Glossary

In this Charter :

“Act” means the Companies Act 2016 and any amendments from time-to-time;

“MAIN LR” means the MAIN Market Listing Requirements of Bursa Securities;

“AGM” means Annual General Meeting;

“Board” means the Board of Directors of the Company;

“Bursa Securities” means Bursa Malaysia Securities Berhad;

“Chairman” means the Chairman of the Board and is used in a gender-neutral sense;

“Charter” means the Board Charter of EKSONS;

“Company” or “EKSONS” means Eksons Corporation Berhad or whatsoever name called for the company bearing registration number 199001014145 (205814-V);

“Directors” means Directors of the Company as defined under the Act;

“Management” means the management personnel of the Company;

“Management Limitations” means the limitations on the actions of Management as set out in Paragraph 6.3;

“MCCG” means the Malaysian Code of Corporate Governance;

“Secretary” means the Company Secretary(ies) as provided under Subdivision 4 of Division 2 of the Act;

“Shareholders” means the shareholders of the Company; and

“EKSONS Group” or “Group” means the Company and its subsidiaries.

Unless there is something the subject or context inconsistent herewith, words incorporating the singular shall include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine gender and vice versa. 

Purpose and Overview

Every public-listed company should be headed by an effective Board, which can both lead and control the business.

This Charter is intended to serve as a set of standard and guidelines for the Board of the Company, and is also intended to provide a concise overview of: - 

1.           The delineation of the duties, responsibilities and powers of the Board and its Executive Directors and senior management of the Company with the aim of streamlining and enhancing corporate governance practices towards accountability, integrity and transparency in boardroom activities that involve the Group; and

2.      Board operating procedures and practices pertaining to meeting, selection, nomination and appointment, training and development, performance management and evaluation, code of conduct and declarations on conflicts of interest.

In adhering to the responsibilities set out in this Charter, Board members are expected to perform their duties with integrity, honesty and in a professional manner in accordance with the law in serving the interest of its members, employees, clients and the community.

This Charter is governed by, where applicable, the Constitutions of the Company, the Act, MCCG, MAIN LR, applicable regulatory and legislative requirements and other good practices on corporate governance. The clauses in this Charter do not overrule or pre-empt the statutory requirements of Directors enshrined in the Act, MAIN LR and other relevant statutes, including the conduct of the Board as stipulated in the Constitution of the Company. 

The Board and its Directors

Duties and responsibilities of the Board

All directors owe fiduciary duties to the Group and must exercise reasonable care, skill and diligence to ensure the proper management of the entity, including maximising long-term financial returns. The Board is responsible for ensuring that the Group are managed to achieve this result. The Board will direct and supervise the management of the business and affairs of the Group in the best interest of the shareholders.

For effective discharge of its functions, the responsibilities of the Board include:

(i)         To provide leadership and oversee the overall conduct of the Group’s businesses to ensure that the businesses are being properly managed;

(ii)         To set, review and adopt strategic plans, values and standards for the Group;

(iii)    To ensure that the Group’s strategic plan supports long-term value creation, focusing on economic, environmental, social and governance (ESG) considerations underpinning the sustainability of the Group in the Group’s strategies, business plans, major plans of action and risk and opportunity management;

           (iv)       To review, challenge and decide on management’s proposals for the Group and monitor its implementation by management;

 (v)      To promote, together with the senior management, good corporate governance culture within the Group which reinforce ethical, prudent and professional behaviour, including overseeing the ethical conduct of business and preventing bribery on the Group’s business;

           (vi)       To review and adopt corporate governance best practices in relation to risk and opportunity management, legal and                                    compliance management and internal control systems to safeguard the Group’s reputation, and the employees and assets                          and to ensure compliance with applicable laws and regulations;

           (vii)      To ensure that the Company has effective Board committees as required by the applicable laws, regulations, rules, directives                      and guidelines and as  recommended by MCCG;

 (viii)     To review and approve the annual business plans, financial statements and annual reports;

(ix)       To supervise and assess management performance to determine whether the business is being properly managed;

          (x)         To understand the principal risks and opportunities of the Group’s business and recognise that business decisions involve the                     taking of appropriate risks and opportunities;

          (xi)       To set the risk appetite within which the Board expects management to operate and ensure there is a sound risk and internal                     control management framework to identify, analyse, evaluate, manage, report and monitor significant financial and non-                           financial risks and opportunities faced by the Group;

          (xii)    To monitor the relationship between the Group and the management, shareholders and stakeholders, and to develop and                          implement an investor relations programme or shareholders’ communications policy for the Group;

         (xiii)     To ensure that the Group’s sustainability strategies, priorities and targets as well as performance against such targets are                          communicated to the Company’s shareholders and other stakeholders;

         (xiv)     To ensure that senior management has the necessary skills and experience, and there are measures in place to provide for                        the orderly succession of board and senior management;

         (xv)      To ensure the integrity of the Company’s financial and non-financial reporting;

         (xvi)     To appoint the Board committees, to delegate powers to such committees, to review the composition, performance and                            effectiveness of such committees, and to review the reports prepared by the Board committees and deliberate on the                                recommendations thereon;

          (xvii)    To establish an adequate Group-wide framework for co-operation and communication between the Company and its                                  subsidiaries to assist the Board in discharging its responsibilities including oversight of Group’s financial and                                              non-financial performance, business strategy and priorities, risk and opportunity management including corporate                                    governance policies and practices; and

          (xviii)   To establish and ensure the Group-wide framework on corporate governance includes a code of conduct and ethics, and                            policies and procedures  addressing and managing anti-corruption, whistleblowing, conflict of interest,  material                                        sustainability risks and board diversity, including gender diversity.

 The Board may choose to delegate some of these responsibilities to one or more of its Board Committees. This delegation of responsibilities will be reflected in the terms of reference of the respective Board Committees.

Size, Composition and Nomination

The size of the Board is stipulated in the Constitution of the Company. The composition of the Board shall at all times comprise at least two (2) directors or one-third (1/3) of the Board members, whichever is the higher, are independent directors. The size of the Board must be commensurate with the range of credential, knowledge, views and experience needed for effective functioning of the Board and the regulator’s requirement of independent directors.

The Board is supportive of gender diversity policy. The board will, if reasonably possible, maintain at least one (1) female director and will work towards having a minimum of 30% women as members of the Board. In its selection of Board members, the Board provides equal opportunity to all candidates who meet the criteria and other qualities vis-a-vis the Group’s present business portfolios and prospective investments.

In identifying candidates for appointment of Directors, the Board with the assistance of Nomination Committee shall utilise variety of independent sources to identify suitably qualified candidates, where appropriate.

The detailed profiles of nominated directors will be presented to Board by the Nomination Committee to assist the Board in their decision whether to confirm the appointment of the nominated directors.

All new Directors appointed to the Board shall undertake an induction program coordinated by the Managing Director.

Chairman of the Board

The Board is empowered by the Company to appoint a Chairman. In the absence of the Chairman, the Directors present must elect a Director present to chair the meeting. The positions of the Chairman and Managing Director/Chief Executive Officer are held by two (2) different individuals to promote accountability and facilitate division of responsibilities between them.

The role and key responsibilities of the Chairman

The role of the Chairman is to ensure that the Board is functioning effectively and the key responsibilities of the Chairman include:

• providing leadership for the Board so that the Board can perform its responsibilities effectively;
• leading the Board in the adoption and implementation of good corporate governance practices in the Company;
• setting the board agenda and ensuring that Board members receive complete and accurate information in a timely manner;
• leading Board meetings and discussions;
• encouraging active participation and allowing dissenting views to be freely expressed;
• managing the interface between Board and management; and
• ensuring appropriate steps are taken to provide effective communication with stakeholders and that their views are communicated to the Board as a whole.

Executive Directors

The key responsibilities of the Executive Directors are to:

• develop strategic direction of the Group;
• ensure Board decisions are implemented and Board directions are responded to;
• provide directions in the implementation of short and long-term business plans;
• provide strong leadership i.e., effectively communicating a vision, management philosophy and business strategy to the employees;
• keep the Board fully informed of all important aspects of the Group’s operations and ensure sufficient information is distributed to Board members; and
• ensure day-to-day business affairs of the Group are effectively managed.

Independent Directors

An independent director must fulfil the provisions and definition of ‘independent director’ of the MAIN LR at all times and must declare their independence to the Board annually.

The tenure of an independent director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an independent director may continue to serve on the Board subject to the director’s re-designation as a non-independent director. In the event the Board wishes to retain the independence status of an independent director, who has served in that capacity for more than nine (9) years, the Board must justify and seek shareholders’ approval through a two-tier voting process, as follows:-

 Tier 1: Only the Large Shareholder(s) of the Company votes

Tier 2: Shareholders other than Large Shareholder(s) votes

 Large Shareholder(s) means a person who –

• is entitled to exercise, or control the exercise of, not less than 33% of the voting shares in the Company;
• is the largest shareholder of voting shares in the Company;
• has the power to appoint or cause to be appointed a majority of directors of the Company; or
• has the power to make or cause to be made, decisions in respect of the business or administration of the Company, and to give such effect to such decisions or cause them to be given effect to.

The decision for the resolution is determined based on the simple majority of votes of Tier 1, and a simple majority of votes of Tier 2. The resolution is deemed successful if both Tier 1 and Tier 2 votes support the resolution. The resolution is deemed defeated where the vote between the two tiers differs or where Tier 1 voter(s) abstained from voting.

 The responsibilities of an Independent Director are to:

• provide and enhance the necessary independence and objectivity to the Board;
• ensure effective checks and balances on the Board;
• mitigate any possible conflict of interest in policy-making process and the day-to-day management of the Group;
• constructively challenge and contribute to the development of business strategy and direction of the Group; and
• ensure that adequate systems and controls to safeguard the interests of the Group are in place.

Managing Director

The key responsibilities of the Managing Director are to:

• oversee the day-to-day operations of the Group and to ensure the smooth and effective running of the Group;
• to be accountable and responsible for the Group’s operations, financial and sustainability performance;
• together with the Head of Departments, to ensure that the business affairs of the Group are carried out in an ethical manner and in compliance with relevant laws and regulations;
• conduit between the Board and the Management in ensuring the success of management functions; and
• implement the policies, strategies and decision adopted by the Board.

Company Secretary

The appointment and removal of the Company Secretary are the matters for the Board. The Company Secretary should be suitably qualified, competent and capable of carrying out the duties required of the position.

The key roles of the Company Secretary are to 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 main responsibilities of the Company Secretary include, but are not limited to the following:-

• Manage all Board and committee meeting logistics, attend and record minutes of all Board and committee meetings and facilitate Board communications;
• Advise the Board on its roles and responsibilities, particularly the additional or changes in obligations arising from the implementation of the new laws and regulations or any amendments thereof;
• Facilitate the orientation of new directors and assist in director training and development;
• Advise the Board on corporate disclosures and compliance with Company and securities regulations and MAIN LR;
• Manage processes pertaining to the annual shareholder meeting;
• Monitor corporate governance developments and assist the Board in applying corporate governance practices to meet the Board’s needs and stakeholders’ expectations;
• Serve as a focal point for stakeholders’ communication and engagement on corporate governance issues; and
• Carry out other functions as deemed appropriate by the Board from time to time.

Board Operations and Procedures

Strategic Functions

• Strategic planning: Approving the Group’s strategy, objectives, associated performance indicators and targets and approving any subsequent material variations.
• Business planning: Approving, adopting and monitoring the business plan including operating budgets, capital budgets, performance indicators and major projects including corporate restructures/reorganisation, major capital expenditure, capital management, acquisitions and divestitures and any significant initiatives or opportunities.
• Funding: Contributing to and approving a strategy for the Group funding, including funding targets, timelines and avenues and appropriately involving itself in liaison and communication with potential sources of funding.
• Change management: Overseeing the Group’s capacity to identify and respond to changes in its economic and operating environments.
• Stakeholder liaison: Appropriately involving itself in liaison and communication with key stakeholders.
• Performance monitoring: Overseeing the conduct and performance of the Group to ensure they are being properly and appropriately managed. To discharge this duty, the Board will give specific and regular attention to:                                          (i) monitor performance against the strategic and business plans;                                                                                           (ii) monitor performance against peer and competitor companies; and                                                                                      (iii) enquire and follow up areas of poor performance and their cause.

Governance and Matters reserved for the Board

• Delegations of authority: Reviewing, approving and, where appropriate, revising the delegations of authority from the Board to the management. These delegations must be clearly conveyed to empower the Managing Director, Executive Directors and key senior management team to run the Group.

• Committees: Overseeing the work of the Board Committees including determining the need for specific Committees, reviewing the need for those Committees on an ongoing basis, receiving reports from, reviewing the work of, and considering the recommendations made by each Committee.

• Information needs: Dictating its information needs to management including the form, timing, content and style of Board papers and ensuring these are fully addressed on an ongoing basis.

• Management succession planning: Ensuring that appropriate plans are in place for the succession of senior management.

• Other matters: Attending to corporate governance matters including the identification and nomination to the members of new Directors to fill Board vacancies and to any other matters identified as reserved to the Board.

Risk and Opportunity Management, Compliance and Internal Controls

• Risk and opportunity management: Defining the Group’s risk appetite, approving and overseeing the operation of the Group’s Enterprise Risk Management (“ERM”) framework, assessing its effectiveness, understanding and reviewing the major/significant risks and opportunities facing the group and monitoring their management.
• Internal controls: Overseeing, reviewing and monitoring the operation, adequacy and effectiveness of the Group’s reporting systems and the overall framework of internal controls established by management including operational, accounting and financial reporting controls.
• Operational compliance: Approving, reviewing and monitoring compliance with corporate policies.
• Legal compliance: Overseeing, reviewing and monitoring the operation of the Group’s procedures to ensure compliance with relevant legislation is actively promoted within the Group. Attention shall also be given to privacy and occupational health and safety programs.
• Reputation: Being aware of and, where appropriate, reviewing any litigation, actions, transactions and issues, papers and reports to external/third parties which impact on the Group and which may attract public, government, regulatory or other interest.
• Encourage the reporting of unlawful or unethical behavior: Maintaining a firm stance in encouraging the reporting of unlawful or unethical behavior and ensuring that employees and management are assured of protection where violations are reported in good faith.

Financial

• Financial oversight: Overseeing all aspects of the Group’s financial position including giving specific attention to the quantum, nature and terms of Group’s debt facilities and its ability to meet its debts and other obligations as they fall due.
• Financial reporting: Approving the annual audited financial statements, the quarterly financial statements, and the theme and text of the Company’s and Group’s annual report.
• Audit: Selecting the Group’s external auditors for approval by the members, ratifying the appointment of the internal auditor and approving their respective scopes of work.
• Related party transactions: Reviewing and monitoring all related party transactions to identify whether consideration should be given to seeking stakeholder approval and ensuring compliance with the market regulations.

Human Resource

• Executive appointment and termination: The appointment and dismissal of Managing Director and Executive Directors.
• Executive performance and development: Ensuring an appropriate process is in place to recruit, review the performance of, remunerate, train and develop executives and to provide for management succession.
• Executive compensation: Reviewing and approving the compensation, equity and incentive schemes in place for the executives to ensure they are appropriate and competitive.
• Ethical behavior: Reviewing, approving and monitoring compliance with the Group Code of Ethics, which provides guidance regarding ethical behaviour, including approving all proposed revisions or waivers.

Relationship between Board and Management

Subject to the formal delegations of authority, the Board delegates responsibility for the operation and management of the Group business to the Managing Director and the management team. Management is accountable to the Board and is to fulfil this responsibility through the provision of reports, briefings and presentations on a regular basis throughout the year.

Other executive and top management shall attend Board meetings by standing invitation.

The Board will adopt appropriate structures and procedures to ensure it retains its independence and functions independently of management. This will include the non-executive Directors meeting in the absence of management on a scheduled basis.

Independent Directors may communicate with members of the senior management team at any time.

Investor and Stakeholder Liaison

The Board’s investor and shareholder liaison objective is to ensure that there are effective communications with its shareholders, the financial communities and other stakeholders that fairly and accurately reflect the Group. This is to help the Group to achieve a fair market value for its securities and optimum cost of capital and at the same time to facilitate investors and potential investors to make informed investment decisions.

The Board’s investor and stakeholders’ relations initiatives are designed and driven by the following principles:

• The Board will always report its financial results and material development to Bursa Securities, its shareholders and other stakeholders in an open, timely and comprehensive manner;
• The Board will communicate only through its designated spokespersons;
• The Board will leverage its website as an additional communications channel;
• The Board will proactively address reports and rumours, so as to avoid unnecessary speculation in its securities;
• The Board will give reasonable access to analysts and the media to help them have informed opinions of the Group, but will not seek to influence those opinions or to give information that is not available to the general public; and
• The Board will meet with its shareholders in the Company’s Annual General Meeting and Extraordinary General Meeting (if any) to inform and obtain feedback from shareholders.

Board Committees

The Board may from time to time establish appropriate Committees to assist it in the discharge of its responsibilities. However, the Board will not delegate any of its decision-making authority to those Committees. The Board has established the following Committees:

• Audit Committee

The Audit Committee is to assist the Board in fulfilling its oversight responsibilities relating to accounting and reporting practices as well as risk management policies and strategies and sustainability initiatives of the Group.

• Nomination Committee

The Nomination Committee is to assist the Board in fulfilling its responsibility in nominating new nominees to the Board and Board Committees and ensure their compositions meet the needs of the Company, and to lead the succession planning of the Board members and assess the performance of the Board and individual Directors of the Company on an on-going basis.

• Remuneration Committee

The Remuneration Committee is to assist the Board in fulfilling its responsibility on matters relating to the Group’s compensation, bonuses, incentives and benefits.

Each formally constituted Committee will have their written Terms of Reference, approved by the Board. Formal minutes of each Committee meeting will be prepared and circulated to each of the Directors within the time frame set out in the relevant Committee’s terms of reference, together with a clear list of recommendations and/or other matters and issues for the consideration of the full Board at the next Board meeting.

Where a Committee meeting is necessarily held a short time in advance of a Board meeting, for example where the Audit Committee completes its review of the financial statements only shortly in advance of the Board meeting to approve those accounts, the Board may be verbally briefed by the chairperson of the Committee. However, this must be followed by formal written minutes within the prescribed timeframe.

Meetings

Board Meeting

Board meetings are held at least four (4) times annually. The agenda for each meeting is dictated by the needs of the Board and the matters set out in the annual agenda for attention at a particular meeting.

Additional Board meetings can be convened by the Company Secretary at the request of any Director at any time by giving all Directors at least seven (7) days’ notice in writing. A meeting may, with the consent of all Directors, be convened with shorter notice.

Personal attendance of Board members at meetings is preferred. But, the Board and Board Committees may hold meetings at two (2) or more venues using any technology (for example: teleconferencing) that gives all members of the Board or the relevant Board Committee a reasonable opportunity to participate in the meeting.

In addition to the above, subject to relevant laws and guidelines, the following should be observed by Board:

• To meet on a quarterly basis, but in any event, no less than once in every three (3) months, or whenever deemed necessary;
• All directors must attend at least 50% of the Board meetings held in each financial year or such other percentage as may be prescribed by the MAIN LR;
• the quorum of the meetings shall be met pursuant to the Constitution of the Company;
• the participation of the Director can be facilitated by means of video or teleconferencing;
• the relevant management personnel may be invited to attend the Board meetings;
• The Company Secretary shall be the Secretary of the Board Meeting and minutes of meetings shall be taken and documented; and
• Information and meeting materials should be supplied to the Directors at least five (5) business days prior to the meeting in order for them to discharge their duties.

In lieu of meeting, the Board is allowed to carry out resolutions by way of circulation.

General Meeting

General meetings are important platforms for Directors and senior management to engage shareholders to facilitate greater understanding of the Company’s business, governance and performance. It is the role of the Board to ensure that the AGM and Extraordinary General Meeting of the Company are conducted in an efficient manner and serves as a crucial mechanism in shareholders’ communications.

The Board shall focus its efforts on the following best practices to enhance the effectiveness of the general meeting:-

• Notice of AGM should be given at least 28 days prior to the AGM.
• All Directors would commit to attend the general meetings of the Company in order to provide an opportunity for the shareholders to actively engage with each Director.
• The Chairman of the Board and Board Committees should provide meaningful response to questions addressed to them.
• All voting on resolutions in all general meeting shall be conducted via electronic poll voting.

Access to Information and Resources

The Board shall:

• have complete, adequate and timely information prior to Board meetings and on an ongoing basis;
• have the resources required to perform its duties;
• have full and unrestricted access to any information pertaining to the Group; and
• be able to obtain independent professional or other advice at the cost of the Group.

Continued Education Programme and Training

Directors are expected to undertake continuing professional education to enable them to discharge their duties effectively. While management, Company Secretary, Internal and External Auditors will brief the Board on changes in the legislative, regulatory or industry framework which impact the Group, this is not a substitute for the Directors’ efforts to seek continuous knowledge of the changes in the market regulations.

Based on the result of appraisal, the Nomination Committee would assist the Board to undertake an assessment of the training needs of each director.

Remuneration

The Board will consider for adoption a remuneration policy established by the Remuneration Committee designed to enhance corporate and individual performance. The level of remuneration will be designed to attract and maintain talented and motivated Directors and employees. Executive Directors are remunerated based on the Group’s performance whilst the remuneration of the non-executive Directors is determined in accordance with their experience and the level of responsibilities assumed.

The maximum amount of Directors’ fees and benefit to be paid to non-executive Directors will be recommended by the Board and subject to ordinary resolution of the shareholders.

Performance Evaluation

The Board reviews and evaluates individual directors’ performance, its own performance and the performance of its Committees at least annually based on the report of the Nomination Committee.

Other Matters

Indemnity and Insurance

The Board is responsible to consider appropriate insurance policy to mitigate liabilities of Directors and management holding office in the Group.

Publication of the Board Charter

This Charter will be available to all Directors. A copy of this Charter shall be published on the Company’s website.

Review of the Board Charter

The Board will review this Charter and make any necessary or desirable amendments to ensure they remain consistent with the Board’s objectives, current regulation requirements and governance best practice. Changes of the provisions in the Charter shall be adopted by the Board with a formal resolution.

Disclosure and Conflict of interest

Directors are required to take all reasonable steps to avoid actual, potential or perceived conflict of interests with the Group’s interest.

A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company or any of its subsidiaries shall declare the Director’s interest in accordance with the Act.

Should there be actual, potential or perceived conflict of interest between a Company and a director, or a person connected with Director such as a spouse, other family member, or a related company, the interested Director shall make full disclosure in bona fide and act honestly in the best interest of the Group and shall not participate in deliberations and shall abstain himself from casting his votes in any matter arising there from.