• Board Charter

1. Introduction

The Board of Directors (“Board”) of P.I.E. Industrial Berhad (“PIE” or “the Company”) is committed to ensure that good corporate governance is being practised by the Group in order to safeguard stakeholders’ interests as well as enhancing shareholders’ value.


2. Purpose of Charter

The Board Charter sets out a list of specific functions that are reserved for the Board. The Board Charter addresses, which include amongst others, the Board obligations and liabilities, Directors’ Code of Ethics, role of the Board, Chairman and Managing Director, appointment of new directors, the right balance and composition of the Board, remuneration policy and the establishment of Board Committees together with the required mandate and activities.


3. The Board

Authority
The Board derives its authority to act from the Memorandum and Articles of Association (M&A”) of the Company and the law and regulations governing companies in Malaysia.

 

Board Composition
The Articles of Association (“AA”) specifies that the number of Directors shall not be less than five (5) nor more than ten (10). The Board has power under the AA to appoint a Director to fill a casual vacancy or as an additional Director.

 

The Board should comprise at least two (2) Directors or 1/3 of the Board, whichever is the higher, are Independent Directors. If the number of directors is not 3 or a multiple of 3, then the number nearest 1/3 must be used.

 

The composition of the Board should in compliance with the Main Market Listing Requirements (“LR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”). It also balanced to reflect the interests of the major shareholders, management and minority shareholders. Collectively, the Directors bring a wide range of business and financial experience relevant to the direction of the Group.

 

The Board shall at all times promotes and welcomes diversity and gender mix in its composition and gives due recognition to the technical and business experience of the Directors.

 

Appointment
The Company strives to have a Board members with suitable academic and professional qualifications, skills, expertise and wide exposure.

 

Appointment of Board is based on objective criteria, merit and with due regard for diversity in skills, experience, age, cultural background and gender. As such, director candidates should be sourced from a diverse pool.

 

The Malaysian Code on Corporate Governance (“Code”) also endorses the establishment of a nominating committee, comprised exclusively of Non-Executive Directors, a majority of whom are Independent to propose new nominees to the Board and to assess directors on an on-going basis. The Board should use a variety of approaches and sources to ensure that it is able to identify the most suitable candidates.

 

The Nominating Committee (“NC”) is responsible for assessing the nominee(s) for directorship and Board Committee membership and thereupon submitting their recommendation to the Board for decision.

 

Election and re-election
In accordance with the Company’s AA, all Directors are subject to election at the AGM following their appointment.

 

The AA also provide that at least one-third of the remaining Directors be subject to re-election by rotation at each AGM. Any Director so appointed to fill a casual vacancy shall hold office only until the next following AGM, and shall then be eligible for re-election but shall not be taken into account in determining the Directors who are to retire by rotation at that meeting.

 

The performance of those Directors who are subject to re-appointment and re-election of Directors at the AGM will be assessed by the NC whereupon recommendations are submitted to the Board for decision on the tabling of the proposed re-appointment or re-election of the Director concerned for shareholders’ approval at the next AGM.

 

Independence of Director
The Independent Non-Executive Directors are not employees and they do not participate in the day-to-day management as well as the daily business of PIE. They bring an external perspective, constructively challenge and assist Company to develop corporate strategy, scrutinize the performance of Management in meeting approved goals and objectives, and monitor the risk profile of the Company’s business.

 

The Independent Directors are to provide shareholders with an independent voice on the Board and reduce accusations of self-interest in the behaviour of executives.

 

The NC played an important role to assist the Board in assessing the independence of Non-Executive Directors of the Company on an annual basis.

 

Notwithstanding the recommendation of the Code, the Board is presently of the view that there is no necessity to fix a maximum tenure limit for Directors as there are significant advantages to be gained from the long-serving Directors who possess tremendous insight and knowledge of the Company’s businesses and affairs. Similarly, the Board does not set a time-frame on how long an Independent Director should serve on the Board, mainly for the following reasons:-

• The ability of a Director to serve effectively as an Independent Director is very much dependent on his calibre, qualification, experience and personal qualities, particularly his integrity and objectivity, and has no real connection to his tenure as an Independent Director.
• NC would conduct an annual assessment of Independent Directors in respect of inter-alia their skills, experience and contributions, and whether the Independent Directors are able to discharge their duties with unbiased judgement. Furthermore, the NC also would review the Directors Profile of Independent Directors and assess its family relationship, interest of shareholdings in the Company and related party transactions with the Group (if any).

 

New Directorship
The Company has in place its procedures and criteria for appointment of new directors. All candidates for appointment are first considered by the NC, taking into account the mix of skills, competencies, experience, professionalism and other relevant qualities required to well manage the business, with the aim to meet the current and future needs of the Board composition. The NC also evaluates the candidates’ character and ability to commit sufficient time to the Group. Other factors considered for appointment of Independent Director will include the level of independence of the candidates.

 

Role of Board
The Board recognised its stewardship responsibility to lead the Group towards the highest level of corporate governance, strategic decisions and standard of conducts. To ensure the effective discharge of its function and responsibilities, the Board established an internal governance model for delegating of specific powers of the Board to the relevant Board Committees, the Managing Director (“MD”) and the Senior Management of the Company. The Board has direct access to Senior Management and has unrestricted and immediate access to information relating to the Group’s business and affairs in the discharge of their duties. The Board will consider inviting the Senior Management to attend meetings for reporting on major issues relating to their respective responsibility.

 

Chairman and Managing Director ("MD")
There is a clear division of responsibilities between the Chairman and the MD to ensure that there is a balance of power and authority.

 

The Chairman is not related to the MD. The Chairman is responsible for the Board’s effectiveness and conduct. He also promotes an open environment for debate and ensures effective contributions from Non-Executive Directors. The Chairman also exercises control over the quality, quantity and timeliness of information flow between the Board and Management. At a general meeting, the Chairman plays a role in fostering constructive dialogue between shareholders, Board and Management.

 

The MD has overall responsibilities over the operating units, organisation effectiveness and implementation of Board’s policies and decisions.

 

Role of Senior Independent Non-Executive Director
A Senior Independent Non-Executive Director who serves as the point of contact between the Independent Directors and the Chairman on sensitive issues and acts as a designated contact to whom shareholders’ concerns or queries may be raised, as an alternative to the formal channel of communication with shareholders.

 

Board Committees
The Board, in discharging its fiduciary duties, may from time to time establish Committees as it considers necessary to assist it in carrying out its responsibilities.

 

The Board has established 3 Board Committees, namely Audit Committee, NC and Risk Management Committee (RMC), each entrusted with specific tasks and operates within clearly defined terms of reference approved by the Board. The Chairman of the respective Committees reports to the Board on the outcome of the Committee meetings and such reports or minutes will be included in the Board papers.

 

The Chairman of the Audit Committee, RMC and NC would inform the Directors at Board meeting, of any salient findings deliberated at the respective Committee meetings and which require the Board’s notice or direction. The RMC shall report to the Board at least once in a financial year on its proceedings on all matters within its duties and responsibilities.

 

The respective committees' terms of reference are available for reference at the Company's website.

 

Board Meetings
The Board governs the operations of the Group. The Board meets regularly, at least once in a quarter, with additional meetings held as necessary to formulate and adopt strategic business plan for the Group, to evaluate the impact of risks affecting the operations of the Group and to formulate appropriate risk management system.

 

Agenda and documents relevant to the Board meetings are circulated in advance to the Directors for their review before the meetings to ensure the effectiveness of the Board meetings. Any additional information requested by the Directors will be provided in timely manners.

 

All proceedings of the Board meetings are minuted.

 

Access to Information and Independent Professional Advice
The Chairman ensures that all Directors have full and timely access to information with an agenda on matters requiring Board’s consideration issued with appropriate notice and in advance of each meeting to enable Directors to obtain further explanations during the meeting, where necessary.

 

The Directors meet to review and approve all corporate announcements, including the announcement of the quarterly interim financial reports, before releasing them to the Bursa Securities.

 

All Directors have direct access to the advice and services of the Company Secretaries. The Company Secretaries, whose appointment and removal is the responsibility of the Board collectively, are qualified professionals with the necessary experience to advise the Board.

 

When necessary, the Directors could request for the service of independent professional advisors at the cost of the Company.

 

In leading and controlling the operations of the Group, the Board is assisted by the Board of Directors of each individual subsidiary that is primarily responsible to carry out decisions made by the Board. The Executive Directors of the Company also participate in management meeting of certain subsidiaries to ensure that decisions made by the Board are disseminated and delegated effectively to the management of the subsidiaries.

 

Directors' Remuneration
It is vital for the Group to attract and retain Directors of the necessary caliber to run the Group successfully. In line with requirements of the Code, the Group has established a remuneration policy for the Directors.

 

Given the present size of the Board, the Board has decided not to set up a remuneration committee as recommended by the Code. As an alternative, the Board formulated the following policy for fixing remuneration packages of each Director:
1. Determination of remuneration of Directors remained a collective decision of the Board.
2. The remuneration of Non-Executive Directors should be reflective of their experience, level of responsibilities and the contribution by each individual Director.
3. All Directors are entitled to directors’ fee that is subject to shareholders’ approval.
4. Other than directors’ fee, Executive Directors shall be entitled to salary and bonus, statutory contribution and other allowances incidental to the performance of their duties.
5. In determining the remuneration package of the Non-Executive Directors, the Director concerned will abstain from the discussion.
6. The Board may obtain independent professional advice in formulating the remuneration package of its Directors.

 

Board Evaluation and Performance
The NC evaluates the performance of the Board as a whole on an annual basis. The NC ensures that all assessments and evaluations carried out are properly documented.

 

The Board Committees shall also regularly be reviewed by the Board to ascertain their performance and effectiveness.

 

Directors' Training & Continuing Education
In addition to the mandatory programmes as required by Bursa Securities, the Directors are mindful that they should continue to attend training programmes to enhance their skills and knowledge where relevant, as well as to keep abreast with the changing regulatory and corporate governance developments. Therefore, the members of the Board shall attain the training, from time to time, on areas relevant to their duties and responsibilities as Directors by attending external seminars/talks and internally facilitated sessions and through reading materials.


4. Company Secretaries

The Company Secretaries play an advisory role to the Board in relation to the Company’s constitution, Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations. The Company Secretaries support the Board by ensuring that all Board meetings are properly conducted and deliberations at the Board and Board Committee meetings are well captured and recorded. The Company Secretaries also keep the Board update on new statutes and directives issued by the regulatory authorities, and the resultant implications to the Company and the Directors in relation to their duties and responsibilities.


5. Investor Relations And Shareholder Communication

PIE dispatches its notice of AGM to shareholders more than 21-days before the AGM, in advance of the notice period as required under the Companies Act 2016 and LR. The additional time given to shareholders allows them to make necessary arrangements to attend and participate either in person, by corporate representative, by proxy or by attorney.

 

In line with the requirement of the LR and the Code, material information is disseminated to shareholders and investors on a timely basis. The Group maintains a corporate website at www.pieib.com.my which provides information, include:

1. Quarterly results
2. Annual reports
3. Announcements
4. Circular to shareholders
5. Other important announcements

The above information also could be accessed through Bursa Securities website at www.bursamalaysia.com

 

The AA of the Company further accord proxies the same rights as members to speak at the general meeting. Essentially, a corporate representative, proxy or attorney is entitled to attend, speak and vote both on a show of hands and on a poll as if they were a member of the Company. In addition to the above, time will be allocated during AGM for dialogue with shareholders to address issues concerning the Group.

 

The Board will consider adopting electronic voting to facilitate greater shareholder participation at general meetings, and to ensure accurate and efficient outcomes of the voting process.


6. Code of Ethics

The Code of Ethics for Directors includes principles relating to their duties, conflict of interest and dealings in securities are available at the Company’s website.


7. Review of the Board Charter

This Board Charter will be reviewed periodically to ensure the needs of the Company are met as well as to encompass any development in rules and regulations that may have an impact on the discharge of the Board’s duties and responsibilities.

 

The Board will make any necessary amendments to ensure they remain consistent with the Board’s objectives, current laws and governance practices. Any updates to the principles and practices set out in this Charter will be made available on the Company’s corporate website.

 

The Board charter has been adopted and subsequently revised by the Board on 23 February 2018.