DIRECTORS’ FIT AND PROPER POLICY
P.I.E. INDUSTRIAL BERHAD (“PIE” or the “Company”) has adopted the Directors’ Fit and Proper Policy to ensure a formal, rigorous and transparent process for the appointment and reelection of directors and senior management of the Company and its subsidiaries.
In formulating this policy, the Company is obliged to comply with the requirements contained in the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”) and other applicable rules and regulations at the prevailing country to ensure compliance with the obligations imposed.
This Policy aims to guide the Company’s Board of Directors (the “Board”) and Nomination Committee (“NC”) in their review and assessment of potential candidates for appointment as Directors as well as directors who are seeking for re-election in complying with the new Rule 15.01A of MMLR.
This Policy is to ensure that Directors must possess the character, integrity, relevant range of skills, knowledge, experience, competence and time commitment to carry out their roles and responsibilities effectively in the best interest of the Company and its stakeholders.
The general criteria that form the overarching criteria in relation to the Policy are outlined below:
- a) Character and integrity;
- b) Experience and competence; and
- c) Time and commitment
3.SCOPE AND APPLICATION
In accessing if a candidate met the criteria under this Policy, the Board and NC should consider factors which includes but are not limited to the following:
a)Character and integrity:
- is compliant with legal obligations, regulatory requirements and professional standards;
- has not been obstructive, misleading or untruthful in dealings with regulatory bodies or a court;
- have not been reprimanded or disqualified or removed by a professional or regulatory body in relation to matters in respect to the person’s honesty, integrity or business conduct.
2.Personal integrity, honestly and ethical behaviour
- has not perpetrated or participated in any business practices which are deceitful, oppressive improper (whether unlawful or not), or which otherwise reflect discredit on his professional conduct;
- service contract (i.e. in the capacity of management or director) had not been terminated in the past due to concerns on personal integrity;
- has not abused other positions (i.e. political appointment) to facilitate government relations for the company in a manner that contravenes the principles of good governance;
- have no concurrent responsibilities or interest which would contribute to a conflict of interest situation or otherwise impair the ability to discharge duties and responsibilities as Director of the Company and/or its subsidiaries.
3. Financial integrity
- manages personal debts or financial affairs satisfactorily;
- demonstrates ability to fulfil personal financial obligations as and when they falldue;
- have not been subjected to a judgment debt which is unsatisfied, either in whole or in part whether in Malaysia or elsewhere
- is of good repute in the financial and business community;
- has not been the subject of civil or criminal proceedings or enforcement action, in managing or governing an entity for the past 10 years;
- has not been substantially involved in the management of a business or company which has failed, where that failure has been occasioned in part by deficiencies in that management;
- have not been reprimanded by the Securities Commission Malaysia, Bursa Malaysia Securities Berhad, Suruhanjaya Syarikat Malaysia, Bank Negara Malaysia or any other regulatory authorities both local or abroad.
b) Experience and competence
1.Qualifications, training and skills
- possesses education qualification that is relevant to the skill set that the director is earmarked to bring to bear onto the boardroom (i.e. a match to the board skill set matrix);
- has a considerable understanding on the workings of a corporation;
- possesses general management skills as well as understanding of corporate governance and sustainability issues;
- keeps knowledge current based on continuous professional development;
- possesses leadership capabilities and a high level of emotional intelligence;
- Financial literacy especially able to read and understand financial statements
2.Relevant experience and expertise
- possesses relevant experience and expertise with due consideration given to past length of service, nature and size of business, responsibilities held, number of subordinates as well as reporting lines and delegated authorities.
3. Relevant past performance or track record
- had a career of occupying a high level position in a comparable organization, and was accountable for driving or leading the organization’s governance, business performance or operations;
- possesses commendable past performance record as gathered from the results of the board effectiveness evaluation.
c) Time and commitment
1.Ability to discharge role having regard to other commitments
- able to devote time as a board member, having factored other outside obligations including concurrent board positions held by the director across listed issuers and on-listed entities (including not-for-profit organizations).
2.Participation and contribution in the board or track record
- demonstrates willingness to participate actively in board activities;
- demonstrates willingness to devote time and effort to understand the businesses and exemplifies readiness to participate in events outside the boardroom;
- manifests passion in the vocation of a director;
- exhibits ability to articulate views independently, objectively and constructively;
- exhibits open mindedness to the views of others and ability to make considered judgment after hearing the views of others.
4.RESPONSIBILITIES OF THE BOARD AND NC
4.1. The Board and NC shall be directly responsible for conducting assessments on the fitness and propriety of directors based on the high-level and baseline considerations outlined in Clause 3 above and making decisions on their appointments.
4.2. The NC will evaluate candidates for new appointment as Directors based on the fit and proper criteria as spelt out in Clause 3before recommending to the Board for approval. The candidates are required to complete the Candidate for Directorship profile. The candidates will also be required to complete a self-declaration of fit and proper form and authorise the Company to perform background check, if necessary, which may cover previous employment verification, professional reference checks, education confirmation and/or criminal record and credit checks.
4.3. For re-appointment of Directors, the Directors will be evaluated based on the Board Evaluation Form. The NC has the power not to recommend to the Board the reappointment of retiring Directors who do not meet the policy requirements.
4.4. The information gathered from the assessments shall be for the NC’s strict use for the purpose of the assessment and not for public disclosure.
5.ASSESSMENT OF FITNESS AND PROPRIETY OF DIRECTORS
5.1. The fit and proper assessments on each director within the scope of this Policy shall be conducted by the Company both prior to initial appointments and at regular intervals of at least annually or whenever the Company becomes aware of information that may materially compromise a director’s fitness and propriety.
5.2. The Company will consider the factors set out in Clause 3 above in assessing a director’s fitness and propriety. The factors shall be assessed individually, as well as collectively, taking into account their relative importance. Failure to meet one factor on its own does not necessarily mean failure to meet the fit and proper criteria. The Company will consider the specific circumstances surrounding a director’s failure to meet specific factors, such as the lapse of time since the occurrence of events, other contributing factors and the significance of the event from the perspective of potential risks posed to the Company.
5.3. The Company should exercise the assessment objectively in the best interests of the Company and the sound conduct of the Company’s business. In conducting the assessment, the Company should consider whether there have been material changes in the nature or scope of the responsibilities assumed by a director in which higher standards of competence or judgement are required in order to properly perform the duties associated with the said position.
6.NON DISCLOSURE OF SENSITIVE AND CONFIDENTIAL INFORMATION
Whilst the Company should disclose the customised considerations and expectations in this Policy, the Company will not disclose any sensitive and confidential information.
The Company Secretary will inform the Board for any updates of requirements for reporting, and guidance for implementing of this policy to ensure it aligned to any legal or regulatory changes and the best practices under the Malaysian Code on Corporate Governance.
This Policy shall be reviewed periodically by the Board and be revised at any time as it may deem necessary in accordance with the needs of the Company, the MMLR and/or any other applicable laws enforced at the time being. The Directors’ Fit and Proper Policy has been adopted by the Board on 29 June 2022.