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Board Charter

Board Charter

1.  Introduction

The Board is responsible for undertaking the business and affairs of MBM Resources Berhad ("MBMR") and its subsidiaries (collectively and each individually the “Company”) in the interest of its shareholders. In addition, the Board is responsible for identifying areas of significant business risk, ensuring arrangements are in place to adequately manage those risks and having in place effective internal controls.

2.  Purpose of the Board Charter

The Board Charter will assist the Company’s stakeholders to better understand the objectives of the Board, the Company’s organisation structure and the manner in which the Board exercises its authority and discharges and allocates responsibilities in managing the affairs of the Company.

3.  Composition of the Board

3.1.   Structure

Under the Company’s Constitution, the Board is to be made up of a minimum of two Directors and a maximum number of fifteen Directors.

In accordance with the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“the Exchange”), the Company must ensure that at least two Directors or 1/3 of the Board, whichever is higher, are Independent Directors. (Practice 4.1 MCCG 2017 and Para 15.02 of Main Market Listing Requirements (“MMLR”)

Should a vacancy in the Board occur resulting in the non-compliance with the MMLR of the Exchange, the Board shall fill the vacancy as soon as it is practicable and, in any event, within three months from the date of the vacancy. (Para 15.02(3) of MMLR)

The composition and size of the Board shall be reviewed from time to time to ensure its appropriateness.

3.2.   Independence criteria

A Director will be considered independent if he or she is independent of management and free from any business or other relationship which could interfere with the exercise of independent judgement or the ability to act in the best interests of the Company. Without limiting the generality of the foregoing, an independent Director is one who –

  • is not an executive Director of the Company or any related corporation of the Company;
  • has not been within the last two years and is not an officer (except as a non-executive Director) of the Company. For this purpose, “officer” has the meaning given in Section 2 of the Companies Act 2016;
  • is not a major shareholder of the Company;
  • is not a family member of any executive Director, officer or major shareholder of the Company;
  • is not acting as a nominee or representative of any executive Director or major shareholder of the Company;
  • has not been engaged as an adviser by the Company under such circumstances as prescribed by the Exchange or is not presently a partner, Director (except as an independent Director) or major shareholder, as the case may be, of a firm or corporation which provides professional advisory services to the Company under such circumstances as prescribed by the Exchange; or
  • has not engaged in any transaction with the Company under such circumstances as prescribed by the Exchange or is not presently a partner, Director or major shareholder, as the case may be, of a firm or corporation (other than subsidiaries of the applicant or listed issuer) which has engaged in any transaction with the Company under such circumstances as prescribed by the Exchange.

(Defined in Chapter 1 of MMLR)

Adopting the Malaysian Code on Corporate Governance 2017 (“MCCG 2017”) recommendation, the tenure of the Company’s Independent Directors shall not exceed a cumulative term limit of nine years.   

If the Board intends to retain an independent Director beyond nine years, it should justify and seek annual shareholders’ approval. If the Board continues to retain the independent Director after the twelfth year, the Board should seek annual shareholders’ approval through a two-tier voting process.

The Company considers the role of its independent Directors to be critical to the objectivity of decisions made by the Board and in striking an appropriate balance of the interests of all stakeholders for the Company’s long term benefit. The Board has identified a Senior Independent Director to whom concerns raised by shareholders and other interested parties regarding the Company may be conveyed and addressed as well as act as an intermediary for other Directors when necessary. (Practice 2.1 of MCCG 2017)

3.3.   Compensation

Each Director is entitled to remuneration out of the funds of the Company as the Directors determine, in accordance with, and subject, to the Constitution of the Company.

The non-executive members of the Board of Directors receive a fixed base fee and allowances as consideration for their Board duties. In addition, the Board members may receive a fixed fee and allowances for their work on committees established by the Board.

The remuneration of the Board of Directors is determined on the basis of market benchmarking and reflects demands for competencies, time commitments and efforts in the light of the scope of their work and the number of Board and Committee meetings required and held for the year.

The total fees, allowances and other benefits payable annually to the non-executive Directors have to be approved by shareholders in general meeting.

No Board members, whether executive or non-executive, will be involved in deciding his own remuneration.

The Board should report to the shareholders on the Directors’ remuneration and shall be included in the Annual Report.

3.4.   Expertise

Members of the Board must have appropriate skills and experience. The following procedure will be followed when considering potential Board candidates:

  • the skills and experience appropriate for an appointee will be determined, having regard to those of the existing Directors and any other likely changes to the Board;
  • upon identifying a potential appointee, their competencies and qualifications, independence, other directorships, expected time commitment and the effect that their appointment would have on the overall balance of the composition of the Board and diversity of views and opinions will be considered; and
  • the proposed appointee must be approved by all existing Board members.

3.5.   Diversity

The Board recognises the value of appointing individual Directors who brings diverse opinions, skills, experience and backgrounds to its discussions and decision-making processes.  As such, it is the Board’s policy during the selection of new Directors to take into account the diversity of the candidate’s gender, age and racial background as well as their skills and experience as described in the preceding section.

In identifying candidates for appointment of Directors, the Board does not solely rely on recommendations from existing Board members, Management or major shareholders. The Board utilises independent sources to identify suitably qualified candidates. (Practice 4.6 of MCCG 2017)

4.  Duties, responsibilities and powers of the Board

4.1.   Management of the business of the Company

The Directors are responsible for managing the business of the Company and may exercise all the powers of the Company which are not required, by the Companies Act 2016, the Memorandum and Constitution or the MMLR , to be exercised by the Company in general meeting.

4.2.   Matters reserved for the Board

Matters which are reserved for the Board include:

  • in conjunction with Management, establishing a vision and strategies for the Company;
  • approving the Company’s annual business plan and budget;
  • approving the risk management framework and internal control policies and procedures for the Company;
  • approving the appointment of the internal auditor and the annual internal audit plan;
  • approving specific items of capital expenditure and investments and divestments above certain financial thresholds;
  • appointing and approving the terms and conditions of appointment of the Chief Executive Officer (“CEO”) and the total pay-out of bonuses and salary increments to the employees of the Company;
  • approving the remuneration and performance-based policies of the Company;
  • appointing Directors to the Board;
  • approving the quarterly, half-year and full-year financial statements;
  • approving the interim and final dividends to shareholders;
  • approving any significant changes to accounting policies;
  • approving the terms of reference and membership of Board Committees; and
  • approving Company policies which may be developed from time to time.

4.3.   Compliance with laws and internal codes of conduct

The Directors must comply with all relevant requirements of law, including those set out in the Companies Act 2016 and relevant common law duties.

In addition, all Directors must comply with the Code of Conduct in carrying out their duties and representing the Company, developed and approved by the Board from time to time.

4.4.   Delegation of powers

The Directors may resolve to delegate any of their powers to an officer, agent or attorney and the officer, agent or attorney must exercise the powers delegated in accordance with any directions of the Directors. Regular review of the division of responsibilities should be conducted to ensure that the Company is able to adapt to changing business circumstances. (Practice 2.1 of MCCG 2017)

4.5.   Establishment of Committees

The Directors may resolve to delegate any of their powers to a committee or committees consisting of such number of directors as they think fit.

A committee to which any powers have been so delegated must exercise the powers delegated in accordance with any directions of the Directors.

The Board has set up the following Board Committees to undertake specific functions:

  • Audit and Risk Management Committee
  • Nominating and Remuneration Committee
  • Long Term Incentive Plan Committee

Memberships of all the Board Committees comprised solely of non-executive Directors, the majority of whom are independent non-executive Directors. The respective terms of references of of the Board Committees are set out on the Company’s website at http://www.mbmr.com.my

4.6.   Chairman and Chief Executive Officer (“CEO”)

The positions of Chairman and CEO are held by separate persons to ensure a balance of power at the Board level and to promote accountability as well as to allow for a clear division of responsibilities between the Board and executive management. As the Chairman’s position is non-executive, the CEO has the primary responsibility for the day-to-day management of the business and affairs of the Company and the implementation of the Board’s decisions.

The responsibilities of the Chairman include:-

  • Providing leadership for the Board so that the Board can perform its responsibilities effectively;
  • setting the Board agenda and ensuring that Board members receive complete and accurate information in a timely manner;
  • the proper and effective conduct of proceedings at Board meetings and discussions;
  • ensuring participation and contribution of value from all Directors;
  • promoting constructive and respectful dialogue among the Directors at Board meetings and between Directors and the Management;
  • managing the interface between Board and Management;
  • ensuring appropriate steps are taken to provide effective communication with stakeholders and that their views are communicated to the Board as a whole;
  • chairing and promoting the effective conduct of general meetings of the Company;
  • leading the Board in establishing and monitoring good corporate governance practices in the Company

(Practice 1.2 of MCCG 2017)

The responsibilities of the CEO include:

  • proposing and implementing the business strategies and objectives of the Company;
  • day-to-day management of the business and affairs of the Company;
  • ensuring that the Company has in place adequate risk management and internal controls in compliance with policies and procedures approved by the Board;
  • ensuring the Company complies with financial reporting standards, the MMLR and other applicable laws;
  • responsibility for the implementation and running of the Environmental, Social, Governance and Diversity programme of the Company;
  • bringing material and other relevant information to the attention of the Board in a complete and timely manner;
  • representing the Company in dialogues and communications with shareholders, the media and other members of the public.

4.7       Board evaluation and performance

The Board undertakes a formal and objective annual evaluation to determine the effectiveness of the Board, its Committees and each individual Directors. The Board also disclose how the assessment was carried out and its outcome.

The Board will entail the periodic engagement of independent experts to facilitate objective and candid Board evaluations, as and when necessary.

The annual assessment on individual Directors includes an evaluation of their:-

  • Will and ability to critically challenge and ask the right questions;
  • Character and integrity in dealing with potential conflict of interest situations;
  • Commitment to serve the Company, due diligence and integrity; and
  • Confidence to stand up for a point of view.

(Practice 5.1 of MCCG 2017)

5.  Proceedings

5.1.   Meeting frequency

The Directors may hold meetings for the despatch of business and adjourn and otherwise regulate their meetings as they think fit. Directors’ meetings are held on scheduled dates at least five times a year.

5.2.   Board papers

Relevant documents to be considered at Board meetings will be compiled and distributed by Management to all Directors as well as to any invitees at least five business days in advance of the Board meetings with sufficient time given to the Directors for review of the documents before the meetings. (Practice 1.5 of MCCG 2017)

The agenda should be prepared taking into account the formal schedule of matters reserved for the Board’s decision. (Recommended by CG Code – 3rd Edition)

5.3.   Attendance at Board meetings

The Board may extend an invitation to any person to attend all or part of a scheduled Board meeting. The Board may appoint and consult any external advisors or third party service providers in respect of any matter before the Board.

5.4.   Quorum and Voting

A quorum for a meeting of the Board is two Directors. Only Board members shall be eligible to vote at a Board meeting except where a Board member has an interest in a matter before the Board.

5.5.   Minutes

Minutes of proceedings and resolutions of meetings of the Directors and any written resolutions passed by Directors, are to be recorded and entered in the Company’s Minutes Book Register within one month or as soon as practicable after the meeting is held or the resolution passed.

Board members should ensure that minutes of Board meetings accurately reflect the deliberations and decisions of the Board, including whether any Director abstain from voting or deliberating on a particular manner. (Practice 1.5 of MCCG 2017)

Minutes of a meeting must be signed by the chairperson of the meeting or the chairperson of the next meeting within a reasonable time after the meeting.

A resolution may be made if a document containing the relevant resolution is assented to by all Board members eligible and willing to participate in the making of the resolution.

The resolution will be taken to have been passed when the document is last assented to by a Board member. Where a Board member has assented by means other than writing, that Board member must sign the document containing the relevant resolution within a reasonable time after having provided their assent.

5.6.   Access to Information and Independent Professional Advice

The Directors are able to and do generally seek further information, advice and comments from the Company Secretary, Head of Internal Audit, Head of Risk Management and Compliance, Financial Controller and the General Counsel as and when considered appropriate pertaining to the Company. Directors also have access to the services of external independent professional advisers or consultants for the proper discharge of their duties at the Company’s expense should the need arise. (Para 15.04 of MMLR)

6.  Orientation and Continuing Education

On appointment, Directors take part in an induction programme where they receive the latest information about the Company. This is supplemented by visits to key locations and meetings with senior executives. Directors are also reminded on appointment of their legal and other obligations as a Director of a public-listed company.

In addition to the Mandatory Accreditation Programme required by the Exchange, Directors are required to update their knowledge and skills through continuing education programmes arranged by the Company or by external providers.

7.            Company Secretary

The Board appoints the Company Secretary for the Company. The Company Secretary plays an important role in providing sound governance advice, advocating adoption of corporate governance best practices and advising the Board on compliance with the MMLR, the Companies Act 2016 and other relevant laws and regulations.

The Company Secretary’s duties and responsibilities includes among others:

  • Statutory duties specified under the Companies Act 2016 and the MMLR;
  • Facilitating and attending Board and Board Committee meetings and ensuring that the meetings are properly convened and proceedings are properly recorded;
  • Facilitating Board communications and ensuring timely communication of Board level decisions to the Management;
  • Ensuring that all appointments to the Board and Board Committees are properly made;
  • Maintaining records for the purposes of meeting statutory obligations;
  • Providing information as may be requested by the Directors from time to time;
  • Advise the Board on corporate disclosures and compliance with company and securities regulations and MMLR;
  • keep the Board and the Management updated on any changes or updates on corporate disclosures or any other relevant statutory regulations;
  • Supporting the Board in ensuring adherence to Board policies and procedures including the compilation and dissemination of the results of the Board and Board Committees Assessment;
  • Manage process pertaining to the Annual General Meeting;
  • Monitor corporate governance developments and assist the Board in applying governance practices to meet the Board’s need and stakeholders’ expectations; and
  • Serve as a focal point for stakeholders’ communication and engagement on corporate governance issues.

(Practice 1.4 of MCCG 2017)

8.            Investor Relations and Communications with Shareholders

MBMR has a corporate disclosure policy which seeks to promote effective communication to its shareholders and other stakeholders. The policy emphasises timely and complete disclosure of all relevant information to shareholders as required by the MMLR and applicable laws and is in line with MBMR’s policy of building and maintaining a sustainable business based on delivering value to its shareholders. The communication channels include MBMR’s annual report, disclosures and announcements made to the Exchange, analyst briefings, press statements and other public communications, notices of meetings and explanatory documents issued to shareholders.

As part of the Board’s responsibility in developing and implementing an investor relations programme, regular formal and informal dialogues are held between senior Management and analysts/fund managers throughout the year.

The Annual General Meeting is the principal forum for dialogue with shareholders. MBMR makes every effort to encourage maximum participation of shareholders at the Annual General Meeting and extraordinary general meetings. Notice of the Annual General Meeting and Annual Report are sent out to shareholders at least 28 days before the date of meeting. (Practice 12.1 of MCCG 2017)

Aside from general meetings, MBMR encourages shareholders to provide feedback and raise queries to the Company through other channels of communication including the use of the corporate website, by email or sending written communications to MBMR’s Company Secretary, the Senior Independent Director or to the Company directly.

9.  Amendment and review

The Board must review this Charter on an annual basis to ensure it remains consistent with its objectives, the Company’s Constitution and existing regulatory requirements and recommendations.

Any updates to the principles and practices set out in this Board Charter will be made available on the Company’s website.

Subsidiaries & Associates