SOLUTION GROUP BERHAD (“SOLUTN”)
The Board Charter (“Charter”) is a charter of the Board of Directors (“Board”) of Solution Engineering Holdings Berhad (“SEHB” or “the Company”)
The Board is accountable to SEHB Members for the corporate governance and performance of the SEHB Group and is also committed to achieving the highest standards of business integrity, ethics and professionalism across the SEHB Group’s activities.
2.0 PURPOSE OF THE BOARD CHARTER
The Charter sets out the role, responsibilities, structure and processes of the Board of SEHB.
This Charter further defines specific responsibilities of the Board, in order to enhance coordination and communication between the Senior Management and Board and more specifically, to clarify the accountability of both the Board and Management for the benefit of the Company and its shareholders.
In addition, it will assist the Board in the assessment of its own performance and of its individual Directors.
3. 0 COMPOSITION OF THE BOARD
3.1 Size and Composition
The Board consists of qualified individuals with diverse experience, background and perspective to enable them to discharge their duties and responsibilities effectively. The composition and size of the Board is such that it facilitates the decision making of the Company and its size shall be in accordance to its constitution.
As prescribed by the Listing Requirements, at any one time, at least two (2) directors or one-third (1/3), whichever is higher, of the Board members must be Independent Directors. However, the Board must comprise a majority of Independent Directors where the Chairman of the Board is not an Independent Director to ensure balance of power and authority on the Board.
The presence of the independent directors is to ensure the objectivity in decision-making of the Board is achieved and that no single party can dominate such decision-making in the Company.
The Independent Directors provide independent judgment, experience and objectivity without being subordinated to operational considerations. They help to ensure that the interests of all shareholders are indeed taken into account by the Board and that relevant issues are subjected to objective and impartial consideration by the Board.
The tenure of an Independent Director shall not exceed a cumulative term of 9 years. However, 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. In the event the Director is to remain as Independent Director, the Board shall first justify and obtain shareholders approval.
The Board shall appoint a Senior Independent Director who will also attend to any query or concern raised by shareholders.
On boardroom diversity, the Board will review the appropriate skills, experience and knowledge required of the Board members, in the context of the needs of the Group. The Board will review its composition and size from time to time to ensure its appropriateness.
The Board collectively, and each Director individually, has the rights to seek independent professional advice at the Company's expense, subject to the approval of the Chairman or in the Chairman's absence, the Board.
3.2 Appointments and Re-election
The Nomination Committee and Remuneration Committee shall identify candidates with appropriate skills, experience, knowledge and expertise in order to discharge its mandate effectively and to maintain the necessary mix of expertise to the Board for approval.
All Directors are subject to retirement by rotation at least once in every three (3) years and is eligible for re-election.
The directorships held by any Board member at any time shall not exceed five (5) in listed companies.
3.3 Independence of Director
An Independent Director is independent of management and free of any business or other relationship that could materially interfere with the exercise of unfettered and independent judgment.
The Board undertakes to assess the independent of its Independent Directors upon appointment, annually and when any new interest or relationship develops.
4.0 BOARD PERFORMANCE
4.1 Roles of the Board
The Board oversees the business and affairs of the Company and will assume, among other things, the following duties and responsibilities;
• Reviewing and approving the overall strategic plans and directions of the Company and Group
• Overseeing and evaluating the conduct and performance of the Company and Group
• Identifying principal risks and ensuring implementation of a proper risk management system
• Establishing a succession plan
• Overseeing the development and implementation of a shareholder communication policy for the Company, and
• Reviewing the adequacy and the integrity of the management information and internal controls system of the Company
4.2 Policy and Strategies
The following matters shall be reserved to the Board for determination and/or approval (save to the extent that the Board resolves that determination and/or approval of any such matter shall be delegated to the Committees of the Board or Management):
• Corporate plans and programmes
• Annual budgets, including major capital commitments
• New ventures
• Material acquisitions and disposals of undertakings and properties
• Changes to the management and control structure within the Company and its subsidiaries, including key policies
4.3 Powers delegated to Management
The Board shall delegate to the Group Managing Director (“GMD”), the authority and power to manage the Company and its businesses within levels of authority specified by the Board from time to time. The GMD may delegate aspects of his or her authority and power but remains accountable to the Board for the Company’s performance and is required to report regularly to the Board on the progress being made by the Company’s business units.
4.4 Roles of Chairman and Group Managing Director
The Board will ensure that its Chairman is a non-executive member of the Board. The roles of the Chairman and GMD are distinct and separated to ensure a balance of power and authority.
The Chairman is responsible for the overall leadership and efficient functioning of the Board. The key roles of the Chairman, among others, are as follows:
• Ensure the Board functions effectively, cohesively and independently of Management
• Providing governance in matters requiring corporate justice and integrity
• Leading the Board, including presiding over Board meetings and Company meetings and directing Board discussions to effectively use the time available to address the critical issues facing the Company
• Promoting constructive and respectful relationship between board members and between board members and management
• Ensure that there are effective communications between the Company and/or Group and its shareholders and relevant stakeholders
The GMD is responsible to the Board for the day-to-day management of the Company. The Board gives direction and exercises judgment in setting the Company’s objectives and overseeing their implementation. The key roles of the GMD, among others, are as follows:
• Developing the strategic direction of the Group
• Ensure that the Company and/or Group’s business is properly and efficiently managed by ensuring that the executive team implements the policies and strategies adopted by the Board and its Committees
• Ensure that the objectives and standards of performance are understood by the Management and employees
• Ensure that the operational planning and control system are in place
• Monitoring performance results against plan
• Taking remedial actions, where necessary
4.5 Board Committees
The Board may from time to time establish committees as is considered appropriate to assist in carrying out its duties and responsibilities. The Board delegates certain functions to the following committees to assist in the execution of its responsibilities:
• Audit Committee
• Nomination and Remuneration Committee (“NRC”)
• Employees’ Share Option Committee
The committees shall operate under clearly defined terms of reference. The committees are authorized by the Board to deal with and to deliberate on matters delegated to them within their terms of reference. The Chairman of the respective committees will report to the Board on the outcome of the committee meetings and the minutes will be included in the Board’s Papers for Board’s notification.
4.6 Board Meetings
The Board shall schedule at least (4) quarterly meetings annually. However, Special Meetings may be convened as required.
The Notice of Board Meeting, full agenda and the supporting Board Papers should be given in advance of each Board Meetings and Directors are expected to review in advance any such materials in order to facilitate meaningful deliberations during each meeting.
4.7 Directors’ Remuneration
The Company shall provide a fair and reasonable, competitive, remuneration for its executive directors to ensure that the Company attracts and retains high caliber executive directors who have the skills, experience and knowledge to increase entity value to the benefit of all shareholders.
The remuneration policy for executive directors is based on the achievements and contribution of each member measured against their respective Key Performance Indicators. The Board shall determine the remuneration of executive directors taking into consideration the recommendations of the NRC.
The non-executive Directors will receive a fixed base fee, not by a commission or on percentage of profits/turnover, as consideration for their Board duties. The aggregate amount of directors' fees to be paid to non-executive directors is subject to the approval of the shareholders at a General Meeting.
Remuneration for non-executive directors is not linked to individual performance.
4.8 Directors’ Training and Continuing Education Programme
In addition to the mandatory Accreditation Programme as required by the Bursa Malaysia Securities Berhad, the Directors shall continue to update their knowledge and enhance their skills through appropriate continuing education programmes. This will enable Directors to effectively discharge duties and sustain active participation in the Board deliberations.
The Board will assess the training needs of the Directors from time to time and will ensure Directors have access to continuing education programme.
4.9 Internal Controls and Risk Management
The Board oversees, reviews and monitors the operation, adequacy and effectiveness of Group's system of internal controls.
4.10 Financial Reporting
The Company aims to present a clear and balanced assessment of the Company's financial position and prospects for its financial statements and quarterly announcements to the shareholders, including other price sensitive public reports and reports submitted to regulators.
The Board will ensure that the financial statements are prepared in accordance with the Companies Act and the applicable approved accounting standards set out by the Malaysian Accounting Standards Board so as to present a true and fair view of the state of affairs of the Group.
5.0 COMPANY SECRETARY
The Board appoints the Company Secretary who plays an important advisory role and ensures that the Company Secretary fulfils its function for which he/she has been appointed.
The Company Secretary is a central source of information and advice to the Board and its Committees on issues relating to compliance with laws, rules, procedures and regulations affecting the Company and Group.
The Company Secretary shall be of a senior position with adequate authority and shall report directly to the Board. The appointment and removal of the Company Secretary will be subjected to the approval of the Board.
6.0 CONFIDENTIALITY AND DISCLOSURE OF INTENT
The Directors are required to act in the best interest of the Company. The Directors also have a duty of confidentiality in relation to the Company’s confidential information.
A Director should disclose to the Board:
• Any material personal interest they have in matters which relates to the affairs of the Company; and
• Any other interest (direct or indirect) which the Director believes is appropriate to disclose in order to avoid any conflict of interest or the perception of a conflict of interest.
The disclosure should be made as soon as possible after the Director becomes aware of their interest. Details of the disclosure must be recorded in the minutes of the meeting at which the disclosure is made or the meeting held following the disclosure.
7.0 INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION
The Company is committed to ensure that shareholders are well-informed of all major developments affecting affairs of the Company. To achieve this, the Company has implemented among others, the following:
• Timely release of announcements and disclosures to Bursa Malaysia Securities Berhad, which include quarterly financial results, material contracts and any other material information that may affect the investor’s decision-making
• Conducts regular dialogues with financial analyst as a means of effective communication that enables the Board and Management to convey information relating to the Company’s performance, corporate strategy and other matters affecting shareholders’ interests
• Press conferences which is normally held after the Annual General Meeting/Extraordinary General Meeting to provide media an opportunity to receive update from the Board on the proceedings at the meetings and to address any queries from the media
• Encourage full participation of shareholders at all Annual General Meetings to ensure a high level of accountability and discussion of the Company's strategy and goals. The Company will also invite the external auditor to attend the Annual General Meeting and be available to answer shareholders' questions about the conduct of the audit and the preparation and content of the auditor's report
• Shareholders can gain access to information about the Company including summary of the Group’s investor relation activities and media releases through the company website
8.0 CODE OF ETHICS AND CONDUCT
The Directors are expected to conduct themselves with the highest ethical standards. All Directors and employees are expected to behave ethically and professionally at all times and thereby protect and promote the reputation and performance of the Company.
The Group communicates the Code to all Directors and employees upon their appointment/employment and is deemed to be part of the Terms and Conditions of Service.
9.0 REVIEW OF THE BOARD CHARTER
The Board will review this charter from time to time and make necessary amendments to ensure that they remain consistent with the Board’s objective, current laws and practices.
This Board Charter was reviewed and approved on 30 March 2017.