This Charter is designed to provide guidance and clarity for Directors with regard to the role of the Board of Directors (“Board”) of Dominant Enterprise Berhad (“DEB” or the “Company”) and its committees, the requirements for Directors in carrying out their role and in discharging their duties towards the Company.
This Charter is available on DEB’s website at: www.dominant.com.my
2. ROLES AND RESPONSIBILITIES
2.1 ROLE OF BOARD
i) Each Director has a legal duty to act in the best interest of the Company and its subsidiaries (“the Group”) and managing the Group in an effective and responsible manner. A Director shall at all times exercise his powers for a proper purpose and in good faith and shall act honestly and use reasonable care, skill and diligence in the discharge of the duties of his office.
ii) A Director shall at all times avoid conflicts of interest, and shall as soon as practicable after the relevant facts have come to his/her knowledge, declare the nature of his/her interest at the Director’s meeting.
iii) The Board shall meet at least once every quarter to facilitate the discharge of their responsibilities. The annual meeting calendar is prepared before the beginning of each financial year so as to provide the scheduled dates for meetings of the Board and Board Committees. The Board may invite any employee or third party to attend and speak on matters relevant to the meetings.
iv) The Board oversees the business and affairs of the Company and will assume, amongst others, the following duties and responsibilities:-
a) reviewing, discussing, approving and monitoring the overall strategies and direction of the Company;
b) overseeing and evaluating the conduct and performance of the Company’s businesses;
c) reviewing, discussing and approving the financial statements encompassing annual audited accounts and quarterly reports;
d) identifying potential risks and managing the risks affecting the Company;
e) reviewing the adequacy and integrity of the Company’s internal control policy;
f) reviewing, discussing and monitoring systems of risk management and internal compliance and controls, codes of conduct, continuous disclosure, legal compliance and other significant corporate policies;
g) reviewing, discussing and approving any major investments in capital projects, corporate financial exercise /restructuring, and/or material acquisitions and disposals of undertakings and properties not in the ordinary course of business;
h) reviewing, discussing and approving the Audit Committee Report, Corporate Governance Overview Statement and Statement of Risk Management and Internal Control for the Annual Report and Corporate Governance Report;
i) reviewing and approving the declaration of dividend;
j) approving and discussing the nomination, selection and remuneration packages for the Board members, Executive Directors and Senior Executives;
k) approving the appointment, resignation or removal of Company Secretary;
l) approving the appointment of external auditors and their fees;
m) ensuring that the Company adheres to high standard of ethics and corporate behaviour; and
n) ensuring that appropriate plans are in place in respect of the succession plan of the Company.
2.2 ROLE OF INDIVIDUAL DIRECTORS
The Directors shall comply with their legal duties and obligations when discharging their responsibilities. Broadly these include:-
i) acting in good faith and in the best interests of the Company as a whole;
ii) acting with care and diligence of a reasonable person subject to business judgement rule;
iii) avoiding conflicts of interest with the Company in a personal or professional capacity;
iv) refraining from making improper use of information gained through the position of Director and from taking improper advantage of the position as Director;
v) disclosing and recusing on matters of material personal interest; and
vi) taking adequate steps for the Company to comply with corporation laws, securities legislation and Listing Requirements.
The Directors will keep all Board information, discussions, deliberations and decisions that are not publicly known confidential and not use such information gained through the Board for their interest or their employers’ interest.
2.3 ROLE OF CHAIRMAN OF THE BOARD
The Chairman of the Board carries out a leadership role in the conduct of the Board and its relations to shareholders and other stakeholders. He represents the Board to shareholders and his primarily responsibilities include :-
i) leading and ensuring efficient and effective conduct of the Board’s meetings;
ii) ensuring that all relevant issues of the Company’s business are on the agenda;
iii) encouraging all Directors to play an active role in Board activities;
iv) promoting constructive and respectful relations amongst Board members;
v) chairing general meetings of shareholders; and
vi) fulfilling such other responsibilities as are allocated by the Constitution or the Board from time to time.
2.4 ROLE OF MANAGING DIRECTOR (“MD”)
The MD leads the Directors in ensuring the effectiveness of all aspects of theirs role. His responsibilities include :-
i) providing leadership to the Board;
ii) overseeing the Board to discharge of its duties effectively;
iii) ensuring that quality information to facilitate decision-making is delivered to Board members on a timely basis;
iv) determining the Company’s strategic objectives and policies;
v) implementing the strategic plans as approved by the Board and ensuring the Board’s directions are responded to; and
vi) monitoring progress towards achieving the objectives and policies of the Group.
2.5 ROLE OF CHIEF EXECUTIVE OFFICER (“CEO”)
The CEO is primarily accountable for overseeing the day-to-day operations of the Company and to ensure the smooth and effective running of the Group. The key roles of the CEO include :
i) providing strong leadership that is effective in communicating the business strategy and management philosophy to the employees;
ii) reporting, communicating and recommending key strategic and operational issues to the MD;
iii) working together with MD in setting the overall strategic policy and direction of the Group and ensuring the development of the strategies are effectively implemented;
iv) ensuring that the financial management practice is performed at the highest level of integrity and transparency and that the business and affairs of the Group are carried out in an ethical manner and in compliance with the relevant laws and regulations; and
v) keeping the Board fully informed of all important aspects of the Group’s operations.
2.6 ROLE OF BOARD COMMITTEES
i) The Board has delegated certain of its responsibilities to three (3) committees. They are :
ii) All committees have written Terms of Reference and have the authority to examine particular issue and report to the Board with recommendations. The Board must make an independent assessment of the recommendations, having regard to the Board’s knowledge of the business and risks of the Company and the complexity of the structures and operations of the Company.
iii) The Board may from time to time establish other committees.
iv) The Board, through the Nominating Committee, reviews the Board Committees’ effectiveness. Evaluation will be carried out to assess the performance of individual Board members on an annual basis. These assessments can be used to facilitate the Nominating Committee’s evaluation of Board Committees’ performance and the Board as a whole.
v) Independent Directors play a leading role in these Committees. The Chairman of the various Committees will report to the Board on the outcome of the meetings of each Committee.
2.7 ROLE OF NON-EXECUTIVE DIRECTORS (“NEDs”)
i) NEDs are persons of calibre, credibility and have the necessary skill and experience to bring an independent judgement to bear on the issues of strategy, performance and resources, including key appointments and standards of conduct. They act as a channel of communication between Management, shareholders and other stakeholders, and provide the relevant checks and balances, focusing on shareholders’ and other stakeholders’ interests and ensuring that high standards of corporate governance are applied.
ii) NEDs are expected to devote sufficient time to update their general knowledge and enhance their skills to enable them to participate effectively during board deliberations.
iii) NEDs can either be independent or non-independent.
2.8 ROLE OF INDEPENDENT NON-EXECUTIVE DIRECTOR (“INED”)
i) An INED is independent of management and free of any significant business or other relationships that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement, and who otherwise meet the criteria for independence.
ii) The Independent Directors provide independent judgement, experience and objectivity without being subordinated to operational considerations.
iii) The Independent Directors help to ensure that the interests of all shareholders and stakeholders, and not only the interests of a particular fraction or group, are indeed taken into account by the Board and that the relevant issues are subject to objective and impartial consideration by the Board.
iv) The views of the Independent Directors should carry significant weight in the Board's decision-making process.
v) The Board undertakes to assess the independence of the Independent Directors on an annual basis upon readmission or when any new interest or relationship develops.
2.9 ROLE OF SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR (“SINED”)
The Board may appoint a SINED to act as an additional safeguard to whom the concerns pertaining to the Group may be conveyed by stakeholders. The duties of Senior Independent Director would typically include the following:-
i) ensuring all Independent Directors have an opportunity to provide input on the agenda, and advise the Chairman on the quality, quantity and timeliness of the information submitted by management that is necessary or appropriate for the Independent Directors to perform their duties effectively;
ii) consulting the Chairman regarding Board meeting schedules to ensure the Independent Directors can perform their duties responsibly and with sufficient time for discussion of all agenda items;
iii) serving as the principal conduit between the Independent Directors and the Chairman on sensitive issues, for example issues that arise from ‘whistleblowing’; and
iv) serving as a designated contact for consultation and direct communication with shareholders on areas that cannot be resolved through the normal channels of contact with the Chairman or Managing Director and/or Chief Executive Officer.
3. COMPOSITION AND BOARD BALANCE
3.1 Size and Composition
i) The Board shall consist of qualified individuals with diverse experiences, backgrounds and perspectives.
ii) The Board shall comprise of a minimum of two (2) Directors and not more than nine (9) Directors.
iii) At any one time, at least two (2) or one-third (1/3) of the Board, whichever is higher, must be Independent Directors.
iv) If, on any matter discussed at a Board meeting, any Director holds views contrary to those of any of the other Directors, the Board minutes will clearly reflect this.
3.2 Nomination and Appointments
i) The Appointment of a new Director shall be considered and approved by the Board upon appropriate recommendation from the Nominating Committee.
ii) A Director may from time to time nominate a person, not being a Director, to act as his alternate and at his discretion to remove such alternate Director but the appointment shall not take effect until approved by a majority of the other Directors provided always that any fee paid by the Company to an alternate director shall be deducted from that director’s remuneration.
iii) The Company Secretary has the responsibility of ensuring that relevant procedures relating to the appointments of new Directors are properly executed.
iv) The directorships held by any Board member at any one time shall not exceed 5 in listed companies or such other numbers prescribed by the relevant regulatory body.
3.3 Re-election and Re-appointment
In accordance with the Company’s Articles of Association (“Articles”), all Directors who are appointed by the Board are subject to election by shareholders at the first opportunity after their appointment. The Articles also provide that at least 1/3 of the remaining Directors be subject to re-election by rotation at each Annual General Meeting (“AGM”) provided always that all Directors including the Managing Director shall retire from office at least once every 3 years but shall be eligible for re-election.
3.4 Tenure of Independent Director
The tenure of an Independent Director shall not exceed a cumulative term of 9 years. However, upon completion of the nine years, the Independent Director may continue to serve in the Board subject to the Director’s re-designation as a Non-Independent Director. In the event the Director is to remain designated as an Independent Director, the Board shall, upon the recommendation from the Nominating Committee, with justifications, seek shareholders’ approval at a general meeting of the Company. If the board continues to retain the tenure of Independent Director after the 12 years, the board should seek shareholders’ approval at a general meeting of the Company through a two-tier voting process.
3.5 Time commitment
The Directors are expected to have the expertise to qualify themselves in making positive contributions to the Board performance of its duties and to give sufficient time and attention to the affairs of the Company.
4. MATTERS RESERVED FOR THE BOARD
To ensure the business of the Group is properly governed by the Board, the Board adopts a formal schedule of matters reserved for the Board’s deliberation and decision. The following list the matters reserved for the Board :
i) Appointment and resignation of Directors and Board Committees members based on recommendations of the Nominating Committee;
ii) Approval and/or amendment on Terms of References of Board Committees;
iii) Disclosure of corporate governance practices in the Annual Report;
iv) Approval of the remuneration packages for all Directors and Senior Executives based on recommendations of the Remuneration Committee;
v) Approval of Group’s business strategy, operational plans and budgets;
vi) Ongoing review of Group’s performance on business strategy and operational plans;
vii) Approval of quarterly and annual financial statements;
viii) Approval of the Annual Report and Statutory Financial Statements;
ix) Approval of dividend;
x) Review of the effectiveness of the Group’s system of internal control;
xi) Any other matters requiring the convening of a general meeting of shareholders or any class of shareholders.
5.1 Directors’ Assessment/ Board Evaluation
The Board entrusts the Nominating Committee with the responsibility for carrying out the annual Board Effectiveness Evaluation.
5.2 Directors’ Training and Development
In addition to the mandatory programmes as required by the Bursa Malaysia Securities Berhad (“Bursa Securities”) for newly appointed Director, Board members are required to attend training programmes conducted by highly competent professionals and which are relevant to the Group’s operations and business.
The Board will assess the training needs of the Directors and ensure that the Directors have access to continuing education programme. The Board shall disclose in the Annual Report the education programme or trainings attended by the Directors.
6.1 Board meetings
i) Meetings of the Board should be held at least once every quarter to ensure that all Directors are kept informed on a timely basis of all material quality information affecting the Company and in a form and manner appropriate for them to discharge their duties effectively.
ii) The Management is responsible for providing the Board with the required information in an appropriate and timely manner. The Chairman, assisted by the Company Secretary, assesses the type of information required to be provided to the Board. If the information provided by the Management is insufficient, the Board will make further enquiries where necessary to which the persons responsible will respond as fully and promptly as possible.
iii) A full agenda and comprehensive Board papers shall be circulated to all Directors in advance of each Board meeting.
iv) The quorum for the Board meetings shall be two (2) in accordance with Article 109 of the Company’s Articles of Association.
v) Full Board minutes of each Board meeting are kept by the Company Secretary and shall be available for inspection by any Director during office hours.
6.2 Annual General Meeting (“AGM”)
i) The Board regards the AGM as an important event in the corporate calendar of which all Directors and key senior executives should attend.
ii) The Company regards the AGM as the principal forum for dialogue with shareholders and aims to ensure that the AGM provides an important opportunity for effective communication with and constructive feedback from the Company's shareholders.
iii) The Chairman encourages active participation by the shareholders during the AGM. During the AGM, the Chairman shall inform shareholders of their right to poll voting at the commencement of the meeting or as required by the regulatory bodies.
iv) The Chairman and, where appropriate, the CEO responds to shareholders’ queries during the meeting. Where necessary, the Chairman will undertake to provide a written answer to any significant question that cannot be readily answered at the meeting.
v) The Company must publish a summary of the key matters discussed at the AGM, as soon as practicable after the conclusion of the AGM to ensure Para 9.21(2)(b) of the Listing Requirements is complied with.
7. REMUNERATION POLICIES
i) The Remuneration Committee reviews the remuneration package of the Directors and Senior Executives and makes recommendations on the same to the Board for approval. In its review, the Remuneration Committee considers various factors, among others, including the compensation levels for comparable positions among other similar public listed companies, their fiduciary duties, time commitments expected of them and the Group’s performance.
ii) The fees and benefits payable to the Directors shall from time to time be determined by an ordinary resolution of the Company in general meeting and shall (unless such resolution otherwise provides) be divisible among the Directors as they may agree.
iii) The Directors shall be reimbursed for all their travelling and other expenses properly and necessarily expended by them in and about the business of the Company including travelling and other expenses incurred in attending board meetings of the Company.
8. ACCESS TO INFORMATION AND INDEPENDENT ADVICE
i) The Directors shall have full and timely access to all relevant information, records and the unrestricted access to the advice and services of the Company Secretary and Auditors. Notice of meetings, agenda and accompanied by detailed reports will be circulated to all the Directors. All issues discussed during the Board meetings are recorded by the Company Secretary and all minutes of meetings are kept in the minutes book at the registered office.
ii) Where necessary, the Directors may seek independent professional advice at the Company’s expense in order to discharge their duties and responsibilities effectively. If a Director considers it is necessary to seek for such advice, the member shall first discuss with the Chairman and bring the matter to the Board during a Board meeting. The seeking of independent professional advice and the proposed cost should be presented to the Board for approval.
9. FINANCIAL REPORTING
i) The Company aims to present a clear and balanced assessment of the Company's financial position and future prospects that extends to the interim and price-sensitive information and other relevant reports submitted to the regulators.
ii) The Directors shall ensure that the financial statements are prepared so as to give a true and fair view of the current financial status of the Company in accordance with the Malaysian Financial Reporting Standards, Financial Reporting Standards and provisions of the Companies Act, 1965.
iii) The Company's practice is to announce to Bursa Securities its quarterly financial results as early as possible within 2 months after the end of each quarterly financial period.
iv) The Auditor’s Report shall contain a statement from the Auditors explaining their responsibilities in forming an independent opinion, based on their audit, of the financial statements.
9.2 Company Auditors
i) The Board has established formal and transparent arrangements for considering how financial reporting and internal control principles will be applied and for maintaining an appropriate relationship with the Company Auditors through its Audit Committee.
ii) The Audit Committee shall keep under review the scope and results of the audit and its cost effectiveness and the independence and objectivity of the Company Auditors. The Company ensures that the Company Auditors do not supply a substantial volume of non-audit services to the Company.
iii) The independence of the Company Auditors will be assessed on an annual basis by the Audit Committee.
iv) Appointment of the Company Auditors is subject to approval of shareholders at General Meetings. The Company Auditors have to retire during the AGM every year and be re-appointed by shareholders for the ensuing year.
10. STAKEHOLDER COMMUNICATIONS
10.1 Investor Relations
i) The Board acknowledges the need for shareholders to be informed of all material business matters affecting the Company and as such adopts an open and transparent policy in respect of its relationship with its shareholders and investors.
ii) The Board ensures the timely release of financial results on a quarterly basis to provide shareholders with an overview of the Company’s performance and operations in addition to the various announcements made during the year.
iii) The Company meets financial analysts from time to time as a means of effective communication that enables the Board and Management to convey information relating to the Company’s performance, corporate strategy and other matters affecting shareholders’ interests to enhance shareholders’ value.
iv) The Company leverage on information technology for effective dissemination of information. The Company’s website provides easy access to corporate information pertaining to the Company and its activities and is continuously updated.
10.2 Other Stakeholders
The Board recognises that no Company can exist by maximising shareholders value alone. In this regards, the needs and interests of other stakeholders are also taken into consideration.
The Board acknowledges that the employees are invaluable assets of the Group. The Group provide safe and healthy working environment for all employees and manage employees’ welfare and well-being in the workplace in the best way to promote corporate social responsibilities.
11. COMPANY SECRETARY
The Board appoints the Company Secretary, who plays an important advisory role and provides support to the Board in fulfilling its fiduciary duties, and ensures that the Company Secretary fulfils the functions for which he has been appointed. The Company Secretary is accountable to the Board through the Chairman of the Board and Committees on all governance matters, compliance with Laws, rules and regulatory requirements.
The Board members have unlimited access to the professional advice and services of the Company Secretary.
12. CONFLICTS OF INTERESTS
i) Every Director who may have direct or indirect interest in any contracts or proposed contract or arrangement with the Company shall immediately declare his/her interest to the Board.
ii) If a conflict or potential conflict situation exists, it is required that the interested Director(s) shall be absent from the meeting whilst the Board discusses the matter and not vote on the matter, unless the other Directors who do not have a material personal interest in the matter have passed a resolution that states that those Directors are satisfied that the interest should not disqualify the Director from being present.
iii) The Directors are expected to advise the Company Secretary of any proposed Board or executive appointment to other companies as soon as practicable and to ensure compliance with the Listing Requirements continually on the maximum number of Directorships in Listed Companies.
13. DEALINGS IN SECURITIES
13.1 Description on “Dealings”
“Dealings” includes any one or more of the following actions, whether undertaken as principal or as agent :
i) acquiring or disposing of securities or any interest in securities;
ii) subscribing for or underwriting securities;
iii) making or offering to make with any person, or inducing or attempting to induce any person to enter into or to offer to enter into:
a) any agreement for or with a view to acquiring or disposing of securities or any interest in securities;
b) any agreement for or with a view to subscribing for or underwriting securities; or
c) any agreement the purpose or avowed purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the values of securities; and
iv) granting, accepting, acquiring, disposing of, exercising or discharging an option (whether for the call or put or both) or any other right or obligation, present or future, conditional or unconditional, to acquire or dispose of securities or any interest in securities.
13.2 Description on “price-sensitive information” and Dealing in securities
“Price-sensitive information” means information that “on becoming generally available would or would tend to have a material effect on the price or value of securities” as referred to in Section 185 of the Capital Market Services Act 2007.A Director must not deal in the securities of DEB as long as he is in possession of price-sensitive information relating to DEB’s securities.
14. CODE OF BUSINESS CONDUCT AND ETHICS
The Directors are expected to conduct themselves with the highest ethical standards. Directors are expected to behave ethically and professionally at all times and thereby protect and promote the reputation and performance of the Company in line with the Company’s Code of Conduct and Ethics.
The Board will review this Charter and make any necessary amendments from time to time as it deems appropriate to ensure they remain consistent with the Board’s objectives, current law and practices. Any updates to the principles and practices set out in this Charter will be made available on the Company's website.
This Board Charter has been updated and adopted by the Board on 27.02.2019 and is available on the Company's website, at www.dominant.com.my