executive Directors, Non-Executive Directors and key management positions under the employment of the Group.
- Review the performance of, and recommend to the Board of Directors the total annual remuneration package (guaranteed pay, short and l o n g -term incentives and any compensation payable for loss or termination of office or appointment) of individual Executive Directors and Senior Management;
Determination of remuneration packages of directors, should be determined by the Board of Directors as a whole and the individuals directors concerned (whether executive or non- executive) should abstain from discussing and from participating in decisions of their own remuneration packages.
The Chairman of the Committee should attend the Shareholders’ Meeting to answer any questions from the shareholders on the Committee’s activities, in particular on areas pertaining to proposed resolutions for shareholders to consider on the appointment of re-appointment of directors or the retention of an independent director who has served the Company for more than a cumulative term of nine (9) years.
The Chairman of the Committee shall report to the Board of Directors on its proceedings after each meeting of the Committee. The Committee shall make recommendations to the Board of Directors as appropriate on any area within its responsibility or as delegated by the Board of Directors, where action or improvement is needed. The Committee shall produce a report to be included in the Company’s annual report about its activities and the process used to identify and make appointments.
Access to Advice
In furtherance to their duties as the Committee’s members of the Company, the Committee shall have access to resources and information as deemed appropriate for the discharge of its responsibilities to the Company, including obtaining independent professional advice at the Company’s expense.
The Committee shall be entitled to the services of a C ompany S ecretary who must ensure that all appointments are properly made, that all necessary information is obtained from Directors, both for the Company's own records and for the purposes of meeting statutory obligations, as well as obligations arising from the ACE Market Listing Requirements of Bursa Securities or other regulatory requirements.
- Terms of Reference
The terms of reference should be assessed, reviewed and updated at least once every three (3) years by the Committee or as and when there are changes to the Malaysian Code on Corporate Governance and the ACE Market Listing Requirements of Bursa Securities that may have an effect on the Committee’s responsibilities.
The Committee should recommend any change to the terms of reference to the Board of Directors for approval.