Code of Corporate Governance
(e) Make recommendations on compensation structure for
executive directors;
® Provide input to the annual report of the company in respect of
directors' compensation;
() Ensure that succession policy and plan exist for the positions of
Chairman, CEO/MD, the executive directors and the subsidiary
managing directors for Group companies;
(h) Ensure that the Board conducts a Board evaluation on an annual
basis;
(U] Review the performance and effectiveness of the subsidiary
company Boards on an annual basis where applicable; and
[0} Review and make recommendations to the Board for approval of
the company's organisational structure and any proposed
amendments.
12, Meetings of the Board
121, To effectively perform its oversight function and monitor
management's performance, the Board should meet at least
once every quarter.
12.2. Every director should be required to attend at least two-thirds of
all Board meetings. Such attendance shall be among the criteria
for the re-nomination of a director except where there are cogent
reasons which the Board must notify the shareholders of at the
annual general meeting.
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Code of Corporate Governance
13. Appointment to the Board
13.1. The Board should develop a written, clearly defined, formal and
transparent procedure for appointment to the Board of directors.
13.2. The criteria for the selection of directors should be written and
defined to reflect the existing Board's strengths and
weaknesses, required skills and experience, its current age
range and gender composition.
13.3. The Board should ascertain whether nominees for the position of
directors are fit and proper and are not disqualified from being
directors.
13.4. Shareholders should be provided with biographical information of
proposed directors including:
(a) Name, age, qualification and country of principal residence;
(b) Whether the appointment is executive, non-executive or
independent and any proposed specific area of
responsibility;
(c) Work experience and occupation in the preceding ten years;
(d) Current directorships and appointments with statutory or
regulatory authorities in the preceding five years;
(e) Shareholding inthe company and its subsidiaries; and
(f) Any real or potential conflict of interest, including whether he
isaninterlock director.
13.5. A section of the company's annual report should state the
processes used in relation to all Board appointments.
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Code of Corporate Governance
14. Remuneration
14.1. Companies should develop a comprehensive policy on
remuneration for directors and senior management. Levels of
remuneration should be sufficient to attract, motivate and retain
skilled and qualified persons needed to run the company
successfully.
The remuneration policy should:
(a) Define the criteria and mechanism for determining levels of
remuneration and the frequency for review of such criteria
and mechanism;
(b) Define a process, if necessary with the assistance of external
advisers, for determining executive and non-executive
directors' compensation; and
(c) Provide how and to what extent executive directors' reward
should be linked to corporate and individual performance.
14.2. The Board should approve the remuneration of each executive
director including the CEO individually, taking into consideration
direct relevance of skill and experience to the company at that
time.
143 Only non-executive directors should be involved in decisions
regarding the remuneration of executive directors.
14.4. Where share options are adopted as part of executive
remuneration or compensation, the Board should ensure that
they are not priced at a discount except with the authorization of
the SEC Any such deferred compensation should not be
exercisable until one year after the expiration of the minimum
tenure of directorship.
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Code of Corporate Governance
14.5. Where share options are granted as part of remuneration to
directors, the limits should be set in any given financial year and
be subject to the approval of the shareholders in general
meeting.
14.6. Compensation for non-executive directors should be fixed by
the Board and approved by shareholders in a general
meeting. However, the fees and allowances or other incentives
tied to corporate performance, paid to non-executive
directors, should not be at a level that could compromise their
independence.
14.7. Companies should disclose in their annual report, details of
shares of the company held by all directors, including on an “if-
converted” basis. This disclosure should include indirect
holdings.
14.8. All directors should be required to disclose their share holding
whether on a proprietary or fiduciary basis in the public
company in which they are proposed to be appointed as
directors, prior to their appointment.
14.9. The Board should undertake a periodic “peer review” of its
compensation and remuneration levels to ensure that the
company remains competitive.
14.10. The company's remuneration policy and all material benefits
and compensation paid to directors should be published in
the company's annual report.
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Code of Corporate Governance
15. Performance Evaluation of the Board
15.1. The Board should establish a system to undertake a formal and
rigorous annual evaluation of its own performance, that of its
Committees, the Chairman and individual directors.
15.2 The evaluation system should include the criteria and key
performance indicators and targets for the Board, its committees,
the Chairman and each individual Committee member.
15.3. The Chairman should oversee the annual evaluation of the
performance of the chief executive officer. The CEO/MD should
similarly perform an annual evaluation for the executive directors
based on agreed criteria or performance indicators.
15.4. The result of the Board performance evaluation should be
communicated and discussed by the Board as a whole, while
those of individual directors should be communicated and
discussed with them by the Chairman.
15.5. Where the performance of a director is determined to be
unsatisfactory, the director concerned should undergo
further training. Where such is not feasible or practicable, the
director may be removed in accordance with established
procedures.
15.6. The Board may engage the services of external consultants to
facilitate the performance evaluation of the Board, its Commiittees,
orindividual directors.
15.7. The cumulative result of the performance evaluation of the Board
and individual directors should be used as a guide in deciding
eligibility for re- election.
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Code of Corporate Governance
16. Conflict of Interest
16.1.Companies should adopt a policy to guide the Board and individual
directors on conflict of interest situations. Such a policy should
include the following principles:
(a) Directors should promptly disclose any real or potential conflict
of interest that they may have regarding any matters that may
come before the Board or its Committees.
(b) A director should abstain from discussions and voting on any
matter in which the director has or may have a conflict of
interest.
(c) If a director is not certain whether he is in a conflict of interest
situation the director concerned should discuss the matter with
the Chairman of the Board or with the company secretary for
advice and guidance.
(d) If any question arises before the Board as to the existence of a
real or perceived conflict, the Board should by a simple majority
determine if a conflict exists. The director or directors potentially
in the conflict of interest situation shall not participate in any
discussion and shall not vote on the issue.
(e) Directors who are aware of a real, potential or perceived conflict
of interest on the part of a fellow director, have a responsibility to
raise the issue promptly for clarification, either with the director
concerned or with the Chairman of the Board.
(f) Disclosure by a director of a real, potential or perceived conflict
of interest or a decision by the Board as to whether a conflict of
interest exists should be recorded in the minutes of the meeting.
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Code of Corporate Governance
17. Insider Trading
Directors of public companies, their immediate families, that is,
spouse, son, daughter, mother or father, and other insiders as
defined under Section 315 of the Investments and Securities
Act (ISA) 2007 and the SEC Rules and Regulations, in possession
of price sensitive information or other confidential information,
shall not deal with the securities of the company where such would
amounttoinsider trading as defined under the ISA.
18. Orientation and Training of Directors
18.1. The Board should establish a formal orientation programme to
familiarize new directors with the company's operations, strategic
plan, senior management and its business environment, and to
induct them in their fiduciary duties and responsibilities.
18.2. It is mandatory for all directors to participate in periodic, relevant,
professional continuing education programmes in order to update
their knowledge and skills and keep them informed of new
developments in the company's business and operating
environment. The objective of the training is to assist the directors
discharge fully and effectively their duties to the company. The
training shall be atthe company's expense.
