PRINCIPLE A
I. BOARD RESPONSIBILITIES Board Leadership
I. BOARD RESPONSIBILITIES Board Leadership
KLK continues to be led by an experienced, competent and diversified Board that is made up of Directors with appropriate competencies, knowledge, skills and experience from diverse sectors and backgrounds and also in the Group’s core businesses. The Directors collectively, have wide and varied technical, financial and commercial experience which facilitate effective, thorough and considered discharge of the Board’s statutory and fiduciary duties and responsibilities.
There is a clear division of functions between the Board and the Management to ensure that no single individual or group dominates the decision-making process. The Board is focused on the Group’s overall governance by ensuring the implementation of strategic plans and that accountability to the Group and stakeholders is monitored effectively; whereas the Management is responsible for the implementation of management goals in accordance with the direction of and delegation by the Board.
Roles and responsibilities of the Board
The principal functions and responsibilities of the Board (set out in the Board Charter) include, but are not limited to the following:
(a) Providing leadership to the Company by:
• Guiding the development of appropriate standards and values for the Company.
• Acting in a manner consistent with the Directors’ Code of Conduct.
(b) Overseeing the development and implementation of corporate strategies by:
• Working with the Senior Management to ensure that an appropriate strategic direction and set of goals are in place.
• Regularly reviewing and amending or updating the Company’s strategic direction and goals developed by the Senior Management.
• Providing guidance and leadership to the Senior Management and ensuring that adequate resources are available to meet its objectives.
• Overseeing planning activities including the development and approval of strategic plans, major funding proposals, investment and divestment proposals, annual corporate budgets and long-term budgets including operating budgets, capital expenditure budgets and cash flow budgets.
• Reviewing the progress and performance of the Company in meeting these plans and corporate objectives, including reporting the outcome of such reviews.
(c) Ensuring corporate accountability to the shareholders primarily through adopting an effective shareholder communications strategy, encouraging effective participation at general meetings and, through its Chairman, being the key interface between the Company and its shareholders.
(d) Overseeing the control and accountability systems that seek to ensure the Company is progressing towards the goals set by the Board and which are in line with the Company’s purpose, the agreed corporate strategy, legislative requirements and community expectations.
SHAREHOLDERS REGULATORS
Company
Secretary BOARD
COMMITTEES
Group Risk Management
Committee Treasury
Committee Sustainability
Steering Committee
Executive Committee Corporate
Responsibility Steering Committee
BOARD OF DIRECTORS
Chief Executive
Officer
Nomination Audit
and Risk Remuneration
External
Auditors Internal Auditors
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CORPORATE GOVERNANCE OVERVIEW STATEMENT
(e) Promoting good corporate governance culture within the Company based on the principles of transparency, objectivity and integrity.
(f) Ensuring effective risk management, compliance and control systems (including legal compliance) are in place.
(g) Ensuring the integrity of the financial and non-financial reporting of the Company and its subsidiaries.
(h) Delegating appropriate powers to the Chief Executive Officer (“CEO”), Management and Committees to ensure the effective day-to-day management of the business, and monitoring the exercise of these powers.
(i) Reviewing potential candidates for the Board and Senior Management positions across the Group through the Nomination Committee (“NC”) to ensure efficient succession planning and continuity of the vision and mission of the Group.
(j) Embedding sustainability and corporate responsibility practices as part of Group strategy.
Board Committees, namely the Audit and Risk Committee (“ARC”), NC and Remuneration Committee (“RC”), have been constituted to assist the Board in the discharge of specific duties and responsibilities.
Each Committee operates within its respective defined Terms of Reference (“TOR”) which have been approved by the Board.
The Group’s governance model is set out below:
Directors
Number of Meetings Attendance Percentage
Held Attended
R. M. Alias 6 6 100%
Tan Sri Dato’ Seri Lee Oi Hian 6 6 100%
Dato’ Lee Hau Hian 6 6 100%
Dato’ Yeoh Eng Khoon 6 6 100%
Tan Sri Azlan Bin Mohd Zainol 6 6 100%
Quah Poh Keat 6 6 100%
Anne Rodrigues 6 6 100%
Lee Jia Zhang 6 6 100%
CORPORATE GOVERNANCE OVERVIEW STATEMENT
The Board is satisfied with the level of commitment given by the Directors in carrying out their responsibilities which is evidenced by the attendance record of the Directors above. The Board is also mindful of the importance of devoting sufficient time and effort to carry out their responsibilities and enhance their professional skills. In this respect, none of the Directors hold more than five (5) directorships each in other listed corporations.
The Board Chairman
The Chairman of the Company, who was appointed by the Board, is responsible for leading the Board in discharging its duties effectively, and enhancing the Group’s standards of corporate governance.
Roles and responsibilities of the Chairman
The roles and responsibilities of the Chairman include:
(a) Providing effective leadership to the Board, i.e. to see that the Board gets its job done;
(b) Setting the agenda for Board meetings together with the CEO and ensuring the provision of complete and accurate information to all Directors in a timely manner;
(c) Leading Board meetings and discussions, and ensuring the effective and efficient conduct of the Board meetings;
(d) Encouraging active participation and allowing dissenting views to be freely expressed to ensure that the key issues facing the Group are addressed;
(e) Promoting consultative and respectful relations between Board members and between the Board and Management;
The Board meets at least four (4) times a year on a scheduled basis, with additional meetings convened as and when necessary. During the financial year ended 30 September 2020, a total of six (6) Board meetings were held. The following are the details of attendance of each Director:
(f) Chairing shareholders’ meetings and ensuring appropriate steps are taken to provide effective communication with stakeholders to ensure their views are communicated to the Board as a whole;
and
(g) Leading the Board in establishing and monitoring good corporate governance practices in the Company.
Separation of positions of the Chairman and the CEO
The respective roles of the Chairman and the CEO are clearly defined, so as to promote accountability and facilitate division of responsibilities between them as a check and balance mechanism. The Board believes that the separation of the roles and responsibilities of the Chairman and the CEO ensures an appropriate balance of power and authority.
The Chairman is responsible for leading the Board in discharging its duties effectively, and enhancing the Group’s standards of corporate governance.
He promotes an open environment for debate, and ensures that all Directors are able to speak freely and contribute effectively at Board meetings. The Chairman also provides clear leadership to the Board with respect to the Group’s long-term growth and strategy.
The CEO focuses on the business, organisational effectiveness and day-to-day management of the Group. He also executes the Board’s decisions and strategic policies, and chairs the Executive Committee, which comprises Senior Management executives to oversee the operations of the KLK Group.
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Company Secretary
The Board is supported by an in-house Company Secretary, who is suitably qualified, experienced and competent. To ensure that Directors are well supported by accurate, complete and timely information, all Directors have unrestricted direct access to the services of the Company Secretary to enable them to discharge their duties and responsibilities effectively.
The Company Secretary is responsible to provide clear and professional advice to the Board on all governance matters and assist the Board on the implementation of an effective corporate governance system. In order to ensure uniformity of Board conduct, the Company Secretary also has oversight of the overall corporate secretarial functions of the Group, both locally and in the countries where its subsidiaries are operating, and serves as an adviser on matters pertaining to governance.
Supply of and Access to Information and Advice All Directors are furnished with an agenda and a set of Board papers to Board meetings at least seven (7) days prior to the meetings. This would give sufficient time to the Directors to obtain further explanation or clarification, where necessary, in order to be properly briefed before the meeting. The Board papers include, amongst others, the following:
• quarterly financial report and a report on the Group’s cash and borrowings position;
• a current review of the operations of the Group;
• minutes of meetings of all Board Committees;
and
• minutes of previous Board meetings.
Monthly reports on the financial performance of the Company and the Group are also circulated to the Directors for their views and comments. All proceedings of Board meetings (which include all material deliberations and recommendations) are minuted and filed in the statutory records of the Company, which is accessible by the Directors at all times. Notices on the closed periods for dealings in the shares of the Company are circulated to all Directors and principal officers of the Company in order for them to make necessary disclosure to the Company in advance of whenever the closed period is applicable.
In recognising the importance of sound and timely information flow to the Board effectively, all announcements made to Bursa Malaysia will be circulated to all Directors on the day the announcements
are released. Copies of Director’s notices on changes of Director’s interests and other directorships will also be given to the other Directors of the Company within the timeframe prescribed by the regulations.
Senior Management is requested to attend Board meetings to present and provide additional information on matters being discussed and to respond to any queries that the Directors may have.
In the furtherance of its duties, the Board is also authorised to obtain at the Company’s expense, independent professional advice on specific matters, if necessary, to enable the Board to discharge its functions in the decision-making process.
Board Charter
The Board is guided by its Board Charter which clearly sets out the Board’s strategic intent, roles and responsibilities in discharging its fiduciary and leadership functions. The Board Charter serves as a source reference and primary induction literature to provide insights to prospective Board members and Senior Management. Hence, the Board Charter is reviewed periodically and updated in accordance with the needs of the Company to ensure its effectiveness and consistency with the Board’s objectives and corporate vision.
The Board Charter is published on the Company’s website, www.klk.com.my.
Code of Conduct for Directors
The Board also adheres to the Code of Conduct for Directors which sets out the standard of conduct expected of Directors, with the aim to cultivate good ethical conduct that in turn promotes the values of transparency, integrity, accountability and social responsibility. The latest Code of Conduct for Directors is accessible for reference on the Company’s website, www.klk.com.my.
Code of Conduct and Ethics for the Company The Board promotes good business conduct and healthy corporate governance culture that engenders integrity, transparency and fairness in line with the Company’s Code of Conduct and Ethics. The Code of Conduct and Ethics sets out the principles and standards of business ethics and conduct of the Group and is to be observed by all employees, officers and Directors of the Group.
The Code of Conduct and Ethics is made available for reference by all employees, officers and Directors of the Group on the Company’s website, www.klk.com.my.
CORPORATE GOVERNANCE OVERVIEW STATEMENT
Code of Conduct for Employees
In line with good corporate governance practices, the Board, the Management and employees of the Group are committed to a corporate culture which supports the operation of its businesses in an ethical manner, and uphold high standards of professionalism and exemplary corporate conduct at the work place.
The Code of Conduct for Employees sets out the standards of behaviour expected of all employees when dealing with stakeholders. It gives guidance in areas where employees may need to make personal and ethical decisions.
In addition to this, employees are also given access to grievance redressal procedures which provide a formal and transparent platform for employees to air their grievances, file complaints or report problems in relation to the Company and its operations.
Both the Code of Conduct for Employees and Group Employee Grievance Redressal Policy are available on the Company’s website, www.klk.com.my.
Group Anti-Corruption Policy
KLK Group is committed to fostering an anti- corruption culture and to ensuring that its activities and transactions are open, transparent and are conducted in accordance with its policies and the laws which govern its operations in every country in which it operates. Consistent with this commitment and in ensuring the Group’s readiness for the enforcement of the Corporate Liability provision of the Malaysian Anti-Corruption Commission (Amendment) Act 2018, the Group has formalised its Group Anti-Corruption Policy to ensure the practise of ethical business dealings and to strengthen measures in minimizing the risk of corruption and bribery in the Group’s activities.
The Group Anti-Corruption Policy which is guided by the Guidelines on Adequate Procedures issued pursuant to Section 17A of the Malaysian Anti- Corruption Commission (Amendment) Act 2018, applies to all directors, officers, trustees, partners, employees and persons associated with KLK Group. Details of the Group Anti-Corruption Policy are available on the Company’s website, www.klk.com.my.
Group Whistleblowing Policy
The Group has adopted a Group Whistleblowing Policy to enable stakeholders to raise in confidence possible corporate misdemeanours without fear of intimidation or reprisal. This Group Whistleblowing Policy provides an avenue for stakeholders to raise or report legitimate concerns about any actual or suspected unethical conduct, corporate misdemeanours of corrupt practices and bribery, as well as improprieties involving the resources of the KLK Group at the earliest opportunity for expeditious investigation. The Group
is committed to absolute confidentiality and fairness in relation to all matters raised and will support and protect those who report violations in good faith.
The details of the Group Whistleblowing Policy are available on the Company’s website, www.klk.com.my.
Sustainability of Business
KLK believes that doing business in a sustainable manner goes hand-in-hand with corporate responsibility and both are integral to generate and sustain short and long term value for its stakeholders.
As such, the Board is committed to promote business sustainability strategies via continuous balanced assessment and development of its operations, whilst simultaneously conserving and improving the natural environment, and uplifting the socio-economic conditions of its employees and local communities.
The Sustainability Policy is available on the Company’s website, www.klk.com.my and the sustainable development and corporate responsibility programmes of the Group are disclosed on pages 50 to 91.