Pesona Metro Berhad | Construction, Polyurethane Products, Modular Panels, Developer
  • 1. Introduction

    The Board of Directors ("the Board") is responsible for the stewardship of Pesona Metro Holdings Berhad ("PMHB" or "the Company")'s business and affairs on behalf of PMHB's shareholders with a view to enhance long term shareholders value as well as investor interest while taking into account the interests of other stakeholders and maintaining high standards of transparency, accountability and integrity.

    The Board is expected to act in a professional manner, thereby upholding the core values of integrity and enterprise with due regard to their fiduciary duties and responsibilities.

    This Board Charter shall constitute, and form, an integral part of each Director’s duties and responsibilities.

    2. The Board

    2.1 Composition, Board Balance and Appointments

    The Board shall have a right mix and balance comprising qualified individuals with diverse experience, expertise, background and perspectives for an effective Board.

    The Board recognises the importance of ensuring a balance of power and authority between the Chairman of the Board ("the Chairman") and the Managing Director with clear division of responsibilities between the running of the Board and the Company's business respectively. The roles of the Chairman and the Managing Director shall be distinct and separate, and these positions must be held by different individuals.

    The Board shall appoint a Senior Independent Director to whom shareholders' concerns can be conveyed.

    The Constitution of the Company stipulates a minimum of two (2) Directors and a maximum of fifteen (15) Directors. The Board is cognizant of the need to keep its size at a reasonable level vis-à-vis the composition and size of the Board is such that it facilitates the making of informed and critical decision-making.

    At any one time, at least two (2) or one-third (1/3), whichever is higher, of the Board members are Independent Directors.

    The appointment of a new Director shall be made in consultation with the Nomination Committee. All Board appointments will be based on objective criteria, merit and with due regard for diversity in skills, experience, age, cultural background and gender, taking into account the nature of the industry in which the Company and its subsidiaries ("the Group") operate.

    A new candidate for appointment as Director should commit sufficient time to attend Board and/or Board Committee meetings and attend to the affairs of the Company before accepting his/her appointment to the Board.

    2.2 External Board Appointments

    Any Board member, whilst holding office, is at liberty to accept other board appointments (outside the Group) so long as the appointment is not in conflict with the business of the Company and Group and does not detrimentally affect the Director's performance as a Board member.

    All Board members shall notify the Chairman of the Board ("the Chairman") before accepting any new directorship. The notification shall include an indication of time that will be spent on the new appointment.

    The Chairman shall likewise notify the Board if he/she has any new directorship or significant commitments outside the Company.

    2.3 Re-election of Directors

    The Constitution of the Company provides that every newly appointed Director (appointed by the Board) shall be subject to re-election at the Company's next Annual General Meeting ("AGM") subsequent to their appointment. One-third of the Board shall retire from office and be eligible for re-election at every AGM. All Board members are subject to retirement by rotation and re-election by shareholders at least once in every three (3) years.

    2.4 Tenure of Independent Directors

    The Independent Directors whose tenure exceeds a cumulative term of nine (9) years may continue to serve on the Board subject to the Director's re-designation as a Non-Independent Director.

    The Board shall justify and seek shareholders' approval in the event it retains as an Independent Director, a person who has served in that capacity for more than nine (9) years.

    If the Board continues to retain the Independent Director after the twelfth (12th) year, the Board shall seek annual shareholders' approval through a two-tier voting process - Tier 1: large shareholders and Tier 2: other shareholders.

    2.5 Roles and Responsibilities of the Board

    The principal responsibilities of the Board are:-

    (a) to review and adopt a sustainable strategic business development plan for PMHB;
    (b) to oversee the conduct of the businesses and evaluate whether or not the businesses are being properly managed;
    (c) to identify principal risks and ensure the implementation of appropriate systems to manage these risks;
    (d) to implement succession planning including appointing new Directors, identifying training needs, assessing the performance of Directors and Board Committee members;
    (e) to ensure there are programmes in place to provide for the orderly succession of Senior Management;
    (f) to review the adequacy and integrity of the Company’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines including ormalizing ethical values through a code of conduct;
    (g) together with Senior Management, promote good corporate governance culture within the Company which reinforces ethical, prudent and professional behavior;
    (h) review, challenge and decide on Management's proposals for the Company and monitor its implementation by Management;
    (i) ensure that the strategic plan of the Company supports long-term value creation and includes strategies on economic, environmental and social considerations underpinning managed;
    (j) set the risk appetite within which the Board expects Management to operate and ensure that there is an appropriate risk management framework to identify, analyse, evaluate, manage and monitor significant financial and non-financial risks;
    (k) ensure that the Company has in place procedures for effective communication with stakeholders; and
    (l) ensure the integrity of the Company’s financial and non-financial reporting.

    2.6 Formal schedule of matters

    A schedule of matters reserved for the collective decision of the Board is listed in Annexure A. The Schedule is non-exhaustive and may be amended by the Board from time to time when deemed necessary.

    2.7 Code of Conduct

    The Board shall formalise and maintain a set of ethical standards of behaviour expected of all Directors, Management, employees and, where applicable, counterparts and business partners through the Group’s Code of Conduct and together with Management, implement its policies and procedures, which include managing conflicts of interest, preventing the abuse of power, corruption, insider trading and money laundering.

    The policies of the Group's Code of Conduct should be integrated into group wide management practices.

    2.8 Declaration of Interests

    The Constitution of the Company stipulates that a Director who is in any way, whether directly or indirectly interested in a contract or proposed contract with the Company shall declare his/her interest in accordance with the provisions of the Companies Act 2016. The Director concerned shall not participate in deliberations and shall abstain from voting on any matter arising therefrom.

    Should there be an actual, potential or perceived conflict of interest between the Company or a related corporation and a Director or an associate of a Director as a spouse or other family members, the Director involved shall make full disclosure and act honestly in the best interests of the Company.

    The Directors shall perform an annual self-declaration on independence (i.e. for Independent Non-Executive Directors) and annual/ adhoc declaration of shareholding including related party transactions and/or conflict of interest situations, if any for the Company’s records (i.e. for all Directors).

    2.9 Induction and Training

    The Board shall facilitate the induction and training programmes for newly appointed Directors, wherever appropriate.

    The induction shall include the following:

    (a) time with other officers of the Company (in particular the Chairman, the Company Secretary and if the Independent Director is a functional specialist, his or her counterpart);
    (b) furnishing a copy of the minutes of the previous Board meetings for the last two (2) quarters prior to the appointment, the business strategic plan,pertinent management reports, profile of key competitors and significant reports by consultants on areas of Board responsibilities;
    (c) visits to key sites (including overseas locations if such business units are integral and significant to the Company); and
    (d) an induction programme of about 1 to 2 days focusing on the above key elements and also presentations from various divisions within the Company on their strengths, weaknesses and aspirations.

    In addition to the Mandatory Accreditation Programme as required by Bursa Malaysia Securities Berhad, the Directors shall continue to update their knowledge and enhance their skills through appropriate continuing education programmes which are relevant to the Group's operations and business.

    The Board through the Nomination Committee will assess the training needs of the Directors annually, and ensure Directors have access to continuing education programmes to enable them to effectively discharge their duties and sustain active participation in the Board's deliberation.

    The costs of the induction or continuing education programmes shall be borne by the Company.

    3. Roles of the Chairman, Managing Director, Executive and Non-Executive Directors, Senior Independent Directors and Individual Directors

    3.1 The Chairman

    (a) provides leadership for the Board so that the Board can perform its responsibilities effectively:
    - ensures that the board plays a full and constructive part in the determination of the Company’s strategies and policies, and that board decisions taken are in the Company’s best interests and fairly reflect board’s consensus; and
    - ensures that procedures are in place to govern the Board's operations;

    (b) sets the Board agenda and ensures that Board members receive complete and accurate information in a timely manner:
    - plans the Board meeting agenda in advance alongside the Company secretary and the Managing Director. Other Directors and key members of Management may also be consulted;
    - ensures the provision of accurate, timely and clear information to the other Directors; and
    - ensures all Directors are properly briefed on issues arising at Board meetings in a timely manner;

    (c) leads Board meetings and discussions:
    - ensures that adequate time is available for thorough deliberation of key issues; and
    - ensures that decisions are taken on a sound and well-informed basis, including by ensuring that all strategic and critical issues are considered by the Board;

    (d) encourages active participation and allows dissenting views to be freely expressed:
    - promotes a culture of openness and debate whilst ensuring that no one Director dominates the discussion; and
    - obtains suggestions and comments from directors and encourages those who are less vocal to be more proactive in providing views;

    (e) manages the interface between Board and Management:
    - acts as the main conduit between management and the Board; and
    - develops a positive relationship with the Managing Director;

    (f) ensures appropriate steps are taken to provide effective communication with stakeholders and that their views are communicated to the Board as a whole:
    - acts as a spokesperson for the Board; and
    - acts as the main representative of the Company alongside the Managing Director at shareholders' meetings and on other occasions where key or major actions are taken or statements are made in the name of the Company;

    (g) leads the Board in establishing and monitoring good corporate governance practices in the Company:
    - leads the creation of an effective corporate governance system, including the establishment of Board and terms of reference of Board Committees, Board Committee structures and induction as well as ongoing education programmes for Directors; and
    - oversees and facilitates the Board, Board Committee and Board member evaluation reviews and succession planning alongside the Chairman of the Nomination Committee.

    3.2 Managing Director

    The position of Managing Director in essence is to ensure the effective implementation of the Company's strategic plan and policies established by the Board, manage the daily conduct of the business to ensure its smooth operations, supervision and management of the Company subject to such directions and instructions from the Board.

    The Managing Director is accountable to the Board for the achievement of the Company's goals and objectives and observance of Management’s limits of authority.

    At each of its scheduled meetings, the Board should expect to receive from or through the Managing Director:
    (a) summary reports on the performance and activities of PMHB and specific proposals for strategic investment, tender participation, capital expenditure and acquisitions and disposals (if any);
    (b) such assurances as the Board considers necessary to confirm that Management's limits of authority are being observed;
    (c) report to the Board annually on the Managing Director succession planning process; and
    (d) report to the Board annually on the Company’s programme for developing management talent.

    The Managing Director is expected to act within all specific authorities delegated to him by the Board.

    Generally, the Managing Director is responsible to the Chairman/the Board for the following with regards to the Group:
    (a) executive management of the business covering, inter-alia, the development of a strategic plan, an annual operating plan and budget, performance benchmarks to gauge Management’s performance and the analysis of management reports;
    (b) developing long term strategic and short term profit plans, designed to ensure that the Company's requirements for growth, profitability and return on capital are achieved;
    (c) directing and controlling all aspects of the business operations in a cost effective manner;
    (d) effectively overseeing the human resource of the organization with respect to key positions and ensuring the general well-being of employees, determination of remuneration as well as terms and conditions of employment for Senior Management in consultation with the Board, where required and the issues pertaining to discipline of employees;
    (e) effectively representing the interest of the Group with major clients, government and their agencies and industries at large and to ensure general goodwill towards the Group and cooperation in planned development;
    (f) assuring the Company that its corporate identity, products and services are of high standards and are reflective of market environment;
    (g) providing assistance to the Board in discharging its duties; and
    (h) assisting the Chairman in organizing information necessary for the Board to deal with the agenda and for providing this information to Directors on a timely basis.

    3.3 Role of the Executive and Non-Executive Directors

    Executive Directors are, as employees, involved in the day-to-day management of the Company and Group. Non-Executive Directors can be further classified as:
    • those who have no direct or indirect pecuniary interest in the Company other than their Directors' emoluments and their "permitted" holdings of shares in the Company;
    • those who are not employees of the Company or affiliated with it in any other way and are not involved in the day-to-day running of business but may have pecuniary interest in the Company, whether direct or indirect; or
    • those who are not employees of the Company but are standing as nominees for substantial shareholders.

    The Companies Act 2016 makes no distinction between Executive and Non-Executive Directors in terms of the legal duties that are imposed on Directors.

    Non-Executive Directors may act as a bridge between Management, shareholders and other stakeholders. They should provide the relevant checks and balances, focusing on shareholders' and other stakeholders' interests and ensuring that high standards of corporate governance are applied.

    3.4 Senior Independent Director

    The roles and responsibilities of the Senior Independent Director shall include the following:
    (a) act as a sounding Board for the Chairman;
    (b) serves as the principal conduit between Independent Directors and the Chairman on sensitive issues; and
    (c) be the point of contact for shareholders and other stakeholders for areas that cannot be resolved through the normal channels of contact with the Chairman or Managing Director.

    3.5 Independent Directors

    Independent Directors are essential for protecting the interests of shareholders and can make significant contributions to the Company's decision making by bringing in the quality of detached impartiality. Their role is focused on performance monitoring and enhancement of corporate governance and controls while providing an independent perspective of proposals and plans put forward by Managing Director and/or Executive Directors.

    Since an Independent Director has no conflict of interests in the discharge of his duties, he ought to approach any approval for a transaction or other matter that is being sought at the Board level with a watchful eye and with an inquiring mind.

    An Independent Director is especially important in areas where the interests of Management, the Company and/or the shareholders diverge, such as executive performance and remuneration, related party transactions and audit.

    It is important to bear in mind the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ("the Main Market Listing Requirements") emphasise that even if a person does not fall within any of the disqualifying indicators enumerated out in Paragraph 1.01, both the Director and the Board must give effect to the spirit, intention and purpose of the definition of an Independent Director. There must be a conscious application of the test of whether the Independent Director is able to exercise independent judgment and act in the best interests of the Company.

    The attributes of collegial yet independent decision-making that must be vested in the Independent Director will be determined in part by the character of the individual and that of the whole ethos of the Board.

    3.6 Individual Directors

    Directors are expected to comply with their legal, statutory and equitable duties and obligations when discharging their responsibilities as Directors. Broadly these include:
    (a) acting in good faith and in the best interest of the Company as a whole;
    (b) exercising due care and diligence;
    (c) avoiding conflict of interest wherever possible;
    (d) refraining from making improper use of information gained through the position of Director and from taking improper advantage of the position of Director;
    (e) keeping himself/herself abreast of changes and trends in the business and in the Group’s business environment and markets and changes and trends in the economic, political, social, legal and regulatory climate that could affect the business of the Group; and
    (f) devoting sufficient time to prepare for and attend Board and Board Committee meetings, attend Directors’ continuous training programme and briefings.

    4. Board Committees

    4.1 Board Committees and Terms of Reference

    The Board may from time to time establish Board Committees as it may consider appropriate to assist the Board in carrying out its duties and responsibilities. The Board delegates certain functions to the following Board Committees to assist in the execution its duties and responsibilities:
    (a) Audit Committee;
    (b) Nomination Committee;
    (c) Remuneration Committee;

    The Board Committees shall operate under clearly defined terms of reference. The Board Committees are authorised by the Board to deal with and deliberate on matters delegated to them within their terms of reference. The Chairman of the respective Board Committees reports to the Board on the outcome of the Board Committee meetings and such minutes will be included in the Board papers.

    4.2 Board and Board Committee Evaluation

    The Board, through the Nomination Committee, shall undertake a formal annual evaluation of its own performance and effectiveness, including the assessment on the Board as a whole, Board Committees and individual Directors. The Nomination Committee and the Board will consider the assessment results from the annual evaluation to determine the re-election of Directors.

    The Board shall also assess the independence of the Independent Directors annually. Emphasis of assessing independence should be focused beyond the background, economic and family relationship of the Director. Criteria for the assessment shall be in line with the definition of “Independent Director” in the Main Market Listing Requirements.

    5. Remuneration of Directors

    The Board, with the assistance of the Remuneration Committee, shall develop and administer a procedure for setting policy on remuneration of Directors and Senior Management.

    Directors who are shareholders should abstain from voting at general meetings to approve their fees. Similarly, the Managing Director and Executive Directors should not be involved in deciding their own remuneration.

    6. Meetings

    The Board shall conduct at least four (4) scheduled meetings annually, with additional meetings to be convened as and when necessary. Members of the Management team who are not Directors may be invited to attend and speak at meetings on matters relating to their respective areas of responsibilities.

    The Constitution of the Company stipulates the procedures for convening Board meetings and the board size and the quorum for board meetings.

    Board meeting agendas shall be the responsibility of the Chairman with input from Board Members and the Company Secretary. The Chairman may also request Management to participate in this process.

    Management shall be responsible for providing the Board with the required information in an appropriate and timely manner. Meeting materials should be circulated at least five (5) business days in advance of the meetings.

    Full Board minutes of each Board meeting shall be kept at the Registered Office of the Company and be available for inspection by the Directors during office hours.

    7. Access to Information and Independent Advice

    The Directors shall, collectively or individually, have unrestricted access to the advice of the Company Secretary and Senior Management and may also seek independent professional advice and information in the furtherance of their duties and responsibilities at the Company's expense, so as to ensure that the Directors are able to make independent and informed decisions.

    Fees for independent professional advice shall be payable by the Company subject to the following:-
    (a) first, discuss with the Chairman;
    (b) provide a written notice to the Company Secretary of the intention to seek independent advice with brief summary of the subject matter; and
    (c) the Board shall be notified and approval be obtained prior to the engagement of the professional advisors.

    Independent advice sought shall exclude those of personal interests relating to the Director's personal disputes in matters that are not related to or affect the Board or the Company as a whole.

    The Board acknowledges that confidential information received in the course of exercise of the Board’s duties remains the property of the Company, whether it relates to the Company or another entity. It will not be disclosed unless either the Chairman or the Board has so authorised in writing or disclosure is required by law.

    8. Company Secretary

    8.1 Appointment and removal of Company Secretary

    The Board consults the Company Secretary on procedural and regulatory requirements and as such, the latter plays an important role in supporting the Board by ensuring adherence to Board policies and procedures.

    The appointment and removal of Company Secretary is a matter for the Board as a whole. The Board recognises that the Company Secretary shall be suitably trained, experienced, professionally qualified and capable of carrying out the duties required of the position. Qualifications may be determined subject to academic qualifications, experience in related field and/or by virtue of examination and membership with professionally recognised institutions.

    On an annual basis, the Company Secretary’s performance shall be appraised by the Board.

    8.2 Roles and Responsibilities of Company Secretary

    The Company Secretary shall provide unhindered advice and services for the Directors as and when the need arises, to enhance the effective functioning of the Board and to ensure regulatory compliance. The responsibilities of the Company Secretary shall include:
    (a) attending Board and Board Committees meetings as well as general meetings and ensuring the proceedings of meetings are recorded and the minutes circulated in a timely manner;
    (b) advising the Board on its roles and responsibilities;
    (c) updating the Board on corporate disclosures and compliance with the Main Market Listing Requirements, company and securities legislations, and related regulations;
    (d) advising the Board on governance matters;
    (e) maintaining records of the Board and ensure effective management of the organisation records; and
    (f) carrying out other functions as deemed appropriate by the Board from time to time.

    9. General Meetings

    All Directors and the Chairs of Board Committees must attend General Meetings to provide meaningful response to questions raised addressed to them.

    Any resolution set out in the notice of any general meeting, or in any notice of resolution which may properly be moved and is intended to be moved at any general meeting, shall be voted by poll.

    The notice of AGM shall be sent out to shareholders at least twenty-eight (28) days before the date of the AGM.

    10. Stakeholders' Communication and Investor Relations

    The Board looks to Management to speak on behalf of PMHB and manage the communication of information to shareholders, investors, other stakeholders and the public in an orderly and effective manner while adhering, at all times, to relevant laws and regulatory requirements.

    The Board authorises its Managing Director (or his/her nominated person) to be the official spokesperson for PMHB.

    The Board shall have corporate disclosure policies and procedures to ensure comprehensive, accuracy and timeliness. These policies and procedures shall ensure compliance with the relevant disclosure requirements as spelt out in the Listing Requirements.

    The Company shall 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.

    11. Risk Management Framework

    The Board shall set the level of risk tolerance for the Group’s business to reflect the long-term corporate strategies of the Group.

    The risk tolerance levels determined by the Board shall be embedded into the Company's risk culture which serves as a guidance in decision-making processes for both strategic and operational matters.

    Risk Management within the Company allows for risks to be identified, measured and treated in the context of the Company’s risk culture. Risk Management shall be applied consistently throughout the Company.

    The Board shall establish a sound risk management and internal controls systems that articulates, implements and monitors key business risks to safeguard the shareholders and Company.

    The Board shall periodically review the risk positioning of the Company and ensure it lies within the range of risk tolerance levels determined by the Board. Risk management should be included into the meeting agenda of the Board as a standing item for the Board to deliberate on key risks which could have substantial impact on the sustainable performance or development of the Company.

    12. The Constitution of the Company and Management's Limits of Authority

    The Board operates pursuant to the powers conferred by the Constitution of the Company including any changes thereof as approved by the shareholders at general meeting.

    Management is expected to act within all specific authorities delegated to it by the Board as per the Group’s limits of authority.

    Management is expected not to cause or permit any practice, activity or decision that is contrary to commonly accepted good business practices or professional ethics.

    13. Sustainbility and Social Respondsibility

    The Board recognises the need for strategies and plans to promote and contribute towards sustainable development, with particular focus on the environmental, social and governance aspects of the business.

    The Company shall strive to maintain a safe and conducive work environment for its employees and adopts documented policies and procedures as part of its commitment towards Quality, Health, Safety and Environment.

    14. Review of the Board Charter

    The Board Charter shall be periodically reviewed and updated in accordance with the needs of the Company and any new regulations that may have an impact on the discharge of the Board’s duties and responsibilities.

    The Board Charter is made available for reference in the Company's website.

    The Board Charter was last reviewed by the Board on 27 February 2018.

    Annexure A

    Schedule of Matters Reserved for the Board

    (1) Strategy and Operations

    (a) Strategic business plans, mergers and acquisitions of a substantial value;
    (b) Major investment or divestment of business, property or undertaking;
    (c) Annual budget (including capital expenditure budget);
    (d) Investment or divestment of a capital project which represents a significant diversification from the Company’s existing business activities;
    (e) Limits of authority for the Company;
    (f) Extension of the Group’s activities into new business or geographic areas;
    (g) Any decision to cease to operate all or any material part of the Group’s business;
    (h) Provision of indemnities or corporate guarantees.

    (2) Financial Reporting and Controls

    (a) Quarterly financial results following recommendations from the Audit Committee;
    (b) Annual Report including statements and reports contained therein;
    (c) Audited Financial Statement based on recommendations from the Audit Committee;
    (d) Declaration of interim dividends and recommendation of final dividends;
    (e) Any significant changes in accounting policies or practices following recommendations from the Audit Committee and adoption of accounting policies in line with the Malaysian Financial Reporting Standards.

    (3) Internal Controls

    Ensuring maintenance of a sound system of internal control and risk management, including approving an appropriate statement for inclusion in the Annual Report.

    (4) Board Membership and Other Appointments

    (a) Changes to the structure, size and composition of the Board, based on recommendations of the Nomination Committee;
    (b) Approval of the Terms of Reference, membership of Board Committees etc.;
    (c) Scope and extent of delegations to Directors or Board Committees;
    (d) Appointment and removal of the Directors of the Company and changes to their executive positions all based on the recommendations of the Nomination Committee;
    (e) Selection and appointment of the Chairman, Senior Independent Director, Chairman of Board Committees based on recommendations of the Nomination Committee;
    (f) Succession planning for the Board and Senior Management;
    (g) Appointment and removal of the Company Secretary;
    (h) Appointment, reappointment or removal of the External Auditor to be put to shareholders for the approval, based on recommendations of the Audit Committee;
    (i) Approval of the remuneration of the External Auditor and terms of engagement, based on recommendations of the Audit Committee.

    (5) Remuneration

    (a) Recommendation of Directors’ fees and benefits for Non-Executive Directors to be put to the shareholders for approval;
    (b) Approval of remuneration packages, including service contracts, for Executive Directors and Senior Management.

    (6) Other matters

    (a) Changes relating to the Group’s capital structure including reduction of capital, share issues and share buybacks;
    (b) Changes to the Group structure;
    (c) Changes to the Constitution of the Company;
    (d) Change in financial year end.