Board Charter
 
1.0 PURPOSE
 

This Board Charter sets out the roles, responsibilities, processes and functions of the Board of Directors (“the Board”) of Malaysia Marine and Heavy Engineering Holdings Berhad (“MHB” or “the Company”) which reflect the corporate governance structure and practices of the MHB Group.

2.0 BOARD ROLES AND RESPONSIBILITIES
 
2.1 Board Composition
 

The Board ensures that its composition and size meets the requirements of the Company for effective decision making with the benefit of diverse experiences, background, knowledge and expertise. The Board also assesses the Board composition to maintain balance in the Board between Independent Directors and representation from major shareholders.

The number of Directors on the Board shall at all times comply with the Articles of Association of the Company and other regulatory requirements that are in force.

2.2 Role of Board
 

The role of the Board is to provide strategic guidance for the Company and effective oversight of Management. The key responsibilities of the Board are:

  • establishing its strategic intent, strategies and targets;
  • overseeing and evaluating the conduct and performance of the Company and Group;
  • establishing leadership succession plans and overseeing the development of the Group’s human capital;
  • reviewing the adequacy and integrity of the systems of internal controls and risk management of the Group; and
  • overseeing the development and implementation of an investor relations programme or shareholder communications policy for the Company.
2.3 Role of Directors
 

The Independent Non-Executive Directors are independent of management and free from any business or other relationships that could materially interfere with the exercise of their independent judgment. They ensure that the interests of all shareholders are taken into account by the Board and that the relevant issues are given objective and impartial consideration by the Board.

The Non-Executive Directors do not participate in the day-to-day management of the Company and do not engage in any other relationships with the Company so as to ensure that they exercise their judgment in the best interest of the Company.

2.4 Role of Chairman
 

The Chairman of the Board is a Non-Executive Director. The Chairman is primarily responsible to lead the Board. There is a clear division of responsibilities between the Chairman and the Managing Director and Chief Executive Officer (“MD&CEO”).

The Chairman’s responsibilities include:

  • leading the Board in setting the values and standards of the Company;
  • maintaining a relationship of trust with and between the Executive and Non-Executive Directors; and
  • facilitating the effective contribution of Non-Executive Directors and ensuring constructive relations be maintained between Executive and Non-Executive Directors.
2.5 Role of MD&CEO
 

The MD&CEO is responsible for the day-to-day and overall operations of the business, organisational effectiveness and implementation of Board’s strategies and policies. The MD&CEO is the conduit between the Board and Management.

All Board authorities conferred on the Management is delegated through the MD&CEO and this will be considered as the MD&CEO’s authority and accountability.

The MD&CEO is assisted by the Management Committee of the Company in managing the day-to-day business.

2.6 Role of Board Committees
 

The Board may from time to time establish Board Committee as is considered appropriate to assist in carrying out its duties and responsibilities. The following Board Committees have been established with clearly defined terms of reference:

  • Board Audit Committee
  • Nomination & Remuneration Committee
  • Board Bid Committee

The Board Committees are authorised by the Board to deal with and to deliberate on matters delegated to them within their terms of reference.

2.7 Role of Company Secretary
 

The Board appoints the Company Secretary, who plays an important advisory role. The Company Secretary is a central source of information and advice to the Board and its Committees on issues relating to governance practices and compliance with laws, rules, procedures and regulations affecting the Company and the Group.

The Directors have unlimited access to the professional advice and services of the Company Secretary.

3.0 BOARD PROCESSES
 
3.1 Board Meetings
 

The Board meets at least four times annually and additional meetings are held as and when required. The quorum for a Board Meeting shall be three Directors.

3.2 Board Committee Meetings
 

The Board Audit Committee meets at least four times annually. The Nomination & Remuneration Committee meet at least once a year and as and when required whilst the Board Bid Committee shall meet as and when the need arises for deliberation of bid submissions.

3.3 Financial Reporting
 

The Board aims to present a balanced and meaningful assessment of the Company’s financial performance primarily through the annual financial statements and quarterly announcement of financial results. The Board is assisted by the Board Audit Committee to oversee the Company’s financial reporting process and the quality of the financial reporting.

3.4 Non-financial Reporting
 

Non-financial reporting by the Board is made through the annual report sections on Performance Review, Investor’s Overview, Corporate Responsibility and Corporate Governance as well as other announcements by the Company on its website or press statements.

3.5 Decision-making
 

The Board makes decisions based on majority votes with each Director having one vote. In case of an equality of votes, the Chairman shall have a second or casting vote.

3.6 Monitoring
 

The Board monitors the performance of the Company via the reports presented at Board and Board Committee meetings and through regular engagements with the MD&CEO and the Management from time to time.

4.0 BOARD FUNCTIONS
 
4.1 Policy & Strategy
 

Policies and strategies are approved by the Board after due consideration of the various factors related to the businesses of the Company. The Board shall ensure that strategies that are formulated provide guidance and input on the overall strategic direction of the Company.

4.2 Ethics & Compliance
 

The MHB Code of Conduct and Business Ethics (“CoBE”) approved by the Board, is applicable to all employees and Directors within the MHB Group and governs the desired standard of behavior and ethical conduct expected of each individual to whom the CoBE applies. Benchmarked to international standards, CoBE together with the shared values will be the guiding principles on how the Board is expected to conduct itself in discharging its duties.

The Board has also put in place the MHB No Gift Policy which prohibits the receiving and offering of gifts to prevent unethical practice whilst the Whistleblowing Policy provides an avenue for employees and members of the public to disclose any improper conduct within the Group.

4.3 Risk Management
 

The Board establishes policies and framework for the oversight and management of enterprise risks to safeguard shareholders’ investments and the Group’s assets. In this respect, a Risk Management Framework for the Group has been formalised which includes the Risk Governance Structure and Risk Management Policy.

4.4 Health, Safety, Security and Environment (“HSSE”)
 

The Board formulates principles on the development of strategies to promote and strengthen sound HSSE culture across the Group and support for longer term sustainability.

4.5 Investor Relations
 

The Board maintains an effective investor relations policy which promotes timely disclosure and dissemination of relevant information to and effective engagement with the shareholders and the general investing public.

5.0 BOARD DEVELOPMENT
 
5.1 Succession Planning
 

The Nomination & Remuneration Committee assists the Board in considering succession planning in its annual review of the competencies and composition of the Board to ensure leadership effectiveness and continuity.

5.2 Board and Directors’ Assessment
 

The assessment on the performance of the Board as a whole and individual Directors is undertaken on an annual basis.

5.3 Directors’ Remuneration
 

Remuneration for Non-Executive Directors is generally determined based on industry practice and at levels which reflect the contributions and degree of responsibilities of the Directors.

5.4 Directors’ Training and Development
 

Directors are encouraged to attend relevant training programmes to ensure they remain well equipped with the necessary developments and knowledge. In-house trainings customised to suit the needs of the Directors will be organised as part of the Directors’ continuing education programme. Directors are also regularly updated by the Company Secretary on relevant new regulations.

6.0 AMENDMENTS
 

This Charter may be amended by the Board, when necessary to ensure it remains consistent with the Board’s objectives and relevant to the current laws and practices.

 

This Board Charter has been adopted by the Board on 9 April 2013.

 
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