Board Charter

1. Introduction

The Board of Directors of Varia Berhad, formerly known as Stella Holdings Berhad, recognizes the critical significance of exemplary corporate governance. We are steadfast in our commitment to uphold and implement the utmost standards of corporate governance across the Group, ensuring transparency, accountability, and integrity in all our operations.

2. Purpose of the Board Charter

This Board Charter is established to guide the conduct of the Board's business activities, ensuring adherence to the highest standards of corporate governance. It delineates the collective duties of the Board members and clarifies the distinct roles and responsibilities expected of each member, fostering an environment of accountability and integrity in the stewardship of the company.

3. Objectives of the Board

The primary objective of the Board is to rigorously evaluate, endorse, and enhance the Group's long-term strategic direction. This involves vigilant oversight of business performance and a thorough assessment of the Group's internal control systems to ensure their adequacy and integrity. Board members are expected to contribute their vast experiences, insights, and expertise towards these ends. Additionally, the Board's composition should safeguard shareholder and stakeholder interests, while equipping the Group to navigate and thrive in competitive market conditions.

4. Composition

The Board of Varia Berhad is structured to maintain a balanced mix of Executive and Non-Executive Directors, including a minimum of one third Independent Non-Executive Directors. This diverse composition ensures a broad spectrum of expertise and experience, essential for the effective governance and strategic direction of the Group.

In accordance with the Group's Constitution, the Board shall consist of no fewer than two (2) and no more than eleven (11) Directors, facilitating optimal decision-making and management oversight.

The tenure of an Independent Director is capped at a cumulative term of nine (9) years, unless an extension is sanctioned by the shareholders. Beyond this period, an Independent Director may either be re-designated as a Non-Independent Director or continue in their independent capacity with shareholder approval.

The Board's composition and size are periodically evaluated to guarantee its continued efficacy in meeting the Group's objectives.

5. Duties and responsibilities of the Board

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 behaviour 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 feedback channels which facilitate whistleblowing and ensure the compliance of the codes of conduct.
5.6 To encourage its members to 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 Remuneration Committee;
5.9 Establish an overall remuneration policy and framework and performance management philosophies for key management positions within the Group;
5.10 Ensure the Company’s financial statements are true and fair and conform with the laws; and
5.11 Reviewing the adequacy and the integrity of the management information and internal controls systems of the Group.

6. Matters Reserved for the Board

There is a schedule of matters reserved specifically for the Board’s decision and approval which includes:-

(i) Strategic plan
(ii) Material acquisition and disposals of assets not in the ordinary course of business
(iii) Investment in projects requiring major capital investment
(iv) Financial results and financial statements
(v) Related party transaction of a material nature
(vi) Dividend recommendations
(vii) Changes in the composition of the Board and Board Committees
(viii) Appointment of external auditors and their fees
(ix) Establishing of long-term share incentive plans
(x) Any other specific matters nominated by the Board from time to time

7. Chairman of the Board

Varia Berhad adheres to a clear separation of roles between the Chairman and the Chief Executive Officer (CEO) to ensure a balanced distribution of power and authority within the Group. The Chairman's primary responsibilities include leading the Board, enhancing its effectiveness, overseeing its conduct, and ensuring robust governance practices are in place. Conversely, the CEO is tasked with the comprehensive management of the Group's daily operations and the execution of policies and decisions as determined by the Board.

The responsibilities of the Chairman, amongst others are as follows:-
7.1 Provides leadership to the Board and ensure its effectiveness of all aspects of its role;
7.2 The Chairman shall preside at all Board Meetings, unless he/she so delegates to another Senior Director with the consent of the Board;
7.3 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;
7.4 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/her cause for concern;
7.5 Maintains an effective communications which enables both the Board and Management to communicate effectively with its shareholders, stakeholders and the public generally; and
7.6 Practices good corporate governance and ensures that Executive Directors look beyond their Executive functions and accept their share of responsibilities of governance.

8. Chief Executive Officer and/or Executive Directors

The Chief Executive Officer (CEO) and Executive Directors of Varia Berhad play pivotal roles in the execution of the Group's strategic objectives and ensuring the smooth operation of its business activities. Their key responsibilities include providing comprehensive updates, clarifications, and insights on various matters concerning the Group to the Board. The duties of the CEO and Executive Directors encompass, but are not limited to, the following:
8.1 Supervise and control the general management and operation of the Group;
8.2 Develops and oversees the implementation of corporate strategies for the Group, runs the day-to-day business;
8.3 The CEO is accountable to the Board for the achievement of the Company/Group’s goals and for the observance of the Management’s limitation;
8.4 To assess business opportunities which are of potential benefit to the Group;
8.5 To bring material and other relevant matters to the attention of the Board in an accurate and timely manner;
8.6 The CEO serves as the chief spokesperson for the Group and attends the Nomination Committee and Remuneration Committee meetings;
8.7 Maintain an effective communications which enables both the Board and Management to communicate effectively with its shareholders, stakeholders and public generally; and
8.8 Liaise with the Chairman and carries out other duties as directed by the Board as a whole.

9. Senior Independent Non-Executive Director

The Senior Independent Non-Executive Director serves as a designated contact to whom concerns pertaining to the Group may be conveyed by the shareholders and other stakeholders.

10. Non-Executive Director

The Non-Executive Directors perform a key role by contributing and providing unbiased and independent views, advice and judgment, which take into account the interests of the Group and all its stakeholders including shareholders, employees, customers, business associates and the community as a whole.

11. Board Committee

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
The Audit Committee assists and support the Board primarily in the area of financial reporting in liaison with the external auditors and the Group’s system of risk management and internal control in liaison with the internal auditors .

(ii) Nomination Committee
The Nomination Committee assists the Board on matters relating to the selection and assessment of Directors.

(iii) Remuneration Committee
The Remuneration Committee assists the Board on matters relating to the remuneration of Directors.

(iv) Risk Management Committee
The Risk Management Committee assists the Board in overseeing the risk management process within the Group.

11.1 The Committees shall operate under clearly defined terms of reference.
11.2 The Committees are authorised by the Board to deal with and to deliberate on matters delegated to them within their terms of reference.
11.3 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.

12. Meetings

To ensure effective governance, the Board of Varia Berhad convenes regularly, adhering to a structured schedule that facilitates thorough discussion and resolution of pertinent issues. The Board is mandated to meet a minimum of four (4) times annually, with provisions for additional meetings as circumstances warrant.

Preparation for these meetings involves a meticulously planned agenda and the distribution of comprehensive Board papers in advance. These documents provide essential management and financial insights, among other topics, allowing Directors to request further information or clarification as needed to enhance the deliberative process.

Directors are obligated to disclose any actual or potential conflicts of interest related to the Group's business dealings to maintain transparency and integrity in Board proceedings.

Furthermore, the expertise of senior management or external consultants may be sought to provide detailed briefings or to address any uncertainties or concerns Directors may have, ensuring informed decision-making.

13. Access to Information and Independent Advice

The Directors, collectively or individually, may seek independent professional advice and information in the furtherance of their duties at the Company’s expenses, so as to ensure the Directors are able to make independent and informed decisions.

14. Code of Ethics and Conduct

The Directors of Varia Berhad are committed to the highest ethical standards, as outlined in the Director's Code of Ethics established by the Companies Commission of Malaysia. This comprehensive Code mandates Directors to uphold principles of integrity and accountability in all aspects of corporate governance. It emphasizes the importance of fostering positive relations with shareholders, employees, creditors, and customers, while also advocating for social responsibility and environmental stewardship. The Directors are expected to adhere to these principles consistently, ensuring that their conduct reflects the Group's dedication to ethical business practices.

15. Review of the Board 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.