The Board of Directors (“Board”) of Only World Group Holdings Berhad (“OWG” or the “Company”) recognizes that good corporate governance practices and culture are the keys to the Only World Group Holdings Berhad’s success, sustainability and survival in the ever changing social, economic and political eco-systems in the business environment locally and globally. The Board is, therefore, wholly committed to applying the principles necessary to ensure good corporate governance is practiced throughout OWG in all its business dealings in respect of its shareholders and other stakeholders.
This Charter sets out the key corporate governance principles adopted by the Board of the Company.
The Board Charter of ONLY WORLD GROUP HOLDINGS BERHAD sets out the composition, roles and responsibilities of the Board.
3. BOARD STRUCTURE
3.1 Composition and Board Balance
– The Board consists of qualified individuals with diverse set of skills, experiences and knowledge that are necessary and relevant to the Group’s business operations. The composition and size of the Board is such that it facilities the decision making of the Company.
– There is a clear segregation of responsibilities between the Chairman and the Chief Executive Officer to ensure a balance of power and authority.
– The number of directors shall be not less than two (2) nor more than fifteen (15) as set out in the Company’s Articles of Association.
– Profiles of Board members are included in the Annual Report of the Company.
– In accordance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Company must ensure that at least two (2) directors or 1/3 of the board of directors of the Company, whichever is the higher, are independent directors. If the number of directors of the Company is not three (3) or a multiple of three (3), then the number nearest 1/3 must be used. In the event of any vacancy in the board of directors, resulting in non-compliance, the Company must fill the vacancy within three (3) months.
– An Independent Director is one who is independent from management, free from any relationship or any transaction, which may interfere with their independent judgment or the ability to act in the best interest of the Company and are willing to express his/her opinion at the Board Meeting free of concern about their position or position of any third party.
– New Directors are expected to have such expertise so as to qualify them to make a positive contribution to the Board performance of its duties and to give sufficient time and attention to the affairs of the Company.
– The appointment of a new Director is a matter for consideration and decision by the full Board upon appropriate recommendation from the Nominating Committee.
– In the case of candidates for the position of Independent Non-Executive Directors, the Nomination Committee should also evaluate the candidates’ ability to discharge such responsibilities/functions as expected from Independent Non-Executive Directors.
– The Company Secretary has the responsibility of ensuring that relevant procedures relating to the appointments of new Directors are properly executed.
– All newly appointed directors shall retire and shall be eligible to be re-elected by the shareholders at the Company’s annual general meeting.
– Pursuant to the Company’s Articles of Association, an election of directors takes place subsequent to their appointment each year where 1/3 of the directors or if their number is not 3 or a multiple of 3, then the number nearest to 1/3, shall retire by rotation from office and shall be eligible for re-election at each annual general meeting and that each director shall retire from office at least once in every 3 years and shall be eligible for re-election.
– The directors to retire in each year shall be those who have been longest in office since their last election, but as between persons who became directors on the same day those to retire (unless they otherwise agree among themselves) be determined by lot.
3.4 Tenure of Independent Director
– The tenure of the independent directors shall 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 directors’ re-designation as a non-independent director. In the event the Board intends to retain the Independent Director as an Independent Director after serving a cumulative term of nine (9) years, shareholders’ approval will be sought.
– The Board (Nomination Committee) assesses the independence of the Directors annually.
3.5 Independence Criteria
In determining/assessing the “independence” of its Directors, the Company also adopts the independence criteria of the Main Market Listing Requirements which states that an Independent Director:
– is not an executive Director of the Company or any related corporation (“Said Corporation”);
– has not been within 2 years and is not an officer (except as a non-executive director) of the Said Corporation;
– is not a major shareholder of the Said Corporation;
– is not a family member of any executive director, officer or major shareholder of the Said Corporation;
– is not acting as a nominee or representative of any executive director or major shareholder;
– has not been engaged as a professional adviser or is not presently a partner, director (except as an independent director) or a major shareholder, as the case may be, of a firm or corporation (“Entity”) which provides professional services to the Said Corporation (provided that the consideration for the professional advisory services in aggregate is not more than 5% of the gross revenue on a consolidated basis (where applicable) of the said Director or Entity or RM1 million, whichever is higher – Practice Note 13 of the Main Market Listing Requirements); and
– has not engaged in any transactions or is not presently a partner, Director of major shareholder as the case may be, of the Entity (other than subsidiaries of the Company) which has been engaged in any transactions (provided that the consideration for the transaction in aggregate is not more than 5% of the gross revenue on a consolidated basis (where applicable) of the Said Director or Entity or RM1 million, whichever is higher – Practice Note 13 of the Main Market Listing Requirements)
3.6 Performance Assessment
– The Board reviews and evaluates its own performance and the performance of its Committees on an annual basis against both measurable and qualitative indicators.
4. COMPANY SECRETARY
– The Board appoints the Company Secretary, who plays an important advisory role, and ensure that the Company Secretary fulfils the functions for which he/she has been appointed.
– The Company Secretary provides guidance to the Board on matters pertaining to the Board’s responsibilities in order to ensure that they are effectively discharged within relevant legal and regulatory requirements.
– The appointment and removal of the Company Secretary is a matter for the Board as a whole. The Board recognizes the fact that the Company Secretary should be suitably qualified and capable of carrying out the duties required.
– The Company Secretary must keep abreast of, and inform, the Board of current governance practices.
5. BOARD COMMITTEES
– The Board has delegated certain functions to certain Committees with each operating within its clearly defined terms of reference. The Chairman of the various Committees will report to the Board on the outcome of the Committee meetings.
– The Board has established the following Committees to assist the Board in the execution of its duties:
(i) Audit Committee
(ii) Remuneration Committee
(iii) Nominating Committee
– The roles and responsibilities of Audit, Remuneration and Nominating Committees are set out in the terms and reference of each Committee.
– The Chairman of the relevant Board Committees will report to the Board on the key issues deliberated by the Board Committees at the Board meetings.
6. DIRECTORS’ REMUNERATION
– Directors’ remuneration is generally determined at levels which would continue to attract and retain Directors of such calibre to provide the necessary skills and experience as required and commensurate with the responsibilities for the effective management and operations of the Group.
– The level of remuneration of the Chief Executive Officer and Executive Directors are determined by the Remuneration Committee after giving due consideration to the compensations levels for comparable positions among other similar Malaysia public listed companies and are so as to link short and long-term rewards to corporate and individual performance.
– The level for Non-Executive Directors shall reflect the contribution and level of responsibilities undertaken by the particular Non-Executive Director.
– The fees of the individual Board members of the Company are disclosed in the Annual Report.
7. ROLES AND RESPONSIBILITIES OF THE BOARD
– The Directors are responsible for managing the business of the Company and may exercise all the powers of the Company which are required, by the provisions of the Companies Act, 1965, Articles of Association and Listing Requirements of Bursa Malaysia Securities Berhad as well as other applicable laws and regulations.
– In discharging his/her duties, each Director must:
(i) exercise care and diligence;
(ii) act in good faith in the best interests of the Company;
(iii) not improperly use his/her position or misuse
information of the Company; and
(iv) commit the time necessary to discharge effectively
his/her role as a Director.
7.1 Role of Board
The functions of the Board are to:
– Establish the organization’s values, vision, mission and strategies.
– Provide guidance to Senior Management in developing corporate strategy.
– Reviewing and set the Group’s strategic plan and direction.
– Review and agree the business (action) plans and annual budget proposed by the Executive management team.
– Monitor the achievement of the strategic and business plans and annual budget.
– Promote better investors relations and shareholder communications.
– Ensure that the Group’s core values, vision and mission and shareholders’ interest are met.
– Establish such committees, policies and procedures as appropriate, compliance obligation and functions are effectively discharged.
– Arrange for directors to attend courses, seminars and participate in development programs as the Board judges appropriate.
– Ensure that all significant systems and procedures are in place for the organization to run effectively, efficiently, and meet all legal and contractual requirements.
– Ensure that all significant risks are adequately considered and accounted for by the Executive management team.
– Ensure that organization has appropriate corporate governance in place including standards of ethical behaviour and promoting a culture of corporate responsibility.
– Approving specific items of capital expenditure and investments, acquisitions and dis-investments and any significant initiatives or opportunities that arise outside the annual planning and budgeting process.
– Approving and monitoring major projects including corporate restructuring/re-organization.
– Overseeing the conduct and performance of the Company and subsidiaries to ensure that they are being properly and appropriately managed.
– Appointing directors to the Board.
– Approving the quarterly, full-year financial statements and annual report.
– Recommending the interim and final dividends to shareholders, where applicable.
– Reviewing and monitoring all related party transactions to identify whether consideration should be given to seeking shareholders’ approval.
7.2 Role of Chairman, Chief Executive Officer and Independent Non-Executive Director
– The roles of the Chairman, Chief Executive Officer and Independent Non-Executive Director are strictly separated.
– The Chairman is responsible for:
(i) leading the Board in setting the values and standard of the Company.
(ii) overseeing the effective discharge of the Board’s supervisory role.
(iii) facilitating the effective contribution of all directors.
(iv) conducting the Board’s function and meetings.
(v) briefing all the directors in relation to issues arising at meetings.
(vi) ensuring effective communication with shareholders and relevant stakeholders.
(vii) scheduling regular and effective evaluations of the Board’s performance.
(viii) ensuring the provision of accurate, timely and clear information to Directors.
(ix) promoting constructive and respectful relations between Board members and between the Board and the Management.
– The Chief Executive Officer is responsible for:
(i) the implementation of strategic business direction, plans and policies of the Group.
(ii) the efficient and effective operation of the Group.
(iii) the running of day-to-day management of the Group with all powers, discretions and delegations authorised, from time to time, by the Board.
(iv) to assess business opportunities which are potential benefit to the Group.
(v) bringing material matters to the attention of the Board in an accurate and timely manner.
– The Independent Non-Executive Director:
(i) Ensures that all Independent Non-Executive Directors have an opportunity to provide input on the agenda, and advise the Chairman on the quality, quantity and timeliness of information submitted by Management that is necessary or appropriate for the Independent Non-Executive Directors to perform their duties effectively.
(ii) whom concerns relating to Company by shareholders may be addressed.
7.3 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, 1965 and relevant common law duties.
– In addition, all directors must comply with the Code of Ethic and Conduct developed and approved by the Board from time to time.
7.4 Declaration of Interests
– Every director shall declare in writing to the Secretary of the Board of Directors the nature and extent of any relationship, arrangement, contract or agreement which creates a duty to or interest in any other entity or individual which may result in a conflict of interest, real or perceived.
– A director who has an interest, direct and/or indirect, in any matter, business, or transaction (“Matter”) before the Board of Directors in respect of which the Board will be rendering a decision shall provide written disclosure of the nature and extent of his or her interest to the Secretary of the Board.
– A director who is interested in a Matter shall not be present at or participate in any discussion or vote on the decision regarding that Matter. The disclosure of the director shall be recorded in, or annexed to, the minutes of the meeting at which such disclosure was made.
7.5 Financial Reporting
The Board ensures that the financial statements are prepared to give a true and fair view of the current financial position of the Group and of the Company in accordance with the approved accounting standards.
8. BOARD PROCESSES
8.1 Board Meetings
Meetings will be conducted at least four (4) times a year, with additional meetings convened as and when necessary.
A quorum for a meeting of the Board is two (2) directors.
Actions on all matters arising from any meeting are reported at the following meeting.
– The Board may invite external parties such as auditors (both internal and/or external auditors), solicitors or consultants as and when the need arises. Such invited parties may attend part or all of the Board Meeting at the discretion of the Board.
8.2 Minutes and Resolutions
– Proceedings of all meetings are minuted and signed by the Chairman of the meeting. Minutes of all Board meetings are circulated to the directors and approved by the Board at the subsequent meeting. Directors’ Circular Resolutions signed by the directors are as valid and effectual as if the resolutions had been passed at the meeting of the directors. The resolutions are to be recorded in the Company’s minute book kept by the Company Secretary.
8.3 Notices and Board Papers
– The notice of Board meetings shall be issued at least seven (7) days prior to the meeting.
– The Board paper and agenda items shall be circulated at least seven (7) days prior to the meeting.
– Minutes prepared following the Board meeting will be circulated in draft form. The draft minutes will be re-circulated with the Board papers in readiness for signing at the following meeting. Issues discussed in arriving at each Board’s decision shall be recorded.
8.4 Access to Information
– The Directors, collectively or individually may seek the advice and services of the Company Secretary and Senior Management staff in the Group and may obtain independent professional advice at the Company’s expense in the furtherance of their duties so as to ensure that the Directors able to make independent and informed decision.
8.5 Matters Reserved for OWG Board
Below is a list of matters reserved for OWG and its Board Committees.
The list is not exhaustive and when in doubt regarding a matter/issue, it shall be referred to the Chief Executive Officer.
STRATEGY AND BUSINESS PLANING
– Approval of business strategy and group operational plan and annual budget.
– Approval of investment or divestment in a company/business/property/undertaking.
– Approval of investment or divestment of a capital project which represents a significant diversification from the existing business activities.
– Approval of changes in major activities of the Company or Group.
FINANCE AND CONTROLS
– Quarterly unaudited results, audited financial statements or any audited financial statements for special purpose.
– Interim dividend and recommendation of final dividend .
– Approval of any significant change in accounting policies and practices of the Group.
– Remuneration of auditors and recommendations for appointment, re-appointment or removal of auditors.
– Reports and findings of the external auditors.
– Proposed increase/decrease in authorised and paid-up capital including share buy back capitalization of reserves and corporate restructuring.
– Inter-company shareholder advances and loans.
– Corporate/financial guarantee and letter of comfort/support.
– Debt, loan agreements and working capital facilities.
– Financial Instruments and derivatives.
– Related party sale of assets between OWG and its subsidiaries.
– Write-off of intercompany transactions.
– Schedule of Recurrent Related Party Transactions.
– Succession plan.
– Company-wide Human Resource policy on terms and conditions of employment and benefits.
– Annual salary increment budget and performance bonus budget.
– Misconduct and disciplinary matters.
– Long term employment incentives.
COMPLIANCE AND SUPPORT
– The granting of powers of attorney by the Company .
– The entering into of any indemnities or guarantees.
– Changes to Memorandum and Articles of Association.
– Any others matters requiring the convening of a general meeting of shareholders or any class of shareholders.
– Any other matters as may be required by laws or the governing authorities.
9. DIRECTORS’ TRAINING
– The Directors are regularly updated by the Company Secretary and/or Management on new statutory, corporate and regulatory developments relating to Directors’ duties and responsibilities or the discharge of their duties as Directors of the Company.
– Directors are expected to undertake any necessary continuing professional education to enable them to discharge their duties.
10. The Board’s Relationship with Shareholders and Investors
– The Board will maintain an effective communications policy that enables both the Board and Management to communicate effectively with shareholders, investors and the general public.
– The Board will ensure that the General Meetings of the Company are conducted in an efficient manner and serve as a principal forum for dialogue with the shareholders.
11. REVIEW OF BOARD CHARTER
– The Board will review this Charter from time to time to ensure it remains consistent with its objectives and responsibilities and existing regulatory requirements.