Terms of Reference of The Nomination & Remuneration Committee

Terms of Reference of The Nomination & Remuneration Committee

1. PURPOSE

The purpose of this Nomination & Remuneration Committee Charter is to provide guideline for the organization, operation and governance of the Nomination & Remuneration Committee.

2. REFERENCE

3. DEFINITIONS/ABBREVIATIONS

4. GENERAL POLICY

4.1. Responsibilities of Nomination & Remuneration Committee

(a) To identify and make recommendation to the Board of Directors the nominees qualified to become Board members and/or Board Committee members. The Committee shall take into consideration the qualifications for directors set forth in the Board Charter and such other factors as it deems appropriate. The Committee may consider candidates for directorships proposed by the Executive Board but is not required to do so.

(b) To assist the Board annually in reviewing and assessing:

(i) the required mix of skills of experience and other qualities, including core competencies, which Directors should bring to the Board; and

(ii) Audit Committee members knowledge on financial literacy; and

(iii) the independence of Independent Director; and

(iv) the effectiveness of the Board as a whole, the Committees of the Board and for assessing the contribution of each individual Director, including the Board’s gender diversity and anti-corruption policies and procedures;

(v) the effectiveness of Management;

(vi) Periodically review management succession planning to address leadership continuity

(vii) the Company’s compliance with applicable laws and regulations relating to corporate governance practices including anti-corruption policies and procedures

(c) To review and make recommendations about the structure and functions of Board committees, after consultation with the respective committee chairs;

(d) To review and recommend, as appropriate, director orientation and continuing education programs for members including the internal and external trainings in relation to anti-corruption management are developed for Directors.

(e) To review and recommend to the Board the remuneration of each of the Directors and Senior Management in all its forms, drawing from outside advice as necessary. However, the determination of remuneration packages of Directors, if any, should be a matter for the Board as a whole. The individual concerned should, abstain from discussion of their own remuneration.

(f) To monitor the Company’s compliance with the requirements under Companies Act 2016 relating to plans and loans to directors and other legal requirements affecting its compensation and benefits programs, in consultation with the Audit Committee as appropriate.

(g) To review and reassess the adequacy of this Charter annually, and when considered necessary, make recommendations to the Board to modify it;

(h) Conduct an annual performance evaluation of the Committee and report to the Board of Directors;

(i) To provide clarification to shareholders during General Meetings on matters pertaining to nomination of Directors and remuneration of Directors and Senior Management.

4.2. Composition

The Committee shall be appointed by the Board of Directors from amongst their members and comprising exclusively of Independent Directors. The Committee shall consist of not less than three (3) members.

The members of the Committee shall elect a Chairman from amongst their number who shall be an Independent Director or the Senior Independent Director.

If the number of members, for whatever reasons, falls below three (3), the Board of Directors shall, within three (3) months of the event, appoints such number of new members as may be required to make up the minimum number of three (3) members.

The term of office for all members of the Committee is subject to renewal on a yearly basis.

4.3. Nomination & Remuneration Committee Authority

The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate and approve the fees and other retention terms of independent legal advisors, experts or consultants, as it deems appropriate, without seeking approval of the Board or Management. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to any such advisors, experts or consultants retained by the Committee.

5. OPERATING GUIDELINE

5.1. Board Committee Meetings

5.1.1. The Chairman of the Board Committee is responsible for ensuring Board Committee effectiveness. 

5.1.2. The Committee is at liberty to determine the frequency of its meetings. The quorum shall consist of two (2) members.

5.1.3. Directors shall not participate in decisions on their own nomination.

5.1.4. The Committee may invite any person to be in attendance to assist in its deliberations.

5.2. Board Committee Agenda

The Chairperson, in consultation with the appropriate members of the Committee and Management, will develop the Committee’s agenda. A detailed agenda and to the extent feasible, supporting documents and proposed resolutions will be circulated at least five business days one week in advance before each meeting to the Committee members. Committee members should review these materials in advance of the meeting.

5.3. Board Committee Resolutions and Minutes 

5.3.1. The Company Secretary shall minute the proceedings and resolutions of all Board and its Committee meetings. Upon conclusion of the meeting, all Directors shall ensure that the minutes of meetings accurately reflect the deliberations and decisions of the Board or Board Committee, including whether any director abstained from voting or deliberating on a particular matter.

5.3.2. Minutes of meetings shall be entered into the books within 14 days of the relevant meeting date.

5.3.3. Minutes will be tabled for endorsement at the subsequent meeting by the Company Secretary and approved by the Chairman of the Board Committee and the members present at the meeting.

5.4. Board Skills Matrix

5.4.1. The Committee shall outline a Board Skills Matrix in relation to its board composition which typically illustrates the mix of skills (current skill set) that the Board currently has and the Board is looking to achieve in its membership (desired skill set). The desired skill set shall be reviewed annually or as and when need arises to ensure alignment with the objective, strategic direction and emerging challenges faced by the Company.

5.4.2. The Committee shall reflect on any gaps in the current skill set that may be created by the forthcoming retirement of a director or any change in the Company’s strategic direction.

5.5. Board Nomination and Election Process 

5.5.1. The Nomination & Remuneration Committee shall undertake steps as shown in Appendix I in the appointment of a new Director.

5.5.2. In identifying candidates for appointment of directors, the board does not solely rely on recommendations from existing board members, management or major shareholders. The Nomination Committee may utilize the following independent sources to identify suitably qualified candidates:

• • • Directors’ registry (e.g. Institute of Corporate Directors Malaysia);
    • Industry and professional association;
    • Open advertisement
    • Independent search firm.

5.5.3. The Nomination Committee shall take into account factors such as skills, experience, personal attributes and Board diversity and clearly articulate the screening criteria in order to maximize the effectiveness of the search of potential candidates.

5.6. Evaluation for Board of Directors, Board Committee and Individual Directors (“Evaluation of the Board”)

5.6.1. Nomination & Remuneration Committee shall assist the Board to undertake a formal and objective annual evaluation to determine the effectiveness of the Board, its Committees and each individual Director.

5.6.2. Evaluation of the Board is undertaken by the Committee, facilitated by the Company Secretary. This process is conducted using questionnaires which revolved around the followings:

• • • How the Board leads-Examine how the Directors were chosen, the skills and experience the Director brings to bear and the leadership style;
    • How the Board manages-evaluate the manner in which Board meetings and boardroom activities are conducted.
    • How the Board contributes-review the manner in which Board members interact and participate as well as how decisions are made.
    • How the Board addresses and manages the Company’s material sustainability risks and opportunities.

5.6.3. The Committee shall review and assess the result or summary of the evaluation and make recommendation to the Board.

5.7. Remuneration Policy 

5.7.1. The Company has in placed Remuneration Policy as illustrated in Appendix II.

5.7.2. The Committee shall review the Remuneration Policy annually and make recommendation to the Board.

5.7.3. Remuneration Policy shall be made available on the Company’s website.

5.8. Reporting to the Board of Directors

The Nomination & Remuneration Committee shall report to the Board on its activities through presentations during the next Board meeting and/or by submission of the Minutes of the Nomination Committee meetings to the Board. Such reports shall contain recommendations for Board action when required under the provision of any applicable regulation or when deemed appropriate by the Committee.

6. DISCLOSURE IN ANNUAL REPORT

The Nomination Committee is required to set out in a statement in the annual report the followings:

• • • The Board nomination and election process of directors and the criteria used by the Nomination Committee in the selection process; and
    • How the candidates were sourced including whether such candidates were recommended by the existing Board members, Management or major shareholders; and
    • The reason(s) why other sources were not used if the selection of candidates were solely based on recommendations made by existing Board members, Management or major shareholders.
    • The assessment of Board’s, Board Committees’ and individual Directors undertaken together with the criteria used for such assessment.
    • Disclosure on gender diversity:
      • Policies on gender diversity;
      • Target sets on gender diversity;
      • Measures undertaken to meet the aforementioned targets.
    • Disclosure of Remuneration
      • Detailed disclosure on named basis for the remuneration of individual directors. The remuneration breakdown of individual directors includes fees, salary, bonus, benefits-in-kind and other emoluments; and
      • Disclosure on a named basis  the top five Senior Management’s remuneration component including salary, bonus, benefits-in-kind and other emoluments in bands of RM50,000.