This Charter formalises the various roles and responsibilities of the Board, Board Committees and individual Director of Eco World Development Group Berhad with the aim of streamlining and enhancing corporate governance practices towards transparency, accountability, sustainability and integrity in boardroom activities. This Charter was reviewed to reflect the latest amendments made to the MCCG and the Listing Requirements.
This Charter incorporates the Principles, Practices and Guidance of the MCCG, as considered appropriate, the Listing Requirements on corporate governance, certain aspects of the Constitution of the Company and relevant portions of the Act 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.
In this Charter:-
In discharging the above responsibilities, individual Directors are expected to:
Board balance and composition
The Board should consist of qualified individuals with diverse set of skills, knowledge, experiences, cultural background and gender that ensure sufficient diversity and independence in facilitating the deliberation, review and decision making.
Whilst the Company’s Constitution allows for not less than two (2) or more than fifteen (15) Directors, the Board shall examine and determine its size periodically in relation to the effective running of the Company’s business.
The Board shall be helmed by a Chairman, appointed by the Board, and comprise at least two (2) members or one-third (1/3) of the Board, whichever is higher, who are IDs in accordance with the Listing Requirements.
The Board, through the Nomination Committee, shall take steps to adhere to the recommendation in the MCCG whereby, the composition of the Board should comprise a majority of IDs and at least 30% of the Board members comprised women directors, for the purpose of effective oversight of management and also to meet the gender diversity requirement.
The Board undertakes to assess the independence of ID upon his proposed appointment, annually and when any new interest or relationship develops.
In the event that even if a person does not fall within any of the disqualifying indicators enumerated out in Paragraph 1.01 of the Listing Requirements, both the Director and the Board must give effect to the spirit, intention and purpose of the definition of an ID. There must be a conscious application of the test of whether the said Director is able to exercise independent judgement and act in the best interests of the Company.
The tenure of ID shall not exceed a consecutive or cumulative term of nine (9) years. An ID may continue to serve on the Board beyond the nine (9)-year tenure provided the ID is re-designated as a Non-ID. Subject to assessment of the Nomination Committee and with valid justification, an ID may remain designated as ID beyond the consecutive or cumulative term of 9 years, provided shareholders’ approval is obtained.
If the Board wishes to retain an ID after the twelfth (12th) year, the Board must justify and seek annual shareholders’ approval through a two-tier voting process.
The Board shall also identify, from amongst its members, a Senior ID to whom concerns of fellow Directors, shareholders or stakeholders may be conveyed.
The composition of the Board shall be assessed by the Nomination Committee, to ensure the Board is of an appropriate mix of skills, independence, competencies and diversity (including diversity in age, cultural background and gender) to optimise the Board’s performance, as a whole, and align the Board’s capabilities with the Company’s strategic direction.
To enhance Board effectiveness, the Nomination Committee is therefore entrusted by the Board to appraise candidates for directorship, to ensure Directors have the relevant skills, experience, expertise and time commitment, including those who retire and offer themselves for re-election, before recommending to the Board.
Appointment
The appointment of a new Director is a matter for consideration and decision by the Board upon appropriate recommendation from the Nomination Committee. In making the recommendations, the Nomination Committee will consider amongst others, the required mix of diversity in skills, experience, age, cultural background and gender.
In identifying candidates for appointment as Director, the Board does not solely rely on recommendation from existing Board members, Management or major shareholders. The Board may utilise independent sources to identify suitably qualified candidates not limited to source from a Directors’ Registry, open advertisements and independent search firms.
Re-election
The Company’s Constitution provides that every newly appointed Director shall be subjected to re-election at the immediate AGM of the Company after the appointment. Further, one third (1/3) of the Board shall retire from office and be eligible for re-election at every AGM, provided all Directors shall retire once at least in each three (3) years.
Roles of Chairman
The Chairman assumes a leadership role in the Board so as to ensure effective functioning of the Board in the interest of good corporate governance.
The Chairman is primarily responsible for the following:-
The positions of the Chairman and CEO are held by two (2) different individuals to promote accountability and facilitates division of responsibilities between them. In this regard, no one individual can influence Board’s discussion and decision-making. Generally, the Chairman would lead the Board in its collective oversight of management, while the CEO focuses on the business and day-to-day management of the Company.
Roles of President/ Chief Executive Officer and Executive Directors
The CEO, assisted by his fellow EDs, serves as a conduit between Management and the Board and is responsible to spearhead the business through effective implementation of the Company’s strategic plan and policies established by the Board and managing the daily operations of the Company.
Generally, the CEO, assisted by his EDs as the case may be, is responsible to the Board for the following:-
The Board shall receive the following from or through the CEO at its scheduled meetings:-
The CEO and his fellow EDs shall act within all specific authorities delegated to them by the Board.
In discharging the above responsibilities, the CEO can delegate appropriate functions to any member of Senior Management, including EDs, who shall report to the CEO, but remain accountable to the Board.
Roles of Non-Executive Directors
The roles of NEDs largely encompass the monitoring of Company performance and contributing to the development of Company strategy, clarified as follows:-
Roles of Independent Directors
Roles of Senior Independent Director
The Board shall appoint among its members a Senior ID to act as:-
Company Secretary(ies)
The appointment and removal of the Company Secretary(ies) is a matter for the Board, as a whole. The Company Secretary(ies), who is/are accountable to the Board, shall be suitably qualified, competent and capable of carrying out the duties required of the post.
The 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 its Board Committees and to expedite regulatory and governance compliance.
The roles and responsibilities of the Company Secretary(ies) include the following:-
Board Committees
The Board shall establish Committees delegated with specific authority and operating on the Terms of Reference (“TOR”) as approved by the Board to assist the Board in the discharge of its duties and responsibilities. In so doing, the Board should not abdicate its responsibilities and should at all times exercise collective oversight of the Board Committees and Management.
The roles and responsibilities, structure and composition of the Committee as stated in the TORs will be assessed and reviewed as and when necessary to ensure the TORs are in accordance to the MCCG and Listing Requirements.
The composition of each Board Committees shall comply with the relevant requirements as enumerated in the Listing Requirements and MCCG.
The following standing Committees have been established by the Board:-
Audit Committee
The Audit Committee assists and supports the Board primarily in the area of governance structure, financial reporting process by liaising with the external auditors, reviewing and monitoring the Group’s system of risk management and internal control by liaising with the internal auditors.
Nomination Committee
The Nomination Committee assists the Board on matters relating to the selection and assessment of Directors and Board Committees.
Remuneration Committee
The Remuneration Committee assists the Board on matters relating to the remuneration of Directors and management who are under the C-Suite category.
Whistle Blowing Committee
The Whistle Blowing Committee assists the Board to ensure investigation on corporate governance practice or misconduct are carried out using the appropriate channels, resources and expertise.
Board meeting for each year are scheduled in advance prior to the end of the preceding financial year and circulated to the Directors and Senior Management before the beginning of each financial year. The Board meets regularly at least five times in a year. Additional Board meetings will be held as and when required.
The Chairman of the Board may elect a Director from amongst the Board members to preside as Chairman at all Board meetings.
All Directors must meet the minimum 50% attendance requirement imposed by the Listing Requirements. Senior Management who are not directors may be invited to attend and speak at Board meetings on matters relating to their areas of responsibility. The Board may also invite external parties such as the auditors, solicitors and consultants to attend as and when the need arises.
The Directors may participate at a Board meeting by means of telephone and video conference or by means of other communication equipment. The physical presence of Director(s) is not compulsory and participation at such 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 Board meeting.
In the event matters requiring Board’s decision arise between Board meetings, such matters shall be resolved through circular resolution which shall be supported by relevant papers setting out details of the subject matter. Such circular resolution in writing, signed or approved by letter, electronic mail or other electronic communication by a majority of the Directors shall be as valid and effectual as if it has been passed at a Board Meeting. Such resolution may consist of several documents in like form, each signed by one or more Board members.
The Board should be informed of the decision and significant issues deliberated by the Board Committees via the reporting by the Chairman of the respective Board Committees and the minutes of the Board Committees tabled at the Board meetings.
Notice
Except in the case of an emergency, notice of every Board meeting will be provided in writing at least seven (7) clear days before each meeting. 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.
Agenda
The Company Secretary(ies) shall work together with the Chairman in developing the meeting agenda. The agenda shall include, amongst others, matters specifically reserved for the Board’s decision.
Meeting papers
Meeting papers should be clear and comprehensive in order to provide concise information to the Board to facilitate their deliberation and decision making. All Directors are given sufficient time to review the meeting papers prior to Board meetings.
Voting
Every Board Member shall have a right to speak and vote on any matters tabled at the meeting. All matters that are to be decided upon and approved by the Board shall be put to vote and passed by a majority of vote and in case of any equality of votes, the Chairman of the meeting shall have a casting vote.
Minutes
All Board members shall ensure that the minutes of Board meeting accurately reflect the deliberations and decisions of the Board, including any concerns raised by Directors or dissenting views expressed. Any Directors who abstained from voting or deliberation on a particular matter will be recorded in the minutes.
Relationship with Management
The Management is key in collecting, scrutinising and elucidating strategic options to the Board for its review and consideration.
To enable the Board to properly exercise impartial judgement, the Management shall ensure that all information provided by it to the Board is objective, timely, relevant, accurate and complete and the Management will carry out instructions as directed by the Board.
Relationship with Shareholders and Stakeholders
The Board is responsible for ensuring the Group’s strategies to promote sustainability and the rights of other stakeholders are not compromised.
The Board is responsible to develop and implement a communication policy that enables both the Board and Management to communicate effectively with the Company’s shareholders, stakeholders and the general public to facilitate understanding of each other’s objectives and expectations.
The Board shall arrange for the general meeting of the Company to be conducted in an efficient manner, including to consider leveraging technology to facilitate electronic voting and remote shareholders’ participation, to enhance shareholder communications for a greater understanding of the Company’s business, governance and performance.
The Board shall also provide timely and relevant information to shareholders and encourage their active participation at the general meetings, taking into account the following measures:-
All Directors shall have unrestricted access to Management and to information pertaining to the Group, including access to the Company Secretary, Company auditors and consultants, relevant to the furtherance of their duties and responsibilities as Directors of the Company at the expense of Company.
In discharging the Directors’ duties, each Board member is entitled to obtain independent professional advice at the cost of the Company.
Directors 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, accounting and auditing standards, tax budgets, rules and regulations etc, in order to update their knowledge and skills to sustain their active participation in Board deliberation and effectively discharge their duties.
Directors 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.
A 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 Act. 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 Act.
NEDs will be paid a remuneration comprising of fees and benefits for acting as Directors of the Company, subject to approval by shareholders at a general meeting. NEDs who are Shareholders should abstain from voting at general meeting to approve their fees.
The remuneration of EDs shall be recommended by the Remuneration Committee with the individual Director concerned abstaining from discussing his individual remuneration.
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 Board meeting.
Company Secretaries are authorised to collate the results of the evaluation process before tabling to the chairman of Nomination Committee and Board, to ensure integrity and independence of the appraisal process.
The 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.
The Board will periodically review this Charter and may be amended from time to time to ensure its relevance, effectiveness and consistent with the Company’s objective, its practices and current laws.
This Charter was adopted by the Board on 12 December 2018 and was revised on 6 February 2020.
Note:-
Should the Listing Requirements and the Act be amended for any reason whatsoever, the amendments of which affects the contents of this Charter, the amended Listing Requirements or the Act shall take precedent over this Charter.