This Board Charter (“Charter”) formalises the various roles and responsibilities of the Board, Board Committees and individual Director of Eco World Development Group Berhad (“Eco World” or the “Company”) with the aim of streamlining and enhancing corporate governance practices towards transparency, accountability and integrity in boardroom activities. The release of the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) by the Securities Commission in March 2012 and amendments to the Main Market Listing Requirements of Bursa Malaysia (“Listing Requirements”) in November 2012 on corporate governance hasten the formalisation of this Charter.
This Charter incorporates the Principles and Recommendations (including Commentaries) of the MCCG 2012, as considered appropriate, the Listing Requirements on corporate governance, certain aspects of the Company’s Articles of Association and relevant portions of the Companies Act 1965 insofar as the duties and responsibilities of Directors are concerned. Whilst this Charter serves as a structured guide, especially for new Directors who are on-board, it shall not be construed as an exhaustive blueprint by Directors on corporate governance matters.
2.1In this Charter:
“Board” means the Board of Directors of the Company;
“Board Committees” means committees established by the Board from time to time, including the Audit Committee, Nomination Committee and Remuneration Committee;
“Bursa Malaysia” means Bursa Malaysia Securities Berhad;
“Business” means the business of the Company and all its subsidiaries;
“Chairman” means the Chairman of the Board and is used in a gender-neutral sense;
“Company Secretary(ies)” means the Board secretary(ies) or the person(s) normally exercising the functions of a Board secretary;
“Directors” means members of the Board;
“Group” means the Company and all its subsidiaries;
“Independent Director” is defined in accordance with Paragraph 1.01 of the Listing Requirements;
“Listing Requirements” means the Main Market Listing Requirements of Bursa Malaysia;
“Management” means the management personnel of the Group; and
“Shareholders” means the shareholders of the Company.
3.1The Board is collectively responsible for the proper stewardship of the Group’s business and the creation of long term shareholder value, whilst taking into account interests of other stakeholders.
3.2The principal responsibilities of the Board are as follows:
3.3In discharging the above responsibilities, Directors are expected to:
3.4To ensure the direction and control of the Company are in the hands of the Board, a formal schedule of matters reserved for the Board’s deliberation and decision is set out in Appendix B of this Charter.
4.1Board balance and composition
4.1.1The Board shall be helmed by a Chairman, appointed by the Board, and comprise at least two (2) members or one-third (⅓) of the Board, whichever is higher, who are Independent Non-Executive Directors (“IDs”) in accordance with the Listing Requirements.
4.1.2The tenure of ID shall be for a cumulative term of nine (9) years since appointment as ID. The ID may continue to serve on the Board beyond the nine (9)-year tenure provided the ID is re-designated as a Non-Independent Director. Where the Board is of the view that the ID can continue beyond the nine (9)-year tenure, it must justify and seek shareholders’ approval. The Board shall also identify, from amongst its members for inclusion in the Company’s Annual Report, a Senior Independent Non-Executive Director to whom concerns of fellow Directors, shareholders or stakeholders may be conveyed.
4.1.3Whilst the Company’s Articles of Association allow for no less than two (2) or more than eleven (11) Directors, the Board shall examine and determine its size periodically in relation to the effective running of the Company’s business.
4.1.4To enhance its effectiveness, the Board shall ensure its members have the relevant skills, experience, expertise and time commitment. The Nomination Committee is, therefore, entrusted by the Board to appraise candidates for directorship, including those who retire and offer themselves for re-election, before recommending to the Board.
4.1.5The composition of the Board shall be assessed by the Nomination Committee, to ensure the Board is of an appropriate mix to optimise the Board’s performance, as a whole, and align the Board’s capabilities with the Company’s strategic direction.
4.1.6Directors shall not sit on the boards of more than five (5) listed issuers and before accepting any new directorship, Directors shall notify the Chairman, the notification of which shall include an indication of time that will be spent on the new appointment.
4.2Roles of Chairman
The Chairman assumes a leadership role in the Board and represents the same to shareholders of the Company. The Chairman is primarily responsible for the following:
4.3Roles of President/Chief Executive Officer and Executive Directors
4.3.1The President/Chief Executive Officer (“President/CEO”), assisted by his fellow Executive Directors (“EDs”), serves as a conduit between Management and the Board and is responsible for the effective implementation of the Company’s strategic plan and policies established by the Board, besides managing the daily operations of the Company.
4.3.2Generally, the President/CEO, assisted by his EDs as the case may be, is responsible to the Board for the following:
4.3.3The Board shall receive the following from or through the President/CEO at its scheduled meetings:
4.3.4The President/CEO and his fellow EDs shall act within all specific authorities delegated to them by the Board.
4.3.5In discharging the above responsibilities, the President/CEO can delegate appropriate functions to any member of Senior Management, including EDs, who shall report to the President/CEO.
4.4Roles of Non-Executive Directors (“NEDs”)
The roles of NEDs largely encompass the monitoring of Company performance and contributing to the development of Company strategy, clarified as follows:
4.5.1The appointment and removal of the Company Secretary(ies) is a matter for the Board, as a whole. The Company Secretary(ies) shall be suitably qualified and capable of carrying out the duties required of the post.
4.5.2The Company Secretary(ies) is expected to provide unimpeded advice and services to the Directors, as and when the need arises, to enhance the effective functioning of the Board and to expedite regulatory compliance.
4.5.3The primary responsibilities of the Company Secretary(ies) include the following:
4.6.1The Board shall establish Committees from time to time to assist the Board in the discharge of its duties and responsibilities. Each Committee has its own terms of reference in writing, specified by the Board, detailing its roles and responsibilities, structure and composition.
4.6.2The following standing Committees, with written terms of reference, have been established by the Board:
4.7The Board’s relationship with shareholders and stakeholders
4.7.1The Board shall maintain a communications policy that enables both the Board and Management to communicate effectively with the Company’s shareholders, stakeholders and the general public.
4.7.2The Board shall arrange for the General Meetings of the Company to be conducted in an efficient manner to enhance shareholder communications. The Board shall also provide timely and relevant information to shareholders and encourage their active participation at the meetings, taking into account the following measures:
5.1.1Meetings shall be conducted at least on a quarterly basis. The Company Secretary(ies) shall prepare and distribute to all Directors in advance a timetable for the meetings for the year. The Company Secretary(ies) shall work together with the Chairman in developing the meeting agenda.
5.1.2Except in the case of emergencies, seven (7) days notice of every Board meeting will be provided in writing. In addition to notices sent through post or by hand, notices may also be sent via facsimile, electronic mail or by any means of telecommunication in a permanent written form.
5.1.3The Chairman of the Board - or in his absence, a Director from amongst the Board members appointed - shall preside at all meetings.
5.1.4Board members are required to attend Board meetings. However, other senior officers may be invited to attend meetings for particular items within their responsibility. The Board may also invite external parties such as the auditors, solicitors and consultants as and when the need arises. Resolutions at any meeting of the Directors shall be decided by a majority of votes.
Resolutions of the Directors at a meeting or adjourned meeting of the Directors shall be adopted by a majority of votes of all Directors present. In the event matters requiring Board’s decision arise between meetings, such matters shall be resolved through circular resolution which shall be supported by relevant papers setting out details of the subject matter. The Board members may obtain more information from Management and express their view points by facsimile, electronic mail or any other means of telecommunication before arriving at a decision on the subject matter. All such resolutions shall be submitted for confirmation or ratification at a meeting of the Board following the passing of the circular resolutions.
5.1.5The Directors may participate at a meeting of the Directors by means of telephone and video conference or by other means of communication. The physical presence of Director(s) is not compulsory and participation at the meeting in the aforesaid manner shall be deemed to constitute presence in person at such meeting. The Directors participating at any such meeting shall be counted in the quorum for such meeting. All resolutions agreed upon by the Directors at such a meeting shall be deemed to be as effective as a resolution passed at a meeting in person of the Directors duly convened and held. All information and documents must be made equally available to all participants prior to, at, or during the meeting.
5.1.6Pursuant to regulatory requirements, a Director shall abstain from deliberation and voting on contracts or proposed contracts or arrangements in which the Director has direct and/or indirect interests.
The Chairman, in conjunction with the Company Secretary(ies), shall assess the type of information needed to be supplied to the Board and the contents of the agenda. The agenda shall include, amongst others, matters specifically reserved for the Board’s decision. The Board shall record its deliberation, in terms of the issues discussed, and the conclusions thereof, in discharging its duties and responsibilities.
5.3.1To allow sufficient time for Directors to consider the relevant information, Board papers and agenda items are to be circulated at least seven (7) days, or a shorter period where unavoidable, prior to the meeting. Where there is a need to table a report, a brief statement of findings and/or recommendations is prepared.
5.3.2Minutes are prepared following a Board meeting. The draft minutes shall be tabled at the following meeting for confirmation and signing.
5.4Access to information
All Directors shall have unrestricted access to Management and to information pertaining to the Company and its subsidiaries, including access to the Company auditors and consultants, relevant to the furtherance of their duties and responsibilities as Directors of the Company.
5.5Independent professional advice
5.5.1In discharging the Directors’ duties, each member of the Board is entitled to obtain independent professional advice with the cost thereof borne by the Company.
5.5.2Where such advice is considered necessary for the discharge of his duties and responsibilities as Director and, for the benefit of the Company, such Director shall first discuss it with the Chairman and, having done so, shall be free to proceed, where appropriate.
6.1Directors are required to undergo the mandatory accreditation programme under the auspices of Bursa Malaysia. In addition, Directors are required to attend relevant training courses or seminars at periodic intervals to keep themselves updated on developments pertaining to the oversight function of Directors as well as technical matters, for example, financial reporting standards, tax budgets, etc. The Nomination Committee shall decide on the continuous education training programme for Directors.
6.2All trainings attended by Directors shall be disclosed in the Annual Report. In special circumstances, valid justifications for non-attendance at any training by Directors for the financial year shall also be disclosed.
7.1A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare the Director’s interest in accordance with the Companies Act, 1965. The Director concerned shall not participate in deliberations and shall abstain from casting votes in any matter arising thereof unless as otherwise provided for in the Companies Act, 1965.
7.2Should there be an actual, potential or perceived conflict of interest between the Company or a related corporation and a Director, or an associate of a Director such as a spouse or other family members, the Director involved shall make full disclosure and act honestly in the best interest of the Company.
7.3Directors shall devote sufficient time to carry out their responsibilities. The Board shall obtain this commitment from its members at the time of appointment. Each Director is expected to commit time as and when required to discharge the relevant duties and responsibilities, besides attending meetings of the Board or Board Committees.
7.4The Company Secretary(ies) shall facilitate the Directors’ annual independence and conflict of interests declarations, which will allow the Directors to perform an annual self-declaration on independence (i.e. for Independent Non-Executive Directors) and conflict of interest (i.e. for all Directors).
8.1NEDs will be paid a fee for acting as Directors of the Company, subject to approval by shareholders.
8.2The remuneration of EDs shall be recommended by the Remuneration Committee with the individual Director concerned abstaining from discussing his individual remuneration. The amount of remuneration payable shall be determined with reference to corporate and individual performance of Directors.
The Nomination Committee is entrusted by the Board to review the performance and effectiveness of the Board and Board Committees, including individual Directors, annually, with the assessment report, together with a report on the Board balance covering the required mix of skills, experience and other qualities of Board members for discussion at the full Board.
10.1The Board shall have relevant corporate disclosure policies and procedures to ensure comprehensiveness, accuracy and timeliness of information disclosed. These policies and procedures shall ensure compliance with the relevant disclosure requirements as enumerated in the Listing Requirements.
10.2The Company shall consider the use of information technology in communicating with stakeholders, including a dedicated section for Investor Relations on the Company’s website. This section shall provide information such as, amongst others, the Board Charter and the Annual Report of the Company.