Doing Well by Doing Good
II. COMPOSITION OF THE BOARD
The Board, through annual reviews by the NRC, seeks to ensure an appropriate balance of experience, competencies and knowledge as well as diversity among the Directors to provide effective leadership to the Company and is guided by its Board Diversity Policy and Directors’ Fit and Proper Policy, which were approved by the Board on 30 May 2022.
The Board currently comprises 7 Directors, 3 of which are Independent Non-Executive Directors and 2 female Directors.
The current Directors possess an appropriate mix of skills, commitment, experience, gender diversity and independence to enable the Board to discharge its responsibilities effectively and deliver the Company’s strategic priorities as a diversified Company. In addition, the composition of the Board also meets the requirement for independent directors provided for in the Bursa Listing Requirements. Details of Directors, including their qualifications, experience, directorship and date of appointment to the Board are set out in Our Board of Directors section of this Annual Report and is also available on the Company’s website.
Following a board refresh exercise undertaken during FYE2022, several changes were made to the Board:
• Encik Azizan bin Mohd Noor retired from the Board upon the conclusion of the Company’s 49th AGM held on 21 September 2021 after having faithfully served as Independent Director for 18 years.
• Dato’ Rosman bin Abdullah, who has served on the Board as an Independent Director from May 2004 was redesignated as Non-Independent Non-Executive Director
Independent
Non-Executive Director Non-Independent Executive Director Non-Independent Non-Executive Directors Board
Composition 43%
14%
43%
Female Board Male
Diversity 29%
71%
Appointment Process for Nomination and Selection of New Directors
The Board renewal process is overseen by the NRC and involves regularly reviewing the composition of the Board to ensure that the Directors bring to the table an appropriate mix of background, skills, experience and diversity relevant to the Group’s businesses.
In doing so, where necessary or appropriate, the NRC and Board may tap on its networking contacts and/or engage external professional agencies to assist with identifying and shortlisting candidates. The NRC then meets the shortlisted potential candidates before recommending the most suitable candidate to the Board for appointment as Director. The new Directors will be provided with a Director’s Kit containing the Company’s Constitution, Board Charter and Board Committees’ Terms of Reference, Group policies and other key information.
During the FYE2022, the NRC’s focus has been to refresh the composition of the Board; with the overriding aim of appointing the best talent to the Board based on merit and assessed against objective criteria of skills and experience.
The NRC considers the following factors in its selection of new Board members and when making their recommendation to the Board for appointment:
• balance of diversity, skills, experience and independence;
• the skillsets and experience of the current Board, and the criteria set by the Board with focus on competencies that are relevant to KFima’s present and future businesses;
• any potential conflict of interests; and
• the ability of the candidate to devote sufficient time to meet
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Details of the different stages of the appointment process that the NRC followed are set out below:
STEP 1 List of prospective new candidates were provided to the NRC.
STEP 2
- NRC reviewed and evaluated the candidates taking into account relevant factors such as experience, skills, diversity, conflict of interest, time commitment as well as the personality fit with the existing Board and the culture of the Group.
- NRC shortlists candidates.
STEP 3 NRC and Group MD interview the shortlisted candidates virtually.
STEP 4
NRC formalised their
recommendations to the Board on the selected candidates.
STEP 5
Board considered and approved NRC’s recommendations. The appointment of the new Director took effect upon his acceptance of the letter of appointment from the Company.
On 16 November 2021, the NRC recommended the appointment of a new Independent Director to the Board. The Board had at its meeting on 30 November 2021, concurred with the NRC’s recommendation which culminated in the appointment of Mr.
Danny Hoe Kam Thong effective 2 December 2021. Mr. Danny Hoe is an accountant by training and has experience in the agribusiness industry with deep knowledge of international markets and trading, both significant areas of opportunity for KFima.
Independence of Directors
Name Date of Appointment
Dato’ Idris bin Kechot 3 May 2019
Datuk Anuar bin Ahmad 3 May 2019
Danny Hoe Kam Thong 2 December 2021
The Independent Directors are expected to bring views and judgement to Board deliberations that are independent of management and free of any business, interest, position, association or other relationship or circumstance that could materially interfere with the exercise of objective, unfettered or independent judgement, having regard to the best interests of the Company as a whole.
The Independent Directors are appointed to offer a wide range of skills and experience which enable them to advise, support and constructively challenge management, to provide independent judgement on the Board’s discussions and to help with the development of the Company’s strategy. A Director is considered independent if he/she is independent of management and free of any business or other relationship that could, or reasonably be perceived to, materially interfere with his/her capacity to bring independent judgement on issues before the Board, and his/her ability to act in the best interests of the Company.
The independence of Independent Non-Executive Directors are assessed prior to appointment and reviewed annually by the NRC as part of its annual evaluation of Board effectiveness, having regard to:
• any disclosures made by Directors regarding their independence.
• the definition of independence set out in the Bursa Listing Requirements.
• the relationships affecting the independent status of a Director as described in the Bursa Listing Requirements.
• any other matters the Board considers relevant.
Where a material personal interest arises with respect to a matter that is to be considered by the Board, the Director is required to declare that interest and must not take part in any Board discussion or vote in relation to that matter, unless permitted by law.
The Board will continue to review the independence of the Company’s Independent Directors from time to time to ensure that they have the necessary competencies, skills and knowledge, and continue to exercise independent and objective judgement, play their part effectively on the Board in the best interest of the Company and satisfy the independence criteria. In addition, each Director must immediately disclose to the Board if a Director is, or becomes aware of, any information, facts or circumstances that will or may affect that Director’s independence.
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Independence Assessment
• NRC will evaluate the suitability of the candidates, including an assessment of their independence.
• Upon his/her acceptance of the Letter of Appointment, he/she is required to disclose to the Company all relevant information of entities of which he/she has material interest direct/indirect, is an executive director or is a director.
• Upon appointment, a director is also required to confirm with Bursa his/her independence having regard to the criteria of independence as prescribed in the Bursa Listing Requirements.
Before and on appointment
Ongoing process
• Independent non-executive director is required to inform the Company as soon as practicable if there is any change in his/her own personal particulars that may affect his/her independence.
• All directors have continuing duty to update the Company on any changes to their other appointments which will be reviewed by the Board.
Annual assessment
• Each independent non-executive director is required to confirm with the Company his/her independence having regard to the criteria of independence as set out in the Bursa Listing Requirements.
• NRC assesses and reviews the independence of independent non-executive directors annually.
Board Diversity
The Company sees diversity at the Board level as an essential element to ensuring the achievement of its strategic objectives and meeting the future needs of the Company. Under the Company’s Board Diversity Policy, the NRC is empowered to review and assess the composition and performance of the Board annually, as well as identifying qualified candidates to occupy Board positions.
We believe that a balanced Board is stronger and better equipped to consider matters from a broader perspective and to understand the views of our stakeholders as well as our shareholders.
The Board Diversity Policy is available on the Company’s website under the Investor page.
Re-election and Re-appointment of Directors
The Company’s Constitution states that one-third or the number nearest to one-third of the Directors must retire by rotation at each AGM at least once every 3 years. These Directors are eligible for re-election, subject to approval by shareholders at the AGM. The
Under the Company’s Constitution, a new Director appointed by the Board during the period since the last AGM will hold office only until the next AGM following his appointment and he will be eligible for re-election. Newly appointed Director is not taken into account in determining the number of Directors who are to retire by rotation.
At the forthcoming AGM of the Company, Datuk Anuar bin Ahmad and Dato’ Roslan bin Hamir are to retire by rotation in accordance with Article 102 of the Company’s Constitution while Mr. Danny Hoe Kam Thong, who was appointed during the period since the last AGM is to retire pursuant to Article 84 of the Company’s Constitution.
The profiles of Directors seeking re-election are set out in Our Board of Directors section of this Annual Report.
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Performance Evaluation
The annual Board evaluation provides the Board and its Committees with an opportunity to consider and reflect on the quality and effectiveness of its decision making, the range and level of discussion and for each Director to consider their peer’s contribution and performance.
The NRC is responsible for overseeing the implementation of the evaluation process, identifying the issues and making appropriate recommendations to the Board. Every 3 years, the Board engages an external consultant to undertake a review of the effectiveness and structure of the Board and the Board Committees. In the intervening years, the performance evaluation process is internally facilitated by the Company Secretary. The process involved Directors completing of a questionnaire covering various aspects of Board, Board Committees and Director’s effectiveness.
Key Areas Covered in the Questionnaire Board Evaluation Assessment
• Composition & quality of the Board
• Assessment of Board Chairman
• Boardroom activities
• ESG or sustainability
• Ethics and compliance
• Board meeting process and procedures
Audit and Risk Committee Evaluation Assessment
• Composition and quality of the Committee
• Oversight of the financial reporting and internal controls
• Risk Management
• Audit and Risk Committee meeting process and procedures
• Ethics and compliance
Individual Board Evaluation Assessment
• Fit and proper
• Contribution and performance
• Calibre and personality
Nomination and Remuneration Committee Evaluation Assessment
• Composition and quality of the Committee
• Oversight of appointment/election and performance evaluation of director and senior management
• Oversight of remuneration roles and responsibilities
• Committee meeting process and procedures
Evaluation Process Completion of questionnaires on
the effectiveness of the Board, Committees and individual Directors
Collation of results and preparation of a detailed report
on the findings and actions
Board evaluation report discussed in the NRC and the Board meetings
Areas for continuous improvements are recommended to the Board
Stage 1 Stage 2 Stage 3 Stage 4
2018 Internal performance
review
2019 Internal performance
review
2020 Independent, externally
facilitated review
2021 Internal performance
review
2022 Internal performance
review
Based on the evaluation conducted for FYE2022, the Board is satisfied of its existing number and composition and of the view that, with the current mix of skills, knowledge, experience and strength, the Board as a whole is able to discharge its duties effectively.
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