The Board of Directors of Merge Energy Berhad (“MEB”) acknowledges the importance of good corporate governance and is committed to ensure that the highest standards of corporate governance are practised throughout the Group.
The purpose of this Board Charter is to regulate how business is to be conducted by the Board in accordance with the principles of good corporate governance. The Board Charter sets out the specific responsibilities to be discharged by the Board members collectively, and the individual roles expected from them.
The objective of the Board is to essentially review, approve and contribute to the longterm strategy of the Group, monitoring of business performance and review of the adequacy and integrity of the Group’s internal control system, by bringing onto the board their experiences knowledge and expertise. A board should also be structured to protect the interests of shareholders and relevant stakeholders whilst enabling the company to compete in a challenging market environment.
The Board should have a balanced composition of Executive and Non-Executive Directors, with one third (1/3) Independent Non-Executive Directors. Collectively, the Board should comprise of members from wide range of business with diverse set of skills and experience which is vital for efficiency, management of the Group’s businesses and the strategies success of the Group.
The Articles of Association of the Company provides for a minimum of two (2) directors and a maximum of eleven (11) directors. The tenure of an Independent Director shall not exceed a cumulative term of 9 years.
The composition and size of the Board are reviewed from time to time to ensure its efficiency.
5.1 Reviewing and adopting strategic plans for the Group and responsible monitoring the implementation by the management;
5.2 Overseeing and evaluating the conduct of the Group’s business;
5.3 Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures;
5.4 Establish succession planning;
5.5 Ensure ethical behavior and compliance with the relevant laws and regulations, audit and accounting principles, and the Group’s own governing documents and codes of conduct which include appropriate communication and feeback channels which facilitate whistleblowing and ensure the compliance of the codes of conduct.
5.6 To encourage its members have access to appropriate continuing training and/or education programmes.
5.7 Appoint a committee of Directors composed, wholly or mainly of Non-Executive Directors, a majority of whom are independent, with the responsibility of proposing new nominees for the Board. The decision as to who shall be nominated should be the responsibility of the full Board after considering the recommendations of such a committee;
5.8 Set remuneration at levels which are sufficient to attract and retain the Directors needed to run the Company/Group successfully. The responsibilities of Director’s remuneration are discharged to the Board Nominating and Remuneration Committee;
5.9 Establish an overall remuneration policy and framework and performance management philosophies for key management positions within the Group;
5.10 Developing and implementing a shareholder communication policy for the Group; this policy should include how feedback received from its stakeholders are considered by the company when making business decisions; and
5.11 Reviewing the adequacy and the integrity of the management information and internal controls systems of the Group.
The role of the Non-Executive Chairman and the Chief Executive Officer are distinct and separate to ensure there is a balance of power and authority. The Chairman is responsible for the leadership, effectiveness, conduct and governance of the Board, while the Chief Executive Officer has overall responsibility for the day-to-day management of the business and implementation of the Board’s policies and decisions.
The responsibilities of the Chairman, amongst others are as follows:
6.1 Provides leadership to the Board and ensure its effectiveness of all aspects of its role;
6.2 The Chairman shall preside at all Board Meetings, unless he so delegates to another Senior Director with the consent of the Board;
6.3 To facilitate the effective contribution of all Directors at Board meetings; the Chairman should encourage a healthy debate on the issue and bring to the Board objectivity and independence in the deliberations;
6.4 To maintain regular dialogue with the Chief Executive Officer over all operational matters and shall consult with the other Board members on any matter that gives him cause for concern;
6.5 Maintains an effective communications policy that enables both the Board and Management to communicate effectively with its shareholders, stakeholders and the public generally; and
6.6 Practices good corporate governance and ensures that Executive Directors look beyond their Executive functions and accept their share of responsibilities of governance.
The Chief Executive Officer and Executive Directors are responsible to ensure due execution of strategic goals, effective operation within the Company and/or Group, and to explain, clarify and inform the Board on matters pertaining to the Company/Group.
The responsibilities of the CEO and/or Executive Directors, amongst others are as follows:
7.1 Supervise and control the general management and operation of the Group;
7.2 Develops and oversees the implementation of corporate strategies for the Group, runs the day-to-day business;
7.3 The CEO is accountable to the Board for the achievement of the Company/ Group’s goals and for the observance of the Management’s limitations;
7.4 To assess business opportunities which are of potential benefit to the Group;
7.5 To bring material and other relevant matters to the attention of the Board in an accurate and timely manner;
7.6 The CEO serves as the chief spokesperson for the Group and attends the Nominating Committee and Remuneration Committee meetings;
7.7 Maintain an effective communications policy that enables both the Board and Management to communicate effectively with its shareholders, stakeholders and the public generally;and
7.8 Liaise with the Chairman and carries out other duties as directed by the Board as a whole.
The Board may from time to time establish Committees as and when 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:
(i) Audit Committee;
(ii) Nominating Committee;
(iii) Remuneration Committee; and
(iv) Risk Management Committee
8.1 The Committees shall operate under clearly defined terms of reference.
8.2 The Committees are authorised by the Board to deal with and to deliberate on matters delegated to them within their terms of reference.
8.3 There shall be transparency and full disclosure from the Board Committee to the Board, except where the Committee has been mandated otherwise by the Board.
The Board should meet regularly, with due notice of issues to be discussed and should record its conclusions.
The Board shall meet at least four (4) times a year with additional meetings convened when necessary.
Scheduled Board meetings are structured with a pre-set agenda. The Board members are provided with Board papers which contain management and financial information and other matters to be discussed prior to the meetings to enable the Directors to obtain further explanations and/or clarifications if necessary, in order to ensure the effectiveness of the proceeding of the meetings.
Board members are required to inform the Board of conflicts or potential conflicts of interest they may have in relation to particular matters of business transacted by the Company and/or the Group.
Where necessary, the services of other senior management or external consultants will be arranged to brief and assist the Directors clear any doubt or concern.
The Directors, collectively or individually, may seek independent professional advice and information in the furtherance of their duties at the Company’s expense, so as to ensure the Directors are able to make independent and informed decisions.
The Directors of the Group adopted the Directors’ Code of Ethics as prescribed by the Companies Commission of Malaysia. The Code of Ethics sets out the requirement for the Directors to observe the code at all times in relation to corporate governance, relationship with shareholders, employees, creditors and customers as well as social responsibility and the environment.
The Board has adopted the Board Charter on 17 December 2013. The Board’s approval is needed for any subsequent amendment to the Charter. The Board Charter will be periodically reviewed and updated in accordance with the needs of the Company/Group and any new regulations that may have impact on the discharge of the Board’s duties and responsibilities.