1.0 INTRODUCTION ON THE COMPANY
Naim Cendera Holdings Berhad was incorporated as a public company limited by shares under the Companies Act, 1965 (“Companies Act”) on 5 July 2002. On 13 March 2009, it assumed its current name Naim Holdings Berhad (“Naim” or “the Company”). The Company was listed on the Main Board of Kuala Lumpur Stock Exchange (now known as Bursa Malaysia Securities Berhad) (“Bursa Securities”) on 12 September 2003.
1.2 Vision, Mission and Core Values
The vision, mission and core values of the Group (comprising the Company and entities controlled thereby) are as follows:
1.2.1 Vision Statement
To be a TOP NOTCH GLOBAL property developer and infrastructure builder.
1.2.2 Mission Statement
To achieve our aspiration, we are committed to BUILD VALUE IN EVERY WAY, with you and for you by:
- Exceeding customer expectations
- Being the best place to work on earth
- Being the best company to invest in and do business with
- Being an exemplary corporate citizen that contributes generously to the society, community and environment
1.2.3 Core Values
S for Service-Oriented
Serve our customers courteously and promptly and offer service which exceeds customer expectations
P for Performance, Professionalism and Passion
Performance-driven; high level of skill & competence; committed to excellence
I for Integrity
Honest and transparent communication and operations
R for Respect
Appreciate and care for our colleagues, communities and environment
I for Innovation
Continuous learning and improvements on service, products and the way we do things
T for Teamwork
Share and collaborate as by working together, everyone achieves more
E for Empowerment and Engagement
Effective delegation of authority and high level of staff ownership and involvement
D for Discipline, Determination and Decisiveness
Persevere to achieve success and NEVER GIVE UP, and being able to decide issues with confidence
2.0 OBJECTIVES OF THE BOARD CHARTER
2.1 Purpose of the Charter
The Board comprises directors elected or appointed to jointly oversee the business activities and affairs of the Group. The Board shall exercise its powers and carry out its fiduciary duties with a sense of objective judgment and independence in the best interests of the Group.
The Board Charter serves as a reference for and providing insights to existing and prospective board members to assist them in the performance of their fiduciary duties as directors of the Board.
This Charter sets out the standards and principles governing the Board processes and outlines the roles, functions and responsibilities of the Board in accordance with the authority conferred by the Constitution of the Company along with the provisions of the Companies Act 2016, Bursa Securities Main Market Listing Requirements (“Listing Requirements”) and the principles set out in the Malaysian Code on Corporate Governance 2017 (“MCCG 2017”).
This Charter, which is subject to review and enhancement by the Board from time to time as it deems fit, was adopted by the Board on 23 February 2017.
3.0 RESPONSIBILITIES OF THE BOARD
The Company is governed by the Board whose responsibilities, amongst others, include the following:-
- formulating strategic direction and strategic plans for the Group;
- approving annual business plans and budgets;
- approving and/or recommending material acquisitions and disposals of assets;
- approving financial authority limits and changes thereto;
- implementing corporate governance;
- identifying principal risks and ensuring the implementation of appropriate systems to manage these risks;
- approving human resource planning and development;
- reviewing investments made by the Company;
- overseeing the proper conduct of businesses;
- reviewing the adequacy and the integrity of the Group’s internal control systems and management information systems;
- reviewing and endorsing recommendations from Board Committees,
- reviewing financial results and financial statements;
- approving interim dividend payments and recommending final dividend payments to shareholders for approval;
- reviewing major issues and/or opportunities
- managing changes to the composition of the Board and Board Committees;
- sourcing for and managing banking facilities;
- implementing long-term or share incentive plans; and
- approving and recommending corporate proposals to shareholders for approval.
4.0 COMPOSITION OF THE BOARD
4.1 The Company’s Constitution (“Constitution”) provides for a minimum of two (2) and maximum of fifteen (15) Directors1.
4.2 The Company must ensure that at least two (2) directors or one third (1/3) of the Board, whichever is higher, shall be Independent Non-Executive Directors (“INEDs”)2.
4.3 The Board shall comprise a diverse group of individuals with broad experiences and accomplishments in various fields. Their combined expertises and business experiences shall provide insight and diversity of perspectives to lead and guide the Group.
5.1 An Independent Director means a director who is independent of management and free from any business or other relationship which could interfere with the exercise of independent judgment or the ability to act in the best interests of the Group. Without limiting the generality of the foregoing, an independent director is one who:
- Is not an executive director of Naim or any related corporation of the Group;
- Has not been within the last 2 years and is not an officer (except as a non-executive director) of Naim and/or the Group;
- Is not a major shareholder of Naim and/or any entity of the Group;
- Is not a family member of any executive director, officer or major shareholder of Naim and/or any entity of the Group;
- Is not acting as a nominee or representative of any executive director or major shareholder of Naim and/or any entity of the Group;
- Has not been engaged as an adviser by Naim and/or the Group or is not presently a partner, director or major shareholder as the case may be, of a firm or corporation (other than the Naim and/or the Group) which has engaged in any transactions with Naim and/or the Group
5.2 The Company has adopted a 9-year3 policy for Independent Non-Executive Directors and taking into account the need for progressive refreshing of the Board.
5.3 Whilst an independent director may continue to serve on the Board, upon completion of a cumulative term of nine (9) years, he is subject to the director’s re-designation as a non-Independent Director..
5.4 The Board may seek shareholders’ approval for retaining a person who has served in that capacity for more than nine (9) years, as an INED, the Nominating Committee/Board must conduct a rigorous review to determine whether the Director’s independence has been impaired, taking into account the need for progressive refreshing of the Board.
5.5 A candidate for appointment as an INED must first provide to the Nominating Committee (“NC”) a declaration and confirmation on his/her independence for the NC’s consideration in his/her appointment.
6.0 SEGREGATION OF ROLES
There are clear segregation of roles and responsibilities between the Chairman and the Group Managing Director (GMD) to ensure a balance of power and authority. The position of Chairman and GMD are separate and clearly defined. The Board may appoint a Senior Independent Non-Executive Director of the Board to whom concerns by stakeholders may be conveyed.
The Chairman is responsible for conducting meetings of the Board and shareholders and ensuring all Directors are properly briefed during Board discussions and shareholders are informed of the subject matters requiring their approval. The Chairman will act as facilitator at meetings of the Board. At Board meetings, the Chairman and the GMD may share a common role of providing leadership and guidance to the Board, facilitating effective contributions from Board members to ensure proper deliberation of all matters requiring the Board’s attention.
6.2 Group Managing Director (“GMD”)
The GMD is responsible for the overall management of the Group, ensuring that strategies, policies and matters set by the Board are effectively implemented. The GMD will regularly review the performance of the Deputy Managing Directors and all heads of divisions and departments who are responsible for all functions contributing to the success of the Group.
6.3 Deputy Managing Director
As the name implies, he or she shall assist the GMD in the overall management of the the Group’s day to day operations.
6.4 Senior Independent Non-Executive Director
The Senior INED serves as a designated contact to whom concerns pertaining to the Group may be conveyed by shareholders and other stakeholders. The identity and contact of the Senior INED shall be disclosed in the annual report of the Company.
6.5 Non-Executive Directors
The Non-Executive Directors ensure that business and investment proposals presented by management are fully deliberated and examined. They perform a key role by providing unbiased and independent views, advice and judgment, which take into account the interests of the Group and all its stakeholders including shareholders, employees, customers, business associates and the community as a whole.
6.6 Independent Non-Executive Directors
Independent Non-Executive Director is one who has fulfilled the requirements of Independence as set out in item 5.1 above and his/her role is basically similar to Non-Executive Director as defined in item 6.5 above. Being independent of management and free of any business or other relationship, INEDs are expected to promote arms-length oversight and at the same time bring independent thinking, views and judgment to bear in decision-making.
7.0 APPOINTMENTS & RE-APPOINTMENTS TO THE BOARD
7.1 The Nominating Committee (“NC”) shall be responsible for selecting, assessing, evaluating and recommending new appointments of Executive and Non-Executive Directors to the Board and Board Committees. In discharging its duty, the NC will assess the suitability of an individual to be appointed to the Board and Board Committees by taking into account the individual’s commercial knowledge, business acumen skills, expertise and experience, professionalism and integrity.
7.2 In accordance with the Constitution, all Directors who are appointed by the Board shall retire from office at least once every three (3) years but shall be eligible for re-election at the Annual General Meeting (“AGM”). The Directors to retire in each year are those who have been longest in office since their last election or appointment4.
7.3 The Directors shall have powers at any time and from time to time to appoint any person to be a Director either to fill a casual vacancy or as an additional Director, but so that the total number of Directors shall not at any time exceed 15, the maximum number fixed by Article 84 of the Constitution. Any Director so appointed shall hold office only until the next AGM and shall then be eligible for re-election5, thereafter he shall be subject to the one-third rotation retirement rule.
7.4 A Director must not hold more than five (5) directorships in listed issuers6.
8.0 BOARD MEETINGS
8.1 Board meetings are scheduled in advance at the end of the prior calendar year to enable the Board members to plan their schedules accordingly.
8.2 A minimum of five (5) meetings a year shall be planned and additional meetings will be called at any time, as and when required.
8.3 The notice containing the agenda of a meeting shall be circulated by the Company Secretary to every member of the Board prior to the meeting.
8.4 All Board meetings shall be chaired by Chairman of the Board. Where the Chairman is absent, the Directors present shall elect one (1) of their members to be the Chairman of the meeting.
8.5 The quorum for each meeting shall be at least two (2) Directors7
8.6 In the absence of a meeting, issues shall be resolved by way of circular resolutions, signed by a majority of the directors present in Malaysia8.
8.7 The head of finance, internal audit and any other relevant departments are responsible to gather and supply the requisite copies of reports containing all necessary and essential information for the purpose of a meeting for the compilation and circulation by the Company Secretary prior to the meeting.
8.8 Appropriate key senior management personnel of the Group may attend such a meeting on an invitation basis.
8.9 Minutes of all proceedings of the Board meetings shall be signed by the Chairman of the meeting or by the Chairman of the next succeeding meeting. The minutes shall be evidence of the proceedings of Board meetings.
8.10 Where a potential conflict of interest arises, the Director concerned shall declare his or her interest and abstain from the decision making process.
9.0 BOARD COMMITTEES
9.1 The Board delegates certain responsibilities to the Board Committees, all of which operate within defined terms of reference to assist the Board in the execution of its duties and responsibilities.
9.2 The respective Committees report to the Board on matters discussed and deliberated and makes recommendations to the Board for final decision.
9.3 Board Committee meetings are also scheduled in advance at the end of the prior calendar year to enable the Board Committee members to plan their schedules accordingly.
9.4 The Board Committees comprise the following:-
9.4.1 Audit Committee (“AC”)
The AC assists the Board in the effective discharge of its fiduciary responsibilities, including timely and accurate financial reporting and development of sound internal controls.
9.4.2 Risk Management Committee (“RMC”)
The RMC assists the Board in overseeing the risk management process within the Group, leading the strategic direction in the management of the Group’s business risks, establishing and implementing a risk management framework and reviewing the effectiveness of the framework.
9.4.3 Nominating Committee (“NC”)
The NC assists the Board in conducting performance evaluation of the Board and its Committees, assessing the core competencies of each existing Board member and new appointment to the Board.
9.4.4 Remuneration Committee (“RC”)
The RC reviews and recommends to the Board, the Company’s overall remuneration policy and guidelines for GMD to ensure that the remuneration packages are strongly marked to market and linked to performance.
9.4.5 Long Term Incentive Plan Committee (“LTIP”)
The LTIP Committee is to implement the provisions of the Long Term Incentive Plan (“LTIP”) in accordance with the Bye-Laws set.
10.0 BOARD EFFECTIVENESS EVALUATION
10.1 The NC shall carry out the Board Effectiveness Evaluation (“BEE”) exercise annually to assess the performance and effectiveness of the Board as a whole, Board Committees and individual Directors.
10.2 The NC is responsible to develop a set of criteria with target areas of focus to assist the Board in evaluating the performance and effectiveness of the Board, Board Committees and individual Directors.
10.3 As part of the BEE process, all INEDs of the Company are required to provide to the Board a yearly declaration and confirmation of their independence in compliance with the criteria set out in the Listing Requirements to facilitate the annual assessment of the INEDs by the Board.
11.0 DIRECTORS’ REMUNERATION
11.1 The Company’s remuneration policy for Directors is designed to enable the Company to attract and retain experienced and knowledgeable individuals of the caliber needed to support the Company’s ambitious expansion plans in line with its overall objective of delivering long-term value to its shareholders. The remuneration packages are structured to incentivize and encourage creativity and innovation appropriate for a company of the size and complexity of the Company, whose core businesses are property development as well as building and infrastructure construction.
11.2 The RC recommends to the Board the remuneration package for the GMD which is structured on the basis of linking rewards to corporate and individual performance. Performance is measured against the results achieved by the Group and individual achievement against targets set at the beginning of each year. The Deputy Managing Director and Executive Directors (if any) shall report to the GMD and accordingly their remuneration packages are determined by the GMD.
11.3 Non-Executive Directors’ fee and allowance are determined based on the experience, level of expertise, responsibilities undertaken, time demanded of the Non-Executive Directors concerned and market benchmark.
11.4 No Director should be involved in determining his/her own compensation.
12.0 DIRECTORS’ TRAINING AND DEVELOPMENT
12.1 In addition to the Mandatory Accreditation Programme as required by Bursa Securities, the Directors are encouraged to attend various training programmes conducted by competent trainers and which are relevant to the Company’s operations and business.
12.2 The Company will, on an on-going basis, make available to the Directors, at the Company’s cost, professionally conducted programs to ensure they are acquainted with the latest development to equip themselves with the relevant knowledge and ideas to enable them to discharge their duties and participate actively during Board deliberations.
12.3 The Directors are required to disclose the trainings they have attended during a financial year in the Company’s Annual Report9.
13.0 ACCESS TO INFORMATION AND ADVICE
13.1 The Directors (Executive and Non-Executive) shall have the same unrestricted right of access to all information relating to the business, operations and governance of the Group in a timely manner whether as a full Board or in their individual capacity, in furtherance of their duties.
13.2 Directors are allowed and encouraged to seek independent and/or professional advice at the Company’s expense, on any matter they consider crucial to facilitate a business judgment and decision. However, before exercising this right they are required to discuss the issue with the Chairman and/or GMD to ensure that the interests of the Group are not jeopardized and that confidentiality is maintained.
14.0 CODE OF CONDUCT AND BUSINESS ETHICS
The Directors’ Code of Ethics is attached and marked Annexure A.
The Code of Ethics serves as a road map to help guide actions and behaviors while working for and/or dealing with the Company to maintain high standards of business ethics and encourage performance with integrity.
15.0 ANTI-FRAUD POLICY
The Group has in place an Anti-Fraud Policy statement and a Fraud Response plan to protect the integrity, transparency and impartiality of the businesses conducted by the Group and its personnel. The purpose of the Anti-Fraud Policy statement and Fraud Response plan is to assist and enable all employees, Directors, business associates or customers of the Group to raise concerns or to disclose information pertaining to malpractices they may have knowledge of or come across in their dealings with the Group and at the same time to protect those who come forward to report such activities. The Group assures that all reports will be treated with strict confidentiality and will be promptly investigated.
The Board will review this Charter from time to time to ensure that it is up to date and consistent with the Board’s objectives and responsibilities.
- Article 84 of the Constitution
- Paragraph 15.02(1) of the Listing Requirements
- Practice 2 of the MCCG 2017
- Article 85 of the Constitution
- Article 92 of the Constitution
- Paragraph 15.06(1) of the Listing Requirements
- Article 110(a) of the Constitution
- Article 128 of the Constitution
- Paragraph 15.08(3) of the Listing Requirements