WONG ENGINEERING CORPORATION BERHAD BOARD CHARTER

  1. Preamble

    The enhancement of corporate governance standards is vital towards achieving the objectives of transparency,  accountability  and  effective  performance  for  Wong Engineering  Corporation Berhad (“the  Company”) and  its Group of companies (“the  Group”).
    It is  with the  aim of enshrining concepts of good governance as promulgated in the Malaysian Code on Corporate Governance (“the Code”) that this Board Charter (“Charter”) is established.

    The Charter serves as a reference point for Board activities should not be construed as a blueprint for Board operations. Just as each organisation has its own corporate  culture, the dynamics of each Board in unique. The dynamics shift as the composition
    of the  Board changes, and the directors of Wong Engineering Corporation Berhad “(the Company”) should always be open to new opportunities and ready to confront new challenges brought about by change. This Charter is designed to provide guidance
    and clarity for directors and management with regard to the role of the Board and its committees, the requirements of directors in carrying out their role and in discharging their duties towards the company as well as the Board’s operating practices.

  2. Interpretation
    1.  In this Charter:

      “Board” means the Board of directors of the Company;

      “Business” means the business of the Company;

      “Chairman” means the chairman of the Board and is used in a gender neutral sense;

      “Company Secretary” means the Board secretary (ies) or the person(s) normally exercising the functions of a Board secretary;

      “Management” means the management personnel of the Company;

      “Shareholders” means the shareholders of the Company;

      “CEO” means the Chief Executive Officer of the Company;

      “Independent Director” (THIS WILL HAVE TO BE AMENDED  TO BE IN LINE WITH PRACTICE NOTE 13/2002 OF THE BURSA MALAYSIA) is defined in accordance to Paragraph 1.01 of the  Listing Requirement. An independent director is a director
      who is independent of management and free from any business or other relationship which could interests of an applicant or the Company. Without limiting the generality of the foregoing, an independent director is one who:-

      • in not  an  executive  director  of the  Company  or  any related  corporation  of the Company;
      • has not been within the last two (2) years and is not an officer (except as independent director) of the Company or related corporation of the Company. For this purpose, “officer” shall have the meaning given in section 4 of the Companies Act
        1965;
      • is  not  a  major  shareholder of the  Company, or  any  related corporation of the Company. Major shareholder shall carry the same meaning as that prescribed under Paragraph 1.01 of the KLSE Listing Requirements;
      • is not a relative of any executive director, officer or major shareholder of the Company or its related corporation. For this purpose,  “relative” means  the  spouse,  parent, brother, sister, child (including adopted or step child) and the
        spouse of such brother, sister or child;
      • is not  acting as a nominee or representative of any executive director or major shareholder of the company or any of its related corporation;
      • is  not  engaged  as  a  professional adviser by the  Company or  any of its related corporation either personally or through a firm or company of which he is a partner, director or major shareholder, as the case may be; or
      • has not within the last two years and does not engage in any transaction with the Company or its related corporation, whether  by himself or with other  persons  or through a firm of which he is a partner, director or major shareholder, as the
        case may be, the value of which exceeds RM250,00.

      “Listing Requirements” means the KLSE Listing Requirements.

  3. Role of the Board
    1. Stewardship of business The group is under the effective stewardship of the Board of directors that provides the group with business and operational direction and objective to enhance long-term shareholder value.
    2. Formal schedule of matters for its decision The Board is to  meet  regularly with notices of issues to  be  discussed and  record  its conclusion in discharging its duties and responsibilities.

      The Board should meet at least 4 times a year and the details of attendances of each individual director in respect of such meetings held would be disclosed. The Board should have a formal schedule of matters specifically reserved to it for decision
      to ensure the direction and control of the company is firmly in its hands.
    3. The principal responsibilities of the Board as adopted from the Code The  Board  should  explicitly  assume  the  following  six  specific  responsibilities,  which facilitate the discharge of the Board’s stewardship responsibilities:
      • Reviewing and adopting a strategic plan for the company ;
      • Overseeing the conduct of the company’s business to evaluate whether the business is being properly managed;
      • Identifying principal risks and ensure the implementation of appropriate system to manage these risks;
      • Succession planning. Including appointing, training, fixing the compensation of and where appropriate, replacing senior management;
      • Developing and  implementing  an  investor  relations  programme  or  shareholder communication policy for the company;
      • Reviewing the adequacy and the integrity of the company’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines; and
      • The board should undertake an assessment of its independent directors annually.
  4. Board Structure

    There should be a clearly accepted division of responsibilities at the heard of the company, which will ensure  a balance of power  and authority, such as no individual has absolute power  of decision.

    The positions of chairman and CEO should be held by different individuals, and the chairman must be a non-executive member of the board. Where roles are combined, there should be a strong independent element on the Board. A decision to combine the roles
    of chairman and CEO should be publicly explained. The number of Board members are to be in accordance to the company Memorandum and Article of Association (M & A).

    1. Board Balance and Mix

      The Board should include a balance of executive directors and non-executive directors (including independent non-executive directors) such that no individual or small group of individuals can dominate Board’s decision making.

      To be effective, independent non-executive directors need to make up at least one third of the membership of the Board.

      Non-executive directors should be persons of calibre, credibility and have the necessary skill and experience to bring an independent judgment to bear on the issues of strategy, performance  and resources  including key appointments and standards
       of conduct. The Board should identify a senior independent non-executive director of the Board in the annual report to whom concerns may be conveyed.

    2. Role of the chairman

      In  respect  of the  running  of the  Board, chairman are  primarily  responsible for  the following:-

      • the working of the Board;
      • the balance of membership, subject to Board and shareholder approval;
      • ensuring that all relevant issues are on the agenda;
      • ensuring that  all  directors,  executive  and  non-executive  alike,  are  enabled  and encouraged  to play their full part in its activitie This includes making certain that directors, especially  non-executive directors receive timely,  relevant
        information tailored to their needs and that they are properly briefed on issues arising at Board meeting; and
      • ensuring that executive directors look beyond their executive function and accept their full share of responsibilities of governance.
    3. Role of the Chief Executive Officer (CEO)
      • To manage the business and implement policies and strategies adopted by the Board;
      • The Board, together with the CEO, should develop position descriptions for the Board and for CEO, Involving definition of limits to management’s responsibilities; and
      • In addition, the Board should approve, or develop with CEO, the corporate objectives, which the CEO is responsible for the meeting.
  5. Tenure of Directors

    The Articles of Association provide that at the first Annual General Meeting of the company, all the directors shall retire from office, and at the Annual General Meeting in every subsequent year, one third of the directors for the time being, or of their
    number is not three (3) or a multiple of three, then the number nearest one third shall retire from office. An election of directors shall take place each year and all the directors shall retire from office at least in each three (3) years but shall
    be eligible for re-election.

    Directors over seventy (70) years of age are required to submit themselves for re-appointment annually in accordance with Section 129 (6) of the Companies Act, 1965.

    The company secretaries will ensure that all information necessary is obtained, as well as all legal and regulatory obligations are met before the appointments are made.

    The tenure of an independent director should not exceed a cumulative term of nine years starting from the time the individual is first appointed as an independent director of a company.

    Upon completion of the nine years, an independent director may continue to serve on the board subject to the director’s re-designation as a non-independent director. The board must justify and seek shareholders’ approval at the nearest AGM before the
    director reaches the nine year term limit in the event it retains as an independent director who has served in that capacity for more than nine years.

    Failure to seek shareholders’ approval for the extension of the tenure of any independent director prior to the nine year term limit must be explained in the annual report. Shareholders’ approval should be sought annually after the nine year term limit.

  6. Company Secretary

    Directors should appoint as secretary someone who is capable of carrying out the duties to which the post entails and their removal should be a matter for the Board as a whole. The Board should recognize that  the  chairman is entitled to  the  strong
     and  positive support  of the  company secretary in ensuring the effective functioning of the Board.

    The company secretary has a key role to play in are as following:-

    • to ensure that Board procedures are followed regularly and are reviewed.
    • to administer, attend and prepare minutes of the Board proceedings.
    • as a perfect candidate for undertaking an advisorial role in relation to the Board in respect of compliance issues.
    • to play a crucial role in encouraging compliance with law.
    • to give guidance  to  the  Board  on what  their  responsibilities  are  under  the  rules  and regulations to which they are subject and how those responsibilities should be discharged.
    • to give advice that concerning all laws and regulations, routine filing requirements and other administrative requirements of the CA.
    • should equip themselves sufficiently to be able to render advice on matters pertaining to implementation of the Code of Best Practice.
    • every director  also  has  unhindered  access  the  advice  and  services  of the  company secretaries. The Board believes that  the  current  company  secretaries are  capable of carrying out their duties to ensure the effective functioning of
      the Board.
  7. Board Committees

    Where the Board appoints a committee, it should spell out the authority of the committee, and in particular, whether the committee has the authority to act on behalf on the Board or simply has the authority to examine a particular issue and report back
    to the Board with a recommendation.

    1. Audit Committee
      • The Board should establish an audit committee of at least three directors, a majority of whom are independent, with written terms of reference which deal clearly with its authority and duties. The chairman of the audit committee should be an
        independent non-executive director.
      • An independent audit  committee  serves to implement  and support  the  oversight functions of the Board in several way
        1. to  review  the  company’s  processes  for producing  financial data,  its  internal controls, and the independence of the company’s external auditor, and a forum for dialogue with the company’s external and internal auditors.
        2. reinforces the  independence of the  company’s external auditor, and thereby helps assure  that  the  auditor will  have  free  rein in the  audit proce  This reinforcement is achieved in part by conferring, on an organ that is independent
          of the management whose financials results are being audited, a vital role in the retention, discharge, and compensation of the external auditor.
        3. provides a  forum  for  regular, informal and  private discussion  between  the external auditor and directors who have no significant relationships with managemen The provision of an institutionalized forum facilitates and indeed encourages
           the  external auditor to  raise potentially troublesome issues at  a relatively early stage,  allows the  auditor to  broach  sensitive problems in an uninhibited and  private fashion, and  gives the  auditor assurance  that  it can readily
          get a hearing in the event of disagreement with management
        4. reinforces the objectivity of the internal auditing departmen A working relationship with an audit committee can increase the status and effectiveness of the internal auditing department
      • The duties of the audit committee should include the following-
        • to consider the appointment of the external auditor, the audit fee and any questions of resignation or dismissal;
        • to discuss with the external auditor before the audit commences, the nature and scope of the audit, and ensure co-ordination where more than one audit firm is involved;
        • to review the quarterly and year-end financial statements of the company, focusing particularly on:-
          1. any changes in accounting policies and practices;
          2. significant adjustments arising from the audit;
          3. the going concern assumption;
          4. compliance with accounting standards and other legal requirement.
        • to discuss problems and reservations arising from the interim and final audits, and any matter the auditor may wish to discuss (in the absence of management where necessary);
        • to review the external auditor’s management letter and management’s response;
        • to do the following where an internal audit function exists:-
          1. review the adequacy of the scope, functions and resources of the internal audit functions, and that is has the necessary authority to carry out its work;
          2. review the internal audit programme and results of the internal audit process and where necessary ensure that appropriate action is taken on the recommendations of the internal audit function;
          3. approve any appointment or termination of senior staff members of the internal function; /li>
          4. inform itself of resignations of internal staff members and provide the resigning staff member an opportunity to submit his reasons for resigning
        • to consider any related party transactions that may arise within the company or group;
        • to consider the major findings of internal investigation and management’s response;
      • The finance director, the head of internal audit (where such a function exists) and a representative of the external auditors shall normally attend meetings. Other Board members may attend meetings upon once a year and the committee shall
        meet with the external auditors without executive board members present.
      • The audit committee must have explicit authority to investigate any matter within its terms of reference, the resources which it needs to do so and full access to information. The committee should be able to obtain external professional advice
        and to invite outsiders with relevant experience to attend if necessary.
      • The audit committee should meet regularly, with due notice of issues to be discussed and should record its conclusions in discharging its duties and responsibilities.
      • The Board should disclose in an informative way, details of activities of audit committees, the number of audit meetings held a year and details of attendance of each individual director in respect of meetings.
      • The Board should establish an internal audit function. When an internal audit function does not exist, the Board should assess whether there are other means of obtaining sufficient assurance of regular review and/or appraisal of the effectiveness
        of the system of internal controls within the company. The Board should explain, in summary, the means that exist for obtaining such assurance of regular review and/or appraisal.
      • The internal audit function should be independent of the activities they audit and should be performed with impartiality, proficiency and due professional care, The Board or the audit committee should determine the remit of the internal audit
        function.
    2. Nomination Committee
      • Membership
        1. The membership of the committee shall comprise exclusively of non-executive directors and number at least three (3) in total.
        2. The chairman of the committee shall be a non-executive director appointed by the Board.
        3. The majority of the members of the committee shall comprise independent directors.
        4. The quorum of the committee shall be two(2) member
      • Secretary

        The secretary of the company shall be secretary of the committee

      • Advisers

        The committee is authorised by the Board to seek appropriate professional advice inside and /or outside the group as and when it considers this necessary.

      • Duties

        The duties of the committee shall be to:

        1. Recommend to the Board, candidate for all directorships. In making the recommendations the committee should also consider candidates proposed by the managing director and within the bounds of practicability, by any other senior executive,
          director or shareholder;
        2. Recommend to the Board, directors to fill the seats on Board committees;
        3. Review annually the required mix of skills and experience of the Board, including the core competencies which non-executive directors should bring to the board; and
        4. Assess annually the effectiveness of the Board as a whole, the committees of the Board and the contribution of each individual director.
      • Minutes

        The minutes of meeting of the committee shall be circulated to all member’s of the Board.

    3. Remuneration Committee
      • Boards should appoint remuneration committees, consisting wholly or mainly of nonexecutive directors, to recommend to the Board the remuneration of the executive directors in all its forms, drawing from outside advice as necessary. Executive
        directors should play no part in decisions on their own remuneration. Membership of the remuneration committee should appear in the directors’ report.
      • The determination of remuneration packages of non-executive directors, including non-executive chairman should be a matter for the Board as a whole. The individuals concerned should abstain from discussion of their own remuneration.
      • Membership
        1. The members of the committee shall comprise wholly or mainly of non-executive directors and number at least 3 in total.
        2. The chairman of the committee shall be a non-executive director appointed by the Board
        3. The quorum of the committee shall be at least two (2) members
      • Secretary

        The secretary of the company shall be the secretary of the committee

      • Attendance

        The group managing director may be invited to attend meetings to discuss the performance of executive directors and make proposals as necessary.

        The committee may appoint external consultant to aid the committee in the discharge of its duties.

      • Frequency of meetings

        Meetings shall be held at least two (2) times a year.

      • Advisers

        The committee is authorised by the Board to seek appropriate professional advice inside and outside the group as and when it considers this necessary.

      • Duties

        The duties of the committee shall be recommend to the Board the remuneration of the executive directors in all its forms, which may include:

        1. Reviewing existing or proposed share option schemes, in conjunction with the Employee’s Share Option Scheme Committee, if one has already been set up;
        2. Reviewing superannuation benefits, if deemed relevant and applicable;
        3. Reviewing retirement and termination systems;
        4. Considering fringe benefit issues, including benefits-in-kind;
        5. Reviewing indemnity and liability insurance policies; and
        6. Evaluating and proposing contractual terms in the service contracts of executive directors.

    Evaluating different remuneration methods and philosophies as well as conducting studies of current industry practice.

  8. The Board’s Relationship with Shareholders and Stakeholders

    Board must  maintain an  effective communication policy  that  enables both  the  Board and management to  communicate effectively with its shareholders, stakeholders and  the  public generally.  This  policy  must  effectively  interpret  the  operations
     of  the  company  to  the shareholders and must accommodate feedback from shareholders, which should be factored into the company’s business decisions.

    The channels are:-

    1. Dialogue between Companies and Investors Companies and institutional shareholders should each be ready, where practicable, to enter into a dialogue based on the mutual understanding of objectives.
    2. The AGM Companies should use the AGM to communicate with private investors and encourage their participation.
  9. Board Processes
    1. Board Meeting

      The directors may meet together for the dispatch of business, adjourn and otherwise regulate their meetings as they think for. Any director may at any time and the secretary shall on the requisition of any directors summon a meeting of the directors.

      It shall not be necessary to give any director or alternate director, who has not got an address in Malaysia, registered with the company, notice of a meeting of the directors. Unless otherwise determined by the directors from time to time
      notice of all directors’ meetings shall be given to all directors and their alternates, who have a registered address in Malaysia, Except in the case of an emergency, notice of each directors’ meeting shall served in the manner referred to
      in Articles 149 and 150 and the said Articles 140 and 150 shall apply mutatis mutandis to the service of notice on members of the company.

      The quorum necessary for the transaction of the business of the directors shall be two and a meeting of the directors for the time being at which a quorum is present shall be WEC Board Charter competent to exercise all or any of the powers,
      authorities and discretions by or under these Articles bested in or exercisable by the directors general.

      The directors may elect a chairman of their meetings and determine the period for which he is to hold office and unless otherwise determined the chairman shall be elected; if no such chairman is elected, or it at any meeting the chairman is
      not present within ten (10) minutes after the time appointed for holding the meeting, the directors present may choose one of their number to be chairman of the meeting.

      Subject to these Articles any question arising at any meeting of directors shall be decided by a majority of votes and a determination by a majority of directors shall for all purposes be deemed a determination of the directors. In case of an
      equality of votes the chairman of the only two directors from the quorum are competent to vote on the question at issue.

    2. Agenda

      Careful preparation of the agenda enhances Board productivity, and strengthens its supervisory role. At every regular Board meeting, directors should: Discuss emerging issues that could affect the business, such as to:

      • Receiving reports from the CEO on operational and performance matters and strategic issues;
      • Debate the need to review the strategic direction and supporting strategies;
      • Monitor management’s performance and its explanations for variances;
      • Review operations for the previous month, year-to-date, and forecast covering the remainder of the relevant accounting period;
      • Benchmark the group’s and company’s performance against competitors;
      • Discuss and approve capital spending sanctions over and above delegated levels.

      All these matters should be documented in the Board papers, with discussion focussing on strategic points of particular interest and concern. A range of others should be periodically included in the Board agenda, examples of which are as follows:

      1. Corporate planning
        • Objectives
        • Goals and budgets
        • Acquisitions and divestments.
      2. Segregation of management disciplines
        • Establish and review a register of delegated authorities covering:
        • Financial control
        • Marketing
        • Personnel/Human resources;
        • Production;
        • Treasure Management.
      3. Monitoring budgets
        • Compare budgeted to actual results, obtaining explanations for deviations and adjustments to forecast;
        • Review appropriateness and relevant of budgeting and forecasting methodologies;
        • Benchmark results against industry averages and/or best practice;
      4. Strategy formulation and planning
        • Evaluate corporate strategy, including:
          • Diversification;
          • Coordination of business segments
          • Investment priorities and the allocation of resources across activities;
          • Managing the scope and mix of various activities to improve performance.
          • Develop/ approve long-term business strategy or scenarios based on the company’s strategic direction.
      5. Formulating and monitoring company policies
        • Reinforce values and corporate code of conduct;
        • Formulate and monitor policies, including:
          • risk management
          • delegation of Board authorities;
          • quality control measures;
          • backup and storage of vital records;
          • disaster recovery planning;
          • enterprise bargaining;
          • environmental policies;
          • equal opportunities;
          • occupational health and safety
          • terms of trade
          • treasury systems and controls; and
          • ensure these policies are properly documented and communicated to all relevant personnel
      6. Evaluating Management
        • Formally evaluate senior management’s performance at least annually;
        • Review management skills and qualifications, particularly in high-risk areas of the business and;
        • Consider succession planning for senior executives
      7. Reporting controls
        • Internally, review management information systems to ensure that both Board and management are receiving relevant and reliable information; and
        • Externally, review existing accounting policies against the appropriate standards, and review the questionnaire completed by management to ensure that published financial statements give a true and fair view of the state of affairs of
          the group and company and their results and cash flows for the period reported on.
      8. Internal controls; regulatory compliance
        • Review regulations affecting the group’s and company’s operations;
        • Develop and review systems for monitoring regulatory compliance;
        • Review compliance reports prepared by the internal audit function.
      9. Internal controls; general accounting
        • Evaluate the quality of accounting control systems; and
        • Review audit reports, both the external auditors and internal audit function, on internal accounting controls.
      10. Internal controls; internal audit
        • Review the scope and depth of coverage of the internal audit function;
        • Review and discuss reports from the internal auditors in internal control recommendations, and confirm that appropriate action has been taken; and
        • Ensure that there is effective communication and liaison between the internal and external functions.
      11. Internal controls; external audit
        • Review the draft letter of representation requested by the external auditors, and confirm that the representations have been considered;
        • Ensure that issues raised by external auditors have been satisfactorily resolved;
        • Review the external auditors’ internal control recommendations. And ensure appropriate actions has been taken; and
        • Review minutes of audit committee meetings.
      12. Internal controls; fraud
        • Institute sound internal controls that are regularly reviewed by senior management;
        • Develop strategies to cost-0effectively mitigate the assessed risk of fraud;
      13. Funding
        • Check key loan repayment dates to ensure the group and company do not default;
        • Invest surpluses appropriately and promptly;
        • Ensure any forecast cash flow shortages are addresses;
        • Review the group’s and company’s funding requirements on a continuing basis; and
        • Determine that any exchange risk, credit risk and interest rate risk associated with any funding or replacement are acceptable.
      14. Acquisitions, mergers, divestment and takeovers
        • Ascertain that assets are appropriately valued, and that the company’s shares are fairly valued by the market, to reduce susceptibility to takeover; and
        • Conduct regular analysis of trading activity in the company’s shares and identify areas of concern.
      15. Reporting systems
        • Ensure non-financial regulatory compliance systems are reliable, including:
          • Control of dangerous and/or prohibited substances;
          • Equal opportunity and anti-discrimination requirements;
          • Occupational health and safety; and
          • Environmental issues and waste disposal
    3. Meeting papers

      The directors shall cause minutes to be duly entered in books provided for the purpose:-

      1. Of all appointment of officer;
      2. Of the names of all the directors present at each meeting of the directors and of any committee of directors and of the company in general meeting;
      3. Of all resolutions and proceedings of general meetings and of meetings of the directors and committees of directors; and
      4. Of all orders made by the directors and any committee of directors.

      Such minutes shall be signed by the chairman of the meeting at which the proceedings were held or by the chairman of the next succeeding meeting.

      The books containing the minutes of proceedings of any general meeting shall be kept by the company at the registered office or the principal place of business in Malaysia of the company, and shall be open to the inspection of any member
      without charge.

  10. Access to Information

    Directors should have access to all information within a company whether as a full Board or in their individual capacity, in furtherance of their duties.

    The Board should receive information that is not just historical or bottom line and financial oriented but information that goes beyond assessing the quantitative performance of the enterprise and looks at other performance factors such as customer
    satisfaction, product and service quality, market share, market reactions, environmental performance and so on, when dealing with any item on the agenda.

    The Chairman of the Board shall undertake primary responsibility for organising information necessary for the Board to deal with the agenda and for providing this information to directors on timely basis. If the chairman is also the CEO, the Board should
    also have in place a procedure to ensure that its agenda items are placed on the agenda and for providing this information to directors.

  11. Independent Professional Advice

    There should be an agreed procedure for directors, whether as a full board or in their individual capacity, in furtherance of their duties to take independent professional advice at the company’s expense, if necessary.

    All directors should have access to the advice and services of the company secretary.

  12. Induction

    Best Practice in Induction of Independent Directors

    1. Objective

      To provide independent directors with a rapid and valuable insight into the group and the company, without making him or her so familiar with their operations that he or she no longer feels able to ask naïve questions.

    2. The Programme

      Induction of independent directors may include (but not limited to) the following-

      • A clear contact and covering letter;
      • Time with  other  executive  directors  (in  particular  the  chairman,  the  company secretary  and,  if  the  independent directors is  a  functional specialist, his or  her counterpart);
      • A copy of the previous Board minutes for at least the past six months, with explanation of the background behind them;
      • A copy of the business/strategic plan, together with the profile of key competitors and their strategies;
      • A copy of any significant reports  by management consultant  on  area  of Board responsibilities;
      • An opportunity to attend other key management meetings;
      • An opportunity to attend presentation to the investment community;
      • Visits  to   key  sites   (including   overseas   locations,   if   the   business   is  strongly international);
      • Introduction to some key customers and suppliers;
      • Invitations to company social events; such as sponsored concerts;
      • A formal 1-2 day induction programme, including many of the elements above, but also presentations from various divisions on their strengths, weaknesses and ambitions;
      • Appointment of a mentor, form among the more experienced independent directors of the Board, for the first few months; and
      • A formal personal  development  plan  constructed  to address  those  competencies, where the individual is relatively weak. For example, he or she could enhance strategic

      skills by being assigned to a working party to develop strategic option for part of the business.

    3. Induction Needs Analysis

      This analysis  should be conducted  prior to the induction process. This is to identify the relevant directors and their specific training needs. Various sources of information may be used to gather information for the analysis including:

      • A questionnaire issued to the directors asking them to identify their training needs on their general knowledge of the group and company. There might be several areas that directors know they lack knowledge:
      • Data from similar industry;
      • Company records and data; and
      • External consultants and their training programme
    4. Purpose of an Induction Needs Analysis are:

      • Identify the directors involved and their specific needs;
      • Identify the induction and training facilitator;
      • Set the objective for the induction programme; and
      • Decision on the duration, timing and venue for the programme.
  13. Directors’ external commitment and conflict of interest

    Every director shall comply with the provisions of Sections 131 and 135 of the Act in connection with the  disclosure of his shareholding and interests in the  company and his interest in any contract or proposed  contract with the company and in connection
    with the disclosure, every director shall state the fact and the nature, character and extent of any office or possession of any property whereby whether directly or indirectly duties or interest might be created in conflict with his duty or interest
    as a director of the company.

  14. Representation of the company

    Investor’s relation or information officer will be appointed in providing information on the affairs of the company or making presentation to institution and other investor.

    A direct dialogue gives investors a better  appreciation of a company’s objectives, its potential problems and  the  quality of its management, while also making a company  aware  of the expectations and concerns of the shareholder. Two way communications
    between  companies and institutions is an important aspect of corporate  governance because  corporate  managers need  full information about  the  assessments  of institutions that  hold their shares.  Two way communications such as this helps
    create a more stable shareholding and take a longer term view of their investment if they have a better understanding of the corporate strategy.

    We therefore encourage this relationship provided two issues are properly addressed. The information which a company provides to an investor should not qualify as undisclosed material information about the corporation. Companies should endeavour
     to ensure  that  the same opportunity should be available to all shareholders.

  15. The Company’s Constitution and Management’s Limits
    1. Limitations on directors’ powers

      The directors shall not without the prior approval of the company in the general meeting:-

      • Carry into effect any proposal or execute any transaction for the acquisition of an undertaking or property of a substantial value, or the disposal of a substantial portion of or a controlling interest in the company’s main undertaking or
        property;
      • Exercise any power of the company to issue shares unless otherwise permitted under the Act;
      • Subject to Section 132E of the Act, enter into any arrangement or transaction with a director of the company or its holding company to acquire from or dispose to such a director or person any non-cash assets of the requisite value.
    2. Managing Director

      The directors may from time to time appoint any one or more of their body to be managing director for such period not exceeding five (5) years subject to reappointment and upon such terms as they think fit, and may vest in such managing directors as may
      appointed by them such of the powers hereby vested in the directors shall be subject to control of the Board.

      The remuneration of a managing director shall be fixed by the directors and may be by way of salary or commission or participation in profits or otherwise or by any or all of these modes but shall not include a commission on or percentage of turnover.

      A  managing director shall not,  while he  continues to  hold that  office, be  subject  to retirement by rotation, and he shall not be reckoned  as a director for the  purpose  of determining the rotation or retirement of directors or in
      fixing the number of directors to retire, but  he  shall, subject  to  the  provisions of any contract  between  him and  the company, be subject to the same provisions as to resignation and removal as the other directors of the company and
      if he ceases to hold the office of director for any cause he shall ipso facto and immediately cease to be a managing director.

    3. Management’s limits

      The Board, together  with the  CEO,  should develop position descriptions for the  CEO, involving definition of the limits to management’s responsibilities.