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Board Charter

1.0

PURPOSE

This Board Charter sets out the Board’s strategic intent and outlines the Board’s roles, responsibilities, processes and functions of the Board of Directors (“the Board”) of Petrol One Resources Berhad (“PORB” or “the Company”), and serves as a source reference and primary induction literature, providing insights to prospective board members and senior management of the PORB Group. This Charter, together with the Company’s Articles and Memorandum of Association, provide the authority and practices for governance of the Company.

2.0

THE BOARD

2.1

The Board shall use its best efforts to ensure that its composition and size meets the requirements of the Company for effective decision making with the benefit of diverse skills, knowledge, experiences and expertise. Nevertheless, the Board’s composition and size shall always be in full compliance with the Articles of Association of the Company and all other regulatory requirements that are in force. The Board shall carry out periodical review to consider the appropriateness of its composition and size.

2.2

The Board oversees the general business and affairs of PORB Group and will assume, amongst others, the following duties and responsibilities:-

  • Establishing strategic intent, strategies and targets for the Company and Group;
  • overseeing and evaluating the conduct and performance of the
  • identifying principal risks and ensuring implementation of appropriate internal controls and mitigation measures;
  • establishing leadership succession plans and overseeing the development of the Group’s human capital;
  • overseeing the development and implementation of an investor relations programme or shareholder communications policy for the Company;
  • reviewing the adequacy and integrity of the management information and systems of internal controls of the Group; and
  • formulating strategies that promote sustainability and give due consideration on the environment, social and governance (“ESG”) aspects of business in the Group and consider appropriate ESG reports and information.
  • The Board shall provide central leadership to the Company.

2.3

The following matters shall be reserved to the Board for determination and/or approval:

  • Level of authority;
  • Corporate strategies and plans;
  • Annual budgets, including major capital commitments;
  • New ventures or diversifications;
  • Material acquisitions and disposals of undertakings and properties;
  • Changes to the management and control structure within the Company and its subsidiaries, including key policies.

2.4

Daily operational matters and matters not expressly reserved to the Board may be delegated to management. The Executive Director/Chief Executive Officer, who leads the management team, shall have the authority and power to manage the Company and its businesses within the level of authority determined by the Board from time to time, and shall constantly report the Company’s performance to the Board for timely evaluation.

2.5

All the Directors have an equal responsibility for the Group’s risk management policy framework and corporate & regulatory accountability.

2.6

The Directors shall devote sufficient time to carry out their responsibilities. Acceptance of new directorship by any director shall be made known to the Chairman of the Board by indicating the quantum of time that will be spent on his new appointment. The Chairman shall also notify the Board if he has any new directorship or significant commitments outside the Company.

2.7

The Executive Directors shall possess intimate knowledge for the management of the Group’s businesses and the Non-Executive Directors who are independent of management and have no relationships with the Company that could materially interfere with the exercise of their independent judgement, shall provide a broader and independent view in the Board’s deliberations to ensure that objectivity in decision-making of the Board is achieved and no single director can dominate such decisionmaking in the Company.

2.8

The independence of each independent non-executive director shall be reviewed from time to time and individual directors do not participate in assessing their own independence.

2.9

The tenure of an Independent Director shall not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, the Independent Director may continue to serve the Board subject to the Director being re-designated as a Non-independent Director.

However, the Board shall provide justifications and seek shareholders’ approval in the event it proposes to retain an independent director who has served the Board in that capacity for more than nine (9) years and the particular director does not participate in forming opinion on his own retention proposal. If the Board continues to retain the independent director after 12 years, the Board shall seek annual shareholders’ approval through a two-tier voting process.

2.10

All conflicts or potential conflicts of interest shall be disclosed upfront to the Board and the respective director concerned shall refrain from participating in voting and deliberating in such matters and in matters that could, or could reasonably be perceived to materially interfere with the director's ability to act in the best interests of the Company.

2.11

The Board shall appoint amongst its members a Senior Independent Non-Executive Director, to whom concerns from other directors, public or investors may be conveyed.

2.12

The Directors shall have access to appropriate continuing education programmes to enhance their skills and knowledge, and to keep abreast with new developments in the market place.

2.13

The Board shall appoint a suitably qualified and competent company secretary who can support the Board in carrying out its duties and responsibilities. The Directors shall have unrestricted access to the professional advice and services of the Company Secretary on issues relating to governance practices and compliance with laws and regulations affecting the Company and the Group.

3.0

THE CHAIRMAN OF THE BOARD

The Chairman leads the Board. He shall ensure the Board receive accurate, timely and clear information for decision-making, keeps track of the contribution of individual directors to ensure they are actively participated in board deliberations and decision-making process, and maintain a relationship of trust with and between the Directors.

4.0

THE EXECUTIVE DIRECTOR (“ED”)

The ED is responsible for the efficient and effective day-to-day management of the businesses and overall operations of the Group, implementation of Board approved strategies and policies, monitors performance results against plans and takes remedial action, where necessary.

NON-EXECUTIVE DIRECTORS (“NED”)

The role of the NED is primarily on monitoring executive authority and contributing to the development of strategy.

NED would act as a bridge between the Management and stakeholders in particular the shareholders of the Company. NED would provide the relevant checks and balances, focusing on shareholders’ and other stakeholders’ interests and ensuring that high standards of corporate governance are applied.

INDEPENDEPENT NON-EXECUTIVE DIRECTORS (“INED”)

INED 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. Since an INED 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 INED is especially important in areas involving the interests of Management, the Company and/or the Shareholders, such as executive performance and remuneration, related party transactions and audit.

SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR (“SINED”)

Responsibilities of the SINED include:-

• to serve as a designated contact person for consultation and direct communication with Shareholders and other stakeholders on areas that cannot be resolved through the normal channels of contact with the Company, at the expense of the Company.

• to seek assistance from the ED and/or any senior Management of the Company, if so required, to resolve the issues raised by the Shareholders or other stakeholders to him.

• to seek advice from external professionals on a specific subject matter raised to him by the Shareholders or other stakeholders, at the expense of the Company, if so required.

• to report to the Board on any pertinent issues raised by the Shareholders or other stakeholders that warrants the Board’s attention and/or further action.

• to ensure all INEDs have an opportunity to provide input on the agenda and advise the Chairman on the quality, quantity and timeliness of the information submitted by management that is necessary or appropriate for the INEDs to perform their duties effectively;

5.0

BOARD COMMITTEES

The Board may from time to time establish committees from among its members to assist in discharging its duties and responsibilities. The following committees so established shall only perform the tasks delegated to them by the Board and operate under clearly defined terms of references:

i. Audit Committee (“AC”)

The AC shall assist the Board in reviewing the Group’s matters pertaining to the financial reporting, risk management and internal control, internal and external audit processes, conflict of interests issues and related party transactions (if any), and reports its findings and/or recommendations for the Board’s consideration.

ii. Nomination and Remuneration Committee (“NRC”)

The NRC shall assist the Board in identifying and nominating directors and evaluating both the Board and individual directors including boardroom diversity on an annual basis, considering succession planning to ensure leadership effectiveness and continuity succession plans, discussing the training needs and programmes for the directors, reviewing and proposing fair and reasonable remuneration packages to attract, retain and motivate directors, and reports its observations and/or recommendations for the Board’s consideration.

6.0

BOARD FUNCTIONS

6.1

Board Meeting guidelines

Board meetings shall be convened where necessary, to discuss and consider the Group’s financial performance, operational aspects, business development, risk management, internal control and etc.

The proceedings of the Board shall be governed by the provisions of the Articles of Association of the Company regulating the meetings and proceedings of the Board.

6.2

Financial Reporting

The Board shall take reasonable steps to provide fair and reliable financial statements of the Company to its shareholders and stakeholders to enable them to make informed decisions. In this respect, the Audit Committee assists the Board to oversee the Company’s financial reporting process and the quality of the financial reports to ensure the Company’s interim and annual financial statements comply with applicable financial reporting standards.

6.3

Access of information and independent advice

All Directors shall have unlimited access to the information pertaining to the Company and the Group. Accurate and complete information shall be made available to the Board in a timely manner to enable the Board to discharge its duties effectively.

The Directors, collectively or individually, shall be able to consult advisers and, when considered necessary, to seek independent professional advice on the matters relating to legal, financial, governance or other expert advise at the Company’s expense.

6.4

Monitoring

The Board monitors the performance of the Company via the reports presented at Board and Board Committee meetings and through regular engagements with the management from time to time.

6.5

Directors’ Code of Ethics

The Board observes the Code of Ethics for Company Directors issued by the Companies Commission of Malaysia to uphold the standard of ethical behaviour for its Directors.

6.6

Directors’ Code of Ethics
The Board observes the "Code of Ethics for Company Directors" issued by the Companies Commission of Malaysia to uphold the standard of ethical behaviour for its Directors.

7.2

Directors’ Code of Conduct

All Directors are expected to conduct themselves with the highest professional integrity. Board members are required to observe the Directors’ Code of Conduct in discharging their duties and responsibilities.

Directors’ Code of Conduct
In discharging his duties and responsibilities as a fiduciary, each Director of the Company shall:

In discharging his duties and responsibilities as a fiduciary, each Director of the Company shall:

  • act honestly, in good faith and in the best interest of the Company and the Group;
  • observe high standard of corporate governance;
  • exercise care and diligence;
  • protect and ensure the efficient use of the Company’s information and assets for legitimate business purposes;
  • declare any personal, professional or business interests that may arise and conflict with his responsibility as a Director of the Company;
  • commit the time necessary to discharge effectively his role as a Director;
  • commit to enhance and maintain the reputation of the Company; and
  • strive to uphold the Group’s corporate social responsibilities and practices in the areas of environment, health and safety.

The Directors’ Code of Conduct may be revised and modified by the Board from time to time to be in line with the Board’s objectives and relevant to the laws and regulations in force.

6.7

Risk Management and Internal Control

The Board shall establish policies and framework to prevent oversight and for the management of enterprise risks, and formulate and implement appropriate internal control system for mitigation measures to safeguard shareholders’ investments and the Group’s assets.

The Board shall maintain an internal audit function that reports directly to the AC to provide assurance to the Board that the Group’s internal controls are operating effectively.

The Executive Director/Chief Executive Director and the Chief Financial Officer of the Company shall also provide assurance (verbal or written) to the Board on whether PORB Group’s risk management and internal control system is operating adequately and effectively, in all material aspects, based on the risk management and internal control system of the Group.

6.8

Corporate Disclosure

The Board practices high level of transparency and accountability in its disclosure procedures as guided by the corporate disclosure framework under Bursa Malaysia Securities Berhad Main Market Listing Requirements and the “Corporate Disclosure Guide” issued by Bursa Malaysia Securities Berhad to provide its shareholders and stakeholders with timely and reliable information to facilitate their decision-making processes.

6.9

Investor Relations and Shareholders’ Communications
The Board shall place great importance in ensuring the efficiency and effectiveness in its communication to shareholders and stakeholders on issues relating to the performance, corporate governance and other matters that may affect their interests by providing the shareholders and stakeholders with:

The Board shall place great importance in ensuring the efficiency and effectiveness in its communication to shareholders and stakeholders on issues relating to the performance, corporate governance and other matters that may affect their interests by providing the shareholders and stakeholders with:-

  • various disclosures and announcements to the Bursa Malaysia Securities Berhad, including the quarterly financial results, annual reports and where appropriate, circulars and press releases which may be assessed from the website of Bursa Malaysia Securities Berhad at www.bursamalaysia.com and the Company’s website at http://petrolone.com.my/;
  • • interviews conducted from time to time by local journalists with the management of the Group that may be reported in the local newspapers and information on the Group and its business activities.

The Board shall encourage its shareholders to take part in the Company’s general meeting to exercise their legitimate rights and interests and to put substantive resolutions to vote by poll and make an announcement of the details results showing the number of votes cast for and against each resolution at the meeting. Shareholders shall be informed of their right to demand a poll vote at the commencement of any general meetings. Guidance 12.3 of the Malaysian Code on Corporate Governance 2017 on the adoption of electronic means for poll voting is well noted by the Board.

The Board shall promote open communication with its shareholders in the Company’s general meetings where shareholders are encouraged to participate in the question and answer session in respect of the matters of the Group’s activities, performance, strategies and developments.

7.0

INQUIRIES/COMPLAINTS/GRIEVANCES

7.1

Any inquiries/complaints/grievances may be directed to the Senior Independent Director or any other Board Member of the Company.

7.2

All complaints/grievances shall be treated as confidential and no information or identities shall be divulged or revealed except as necessitated in the proper course of investigation or compelled by a court of law or competent authority.

8.0

REVIEW OF BOARD CHARTER

The Board shall review this Board Charter from time to time and publish it on its corporate website. Necessary amendment(s) shall be made to ensure the Board Charter remains consistent with the Board’s objectives, current law and practices.

This Board Charter was reviewed and updated by the Board on 30 August 2018 and is made available for reference on the Company’s corporate website, http://www.petrolone.com.my/.