The Board Charter sets out the role, composition and responsibilities of the Board of Directors (“the Board”) of Econpile Holdings Berhad ( “the Company”).
COMPOSITION OF THE BOARD
- The Board shall comprise of individuals with a wide range of experience, expertise and business acumen necessary to govern the Company. Pursuant to the Company’s Articles of Association, the number of directors of the Company shall not be less than two (2) directors and not more than twelve (12) directors.
- Pursuant to Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board shall ensure at least two (2) or one third (1/3) of the Board, whichever is higher, are Non-Executive Independent Directors (“Independent Directors”). The Independent Directors provide independent judgement, experience and objectivity without being subordinated to operational considerations.
- The size and composition of the Board shall be reviewed periodically in accordance with the needs of the Company.
- In the event of any vacancy in the Board, resulting in non-compliance with regulations on the board composition, the Board must ensure that such vacancy is filled within three (3) months.
- The appointment of a new Director is a matter for consideration and decision by the full Board, upon the recommendation from the Nomination Committee. In making these recommendations, the Nomination Committee shall consider the required mix of skills, experience and diversity, including gender, where appropriate, which the candidate can contribute to the Board.
- The performance of the Board and individual Directors shall be reviewed annually by the Nomination Committee. The cumulative results of annual review shall be used as a guide by Nomination Committee in deciding eligibility for re-election of directors.
- The Board is supported by suitably qualified Company Secretary who has the responsibility of ensuring that relevant procedures relating to the appointment of new directors are properly executed. In accordance to the Company’s Articles of Association, one third (1/3) of the Directors shall retire from office at each Annual General Meeting (“AGM”) and all Directors shall retire from office at least once in every three (3) years but may offer themselves for re-election. Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance with the Companies Act, 1965.
- The tenure of an Independent Director shall not exceed a cumulative term of nine (9) years. In the event that the Director continues to serve the Board, the Board shall seek shareholders’ approval or the said Independent Director will be re-designated as Non-Independent Director.
- Any Director shall seek the approval from the Chairman of the Board before accepting any new directorship in public listed companies. The Director shall give assurance to the Board of his/her continued time commitment to serve the Board and the new appointment shall not be in conflict or compete with the existing appointment. The Chairman is also required to seek approval from the Board before accepting any new directorship in public listed companies.
PRINCIPAL ROLES AND RESPONSIBILITIES OF THE BOARD
- The Directors recognise the key role they play in charting the strategic direction, development and control of the Company. The principal responsibilities of the Board include the following:-
- Reviewing the Company’s strategic plans with a view to ensure that shareholder value is protected and enhanced;
- Overseeing and evaluating the conduct of business of the Company to ensure compliance with legal and regulatory requirements;
- Overseeing the adequate communication to shareholders and relevant stakeholders;
- Overseeing Company’s business operations and financial performance;
- Identifying the main risks associated with the Company and reviewing the procedures and internal control systems to mitigate the risks; and,
- Providing input to succession plans for executive and management roles.
MATTERS RESERVED FOR THE BOARD
Key matters reserved for the Board’s approval shall include but not limited to quarterly and annual financial statements, business expansion and restructuring plans, material acquisitions and disposals, and issuance of new securities.
- CHAIRMAN, GROUP MANAGING DIRECTOR (“Group MD”) AND GROUP CHIEF EXECUTIVE OFFICER (“Group CEO”)
The Board recognises the importance of clear division of responsibility at the head of the Company to ensure a balance of power and authority. The Board adopts the recommendation of Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) that the chief executive officer and chairman shall not be the same person, and the chairman must be a non-executive director. The Group MD and Group CEO hold the primary executive responsibility for the Company’s business performance. The division of responsibilities between the Chairman, the Group MD and the Group CEO is set out below.
Responsibilities of the Chairman
The Chairman is responsible for leadership of the Board and ensuring the Board functions effectively. He is responsible for, amongst others:-
- Ensuring the effectiveness of all aspects of the Board’s role;
- Ensuring the efficient organisation and conduct of Board meetings to ensure that the Board maintains an in-depth understanding of the Company’s businesses and performance;
- Facilitating open and constructive communications between Board members;
- Acting as a mentor and independent sounding board to the Group MD and Group CEO; and,
- Implementing an annual review of the performance of the Board as a whole.
Responsibilities of the Group MD
The Group MD is responsible for running the affairs of the Company under delegated authority from the Board and to implement the policies and strategies set by the Board. The Group MD is responsible for, amongst others:-
- Acting as the primary conduit between the Board and the management to ensure compliance of corporate governance;
- Developing strategic business plans and corporate strategies;
- Providing effective leadership, direction and supervision of the management to achieve the strategic, operational and financial objectives of the Company;
- Ensuring effective risk management system and internal control processes at the Company;
- Ensuring effective communication with shareholders and relevant stakeholders; and,
- Keeping the Board informed of all material developments and issues concerning the Company’s businesses.
Responsibilities of the Group CEO
The Group CEO assists the Group MD in all of the responsibilities stated above. In addition, the Group CEO is responsible for the following, amongst others: -
- Overseeing the day-to-day running of the business, implementation of policies and strategies adopted by the Board, and making of commercial and operational decisions;
- Developing short- and long-term operational plans, acquiring and allocating resources for different projects;
- Managing overall project operations of the Company which includes leading the delivery of projects on time, within budget and in line with quality standards;
- Monitoring the operating and financial results against plans and budgets; and,
- Developing effective risk management system and internal control processes at the Company.
The MCCG 2012 recommends that the Senior Independent Director should chair the Nomination Committee.
The main role of the Senior Independent Director is to act as a sounding Board for the Chairman. If the Board is undergoing a period of stress and/or there is perceived conflict of interest involving the Chairman, the Senior Independent Director is expected to provide leadership and advice to the Board.
In addition, some of the other common roles of a Senior Independent Director include:
- acting as a point of contact for shareholders and other stakeholders with concerns which have failed to be resolved or would not be appropriate through the normal channels of the chairman and/or chief executive; and,
- meeting or speaking to the Chairman regularly and act as a sounding Board for the Chairman.
The appointment and removal of the Company Secretary is a matter for the Board as a whole. The Board recognises the fact that the Company Secretary should be suitably qualified and capable of carrying out the duties required of the post.
The Company 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.
The Board has established the following committees (“the Committees”) to assist it in discharging its responsibilities:-
- Audit and Risk Management Committee;
The committee shall assist the Board in fulfilling its responsibilities relating to financial reporting, risk management and internal control, and reviewing the works of external and internal auditors.
- Nomination Committee; and,
The committee shall assist the Board in nominating new directors, reviewing the composition and size of the Board, and assessing the effectiveness of the Board as a whole, its Committees and the contribution of each Director.
- Remuneration Committee
The committee shall assist the Board in establishing remuneration for Executive Directors, Non-Executive Directors and key management personnel.
The Committees are headed by Independent Directors and operate under defined terms of reference. The Board may delegate specific responsibilities to ad hoc committees from time to time.
- DIRECTORS’ TRAINING AND DEVELOPMENT
In addition to the Mandatory Accreditation Programme as required by MMLR of Bursa Securities, the Directors shall continue to enhance their knowledge and skills through relevant training and development programmes so as to discharge their duties more effectively.
The Board shall conduct at least four (4) meetings per annum with additional meetings to be convened as and when necessary to deal with urgent matters which might arise between scheduled meetings.
The Chairman may request the attendance of any person at the Board meeting who is responsible for, or associated with, a matter included as an agenda item at a Board meeting.
A set of Board papers relevant to the business of the meeting shall be circulated to all Directors at least seven (7) days prior to the said meeting, setting out the matters to be discussed. Urgent papers may also be presented and tabled at the meeting under “other matters” in the agenda.
A member of the Board or of a Committee may participate in the Board or Committee meeting by means of a conference telephone, video, electronic or such other communication facilities which would permit all persons participating in the said meeting to communicate with each other simultaneously and instantaneously.
Senior management personnel and external independent advisors may be invited to attend the Board or Committee meetings to brief and provide professional and objective advice to enable the Board to deliberate and decide on the matters tabled for the Board’s deliberation.
Minutes of the Board and Committee meetings, together with the decisions made by way of resolutions passed are to be duly recorded and circulated to the Board members accordingly.
- The Remuneration Committee is responsible for setting and reviewing an appropriate remuneration policy of the Company.
- The Remuneration Committee shall review each Director’s performance and contribution to the Board and Company before making recommendations to the Board on an acceptable and appropriate level of remuneration for the Board members. The Remuneration Committee may also review and recommend the remuneration of some of the senior management personnel within the Company and its subsidiaries.
- No member of the Board shall decide on his or her own remuneration.
ACCESS TO INDEPENDENT ADVICE
The Directors, collectively or individually, may seek independent professional advice to fulfil their responsibilities at the expense of the Company.
CODE OF ETHICS AND CONDUCT
The Board shall observe the Code of Ethics for Company Directors issued by the Companies Commission of Malaysia which provides guidance on the standards for prudent business practices as well as the standards for ethical behaviour of the Directors.
CORPORATE DISCLOSURE AND SHAREHOLDER COMMUNICATION
The Board shall observe the corporate disclosure framework under MMLR of Bursa Securities and be guided by the Corporate Disclosure Guide issued by Bursa Securities to provide timely and material information of the Company to its shareholders and stakeholders to facilitate their decision-making processes.
The Board shall commit to high standards of transparency and accountability in its communication to shareholders and stakeholders.
The Board shall ensure that Annual General Meeting (the “AGM”) provides the opportunity for effective communication with, and constructive feedback from the shareholders.
Material information of the Company is disseminated via the Company’s annual reports, quarterly financial results and through various disclosures through the Company’s website as well as the official website of Bursa Securities. In addition, the Company also engages in regular dialogue with institutional investors, fund managers and investment analysts.
The Board shall ensure that the Company’s financial statements are prepared in compliance with the applicable accounting standards, and are reliable source of financial information, so as to give a true and fair view of the state of affairs of the Company.
The Board shall endeavour to present a balanced and understandable assessment of the Company’s financial position and prospects.
REVIEW OF BOARD CHARTER
The Board Charter was adopted by the Board on 21 August 2014 and subsequently updated on 26 August 2015 and 25 August 2016. The Board Charter shall be reviewed periodically and updated in accordance with the needs of the Company and any new regulations that may have an impact on the discharge of the Board’s responsibilities.
The Board Charter is accessible at the Company’s website at www.econpile.com