MALAYSIA Law and Practice Contributed by: Dato’ Tan Yee Boon, Stephanie Chan Pik Jia and Joaana Keng Li Xin, David Lai & Tan
Board The Board holds ultimate responsibility for the strategic direction, corporate oversight and long-term success of the company. In line with Principle A, Part I of the MCCG, the Board inte - grates sustainability considerations into corpo - rate strategy and maintains collective account - ability for governance outcomes. It oversees senior management, ensures regulatory com - pliance and fosters ethical leadership and good governance. Key responsibilities include approv - ing major decisions, appointing and removing executives, and supervising financial perfor - mance. Directors are also expected to exercise professional scepticism and address evolving ESG risks to maintain stakeholder confidence and achieve long-term resilience. SMT The SMT, led by the chief executive officer (CEO) and/or managing director (MD), is responsible for executing the strategic initiatives and opera - tional plans approved by the Board. The SMT manages the company’s core functions, includ - ing finance, operations, marketing, human resources and legal affairs, and is accountable to the Board for achieving corporate goals and sustainable value for shareholders. As per Guid - ance 4.4 of the MCCG, performance evaluations of the Board and SMT should consider their role in addressing sustainability risks and progress on sustainability targets, promoting accountabil - ity and ensuring that issues are addressed and shareholders are kept informed of the outcomes. Board Committee The ARMC is responsible for reviewing and approving financial statements, overseeing internal and external audits and ensuring effec - tive internal controls and risk management frameworks. The NC focuses on Board com - position and effectiveness by making decisions
on the nomination, re-election and performance evaluation of directors, as well as succession planning. Meanwhile, the RC is entrusted with developing and reviewing policies related to executive remuneration, assessing executive performance and determining appropriate com - pensation packages. Together, the Board Com - mittee ensures accountability, transparency and integrity in governance practices. Collaborative Governance Framework for Effective Decision-Making While each governance body operates within defined parameters, effective governance is achieved through collaborative efforts. The inte - gration of functions between the Board, SMT and Board Committee ensures that decisions are made in a transparent, accountable and well- informed manner. This cohesive governance framework supports the company’s commitment to regulatory compliance, ethical conduct and long-term value creation for stakeholders. 3.3 Decision-Making Processes Board The Board serve as the apex decision-making body, entrusted with setting the company’s stra - tegic direction, overseeing financial and opera - tional performance and ensuring compliance with legal and ethical standards. The decision-making process typically begins with the distribution of relevant documentation, including financial reports, strategic proposals and risk assessments, to directors prior to Board meetings to enable informed deliberation. Formal Board meetings are then convened, dur - ing which directors discuss and deliberate on the matters tabled in the agenda. Decisions are made through collective agreement or formal voting, where required, and directors are expect -
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