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Board Charter

HOVID BERHAD

(Company No: 58476-A)

 

BOARD CHARTER

 

 

INTRODUCTION

 

The Board of Directors (“the Board”) recognises their overall responsibility for the strategic direction of the Group and to review corporate strategies, operations and performance of business units within the Group.  All Board members shall act in a professional manner and responsible for good stewardship of the Group.  The Board has adopted a Board Charter as part of the corporate governance framework.

 

 

A.    OBJECTIVE

 

The objective of the Board Charter is to set out

  • the roles, duties and responsibilities of the Board, including the Board Committees established by the Board;
  • the size, composition and tenure of the members; and
  • the guide for prospective new Board members.

 

 

B.    THE BOARD OF DIRECTORS

 

Paragraph 15.02 of the Main Market Listing Requirements (“Listing Requirements”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) require at least two (2) or one third (1/3) of the Board, whichever is higher, to be non-executive independent directors.  The Board shall comprise a balance of executive and non-executive directors who have wide range of experience and expertise in various industries as well as their diverse background and skills, thereby ensuring a broader perspective and depth in the Board’s decision making processes.  Pursuant to the Company’s Articles of Association, the number of directors of the Company shall not be less than two (2) directors and not more than ten (10).  The size and composition of the Board shall be reviewed periodically to reflect the Company’s requirements.

 

The Board shall conduct an annual assessment of the tenure of independent directors.  Where the tenure of an independent director exceeds a cumulative term of nine (9) years, the Board will need to justify and seek shareholders’ approval should it seek to retain the director as an independent director.  Alternatively, the independent director may continue to serve on the Board subject to the director’s re-designation as a non-independent director.

 

The role of Chairman and Managing Director is now being held by the same person as the Board is of the opinion that such role could be carried out without significantly affecting the practice of the Group’s corporate governance.  In addition, the majority presence of the independent non-executive directors play a vital role in providing independent views on various issues and ensure a balanced and fair deliberation process to safeguard the interests of the Company’s stakeholder.

 

Role of the Chairman / Managing Director

 

The Chairman is appointed by the Board.  The Chairman’s primary role is to preside over meetings of directors and ensure the smooth functioning of the Board in the interest of good corporate governance.  The Chairman shall manage Board meetings to ensure robust decision-making and build a high performance board.  He is to provide effective leadership to the Board and act as the main conduit between management and the Board.  He is also responsible for the Group’s business performance and manages the Group in accordance with the strategies and policies approved by the Board.  He leads the Executive Directors in business operations and brings material matters to the Board.

 

Role of the Executive Directors

 

The roles of the Executive Directors are to design, develop and implement strategic plans for the Group in a cost effective and time efficient manner.  The Executive Directors oversees the day-to-day operations of the Group, including managing staff and developing business plans in collaboration with the Board for the future of the Group.  The Executive Directors are accountable to the Chairman of the Board and reports to the Board. 

 

Role of the Non-Executive Directors

 

Non-Executive Directors are not involved in the day-to-day management of the Group but bring an independent judgment to bear on issues of strategy, performance and resources.  They are independent from the management and any of its interested parties therefore bringing a degree of objectivity to the Board’s deliberations and play a valuable role in monitoring decisions.    

 

Appointments and Re-elections of Directors

 

The Nomination and Remuneration Committee shall assist the Board in identifying candidates for directorships to be filled and directors to fill the seats on Board Committees.  In addition, the Nomination and Remuneration Committee shall assist the Board in carrying out an annual review on the balance and size of Non-Executive participation in the Board.  This require a review of the required mix of skills and experience and other qualities including core competencies which the Non-Executive Directors should bring to the Board.  Furthermore, the Nomination and Remuneration Committee establishes procedures and processes for the annual assessment of the effectiveness of the Board as a whole, the Committees of the Board and the contributions of each individual Director.

 

The Articles of the Company provides that one third (1/3) of the Directors are subject to retirement by rotation at Annual General Meeting (“AGM”) at least once in every three (3) years and all retiring Directors shall be eligible for re-election. The Articles of the Company further provides that all Directors who are appointed during the financial year are subject to retirement and re-election by the shareholders at the AGM following their appointments.

 

Directors who are over seventy (70) years of age are required to submit themselves for annual re-appointment in accordance with Section 129(6) of the Companies Act, 1965.

 

 

 

Directors’ Training

 

All newly appointed directors will be briefed on the corporate structure and the business activities of the Company.  All directors are required to attend the Mandatory Accreditation Programme as required under the Listing Requirements of Bursa Securities and encouraged to attend a continuous training programme each year.  The Board acknowledges that continuous education is vital in keeping them abreast with changes in law and regulations, business environment and corporate governance developments, besides enhancing professionalism and knowledge in enabling them to discharge their duties more effectively.  The Company is committed to continuously provide pertinent educational programme to the Board of Directors through both internal and external means.  All Directors shall receive updates from time to time on relevant new laws and regulations to enhance their business acumen and skills to meet changing commercial risks and challenges.  The Board would evaluate and determine the training needs of its Directors on a continuous basis.

 

 

C.    DUTIES AND RESPONSIBILITIES

 

In discharging its fiduciary and leadership functions, the Board has established the duties and responsibilities as follows:-

 

  1. reviewing and adopting strategic  plans  for the Group;
  2. overseeing the performance and management of the Group’s business;
  3. identifying principal risks and the implementation of an effective risk management, compliance and internal control framework;
  4. monitoring the financial performance and major capital commitments of the Group;
  5. reviewing and approving major corporate proposals, material acquisitions and new business ventures of the Group;
  6. ensuring the adequacy of internal policy and regulatory compliance systems;
  7. ensuring an effective board;
  8. appointing, supporting, evaluating, training, developing and rewarding members of the Board; and
  9. communicating and reporting to shareholders and other stakeholders in a transparent manner.

 

 

D.    BOARD COMMITTEES

 

To ensure its effectiveness in periodic monitoring, deliberating and safeguarding of long term shareholder value and provide a robust platform to realize the Group’s strategy, the Board may delegate certain of its responsibilities to Board Committees which operates with clearly defined functions to carry out these responsibilities in a supporting role to the Board.  These Committees comprising members from the main Board itself are empowered to deliberate and examine issues delegated to them and report to the Board with their recommendations and comments.  The ultimate responsibility for the final decision on all significant matters proposed by the Board Committees lies with the Board as a whole.

 

The Board is assisted by two (2) Board Committees, namely the Audit Committee and the Nomination and Remuneration Committee, each entrusted with specific tasks.  The Audit Committee is assisted by the Risk Management Committee which forms the second layer of assistance to the Board.

 

 

E.    BOARD MEETINGS

 

Board meetings are scheduled towards the availability of the Board members to attend.  This is to ensure that each Board member is able to discharge their responsibilities.  The Board will normally meet not less than five (5) times a year.  The Board members shall be given reasonable notice and the board papers containing information relevant to the business in a timely manner prior to each Board meeting to enable the Directors to participate actively in the overall management of the Company. 

 

The Board members may obtain independent professional advice in furtherance of their duties at the Company’s expense.  They also have full access to the advice and services of the Company Secretaries, who are responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. 

 

The Directors have the consent of the Board, whether acting as a full Board or in their individual capacity to have full access to all information pertaining to the Group’s business and affairs in furtherance of their duties.

 

F.   CODE OF CONDUCT

 

The Board has adopted this Code of Business Conduct & Ethics for the members of the Board.  Each director shall abide by and conform to the Code in their capacity as board members.

 

If any director believes that a prohibited act under this Code has occurred, he shall promptly report such belief to the Board.  The Board will review and investigate any such reported prohibited act.  If the Board determines that such act represents a violation under this Code, appropriate remedial or disciplinary action will be taken.  The Company will disclose any such violation and the remedial or disciplinary action taken to the extent required by Bursa Securities or other applicable laws. 

 

  1. 1.         To avoid Conflicts of Interest

Every director has a duty to avoid personal interests or interest of any associated person which conflict with the interests of the Company.  Any activity which even appears to present such a conflict must be avoided or terminated unless, after such disclosure to the Board, it is determined that the activity is not harmful to the Company.

 

  1. 2.         Conduct of Business and Fair Dealing

No director shall:

  1. a.       Compete with the Company by providing service to a competitor as an employee, officer or director or in a similar capacity;
  2. b.      Profit, or assist others to profit, from confidential information or business opportunities that are available because of the service to the Company;
  3. c.       Improperly influence or attempt to influence any business transaction between the Company and another entity in which a director has a direct or indirect financial interest; or
  4. d.      Take unfair advantage of any customer, supplier, competitor or other person through manipulation, misrepresentation of material facts or other unfair-dealing practice.

 

  1. 3.         Gifts

No director shall solicit or accept gifts, gratuities, free trips, payments, loans, personal property, services or any form of compensation from suppliers, customers, competitors or others seeking to do business with the Company.  Social amenities customarily associated with the legitimate business relationships are permissible. 

 

  1. 4.         Compliance with Laws and Regulations

Each director shall comply with all applicable laws, rules and regulations and will provide full cooperation when requested to do so by the local authority as are required to uphold the law.  A director should not engage in conduct likely to bring discredit upon the Company

 

  1. 5.         Confidentiality of Information

Except as the Board may otherwise require or as otherwise required by law, no board member shall share, copy, reproduce, transmit, divulge or otherwise disclose any confidential information related to the Company and each member of the Board will uphold the strict confidentiality of all meetings and other deliberations and communications of the Board.

 

 

G.  ENFORCEMENT OF THE BOARD CHARTER

 

The Board will review the Charter from time to time to ensure that it remains consistent with the Board’s objectives and responsibilities.