The Board of Directors (“Board”) of Varia Berhad 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 the Board Charter is to ensure that all Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members and the various legislations and regulations affecting their conduct and that the principles and practices of good corporate governance are applied in all their dealings in respect, and on behalf of the Company. The Board Charter sets out the specific responsibilities to be discharged by the Board members collectively, and the individual roles expected from them.
The Board Charter is subject to the provisions of the Company’s Constitution, Companies Act 2016, Main Market Listing Requirements of Bursa Malaysia Securities Berhad, Malaysian Code on Corporate Governance and any amendments thereof as well as other applicable laws or regulatory provisions.
The objective of the Board is to review, approve and contribute to the long-term 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 shall also be structured to protect the interests of shareholders and relevant stakeholders whilst enabling the Company to compete in a challenging market environment.
As set out in the Company’s Constitution, unless otherwise determined by the Company at the general meeting, the number of Directors shall not be less than two (2) and not more than eleven (11) Directors. The Board shall comprise of at least two (2) Directors, of which one-third (1/3) of the Board, whichever is higher are Independent Directors. In the event of any vacancy in the Board, resulting in non-compliance with the requirement, the vacancy must be filled within three (3) months from the date of non-compliance. The Board must also ensure that at least one (1) Director is a woman.
All members of the Board are required to have the necessary qualities, competencies and experience that allow them to perform their duties and carry out the responsibilities required of the position in the most effective manner.
The tenure of an Independent Director shall not exceed a cumulative term of twelve (12) years from the date of first appointment and without further extension.
The composition and size of the Board are reviewed from time to time to ensure its efficiency.
The office of a Director shall become vacant if the Director becomes of unsound mind, bankrupt or is absent from more than 50% of the total Board of Directors' meetings held during a financial year or is convicted by a court of law, whether within or outside of Malaysia.
Each Director shall not hold more than five (5) directorships in listed issuers and shall devote sufficient time and effort to carry out the responsibilities and duties as a Director.
The fit and proper assessment on any person identified to be appointed as a Director or to continue holding the position as a Director of the Company shall be conducted prior to the initial appointment or proposed re-election/re-appointment as a Director. The fit and proper assessment on a Director may also be conducted whenever the Board becomes aware of information that may materially compromise a Director’s fitness and propriety.
The Nomination and Remuneration Committee and the Board, in conducting the fit and proper assessment, shall be guided by the Company’s Directors’ Fit and Proper Policy.
The principal responsibilities of the Board shall include but not limited to the following: -
(a) Reviewing and adopting strategic plans for the Group to support long-term value creation and includes strategies on economic, environmental and social considerations underpinning sustainability.
(b) Overseeing and evaluating the conduct of the Group’s business as well as supervise and assess Management’s performance to determine whether the business is being properly managed.
(c) Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures.
(d) Establish, adopt and review succession planning, including appointing, training, assessing the performance of Directors and Committee members and where appropriate, replacing Directors of the Company.
(e) 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.
(f) To encourage its members to have access to appropriate continuous training and/or education programmes.
(g) To set remuneration at levels which are sufficient to attract and retain Directors needed to run the Company/Group successfully. The responsibilities of Director’s remuneration are discharged to the Board Nomination and Remuneration Committee.
(h) Ensuring the Company’s financial statements are true and fair and conform with the accounting standards and laws.
(i) Review the adequacy and integrity of the management information and internal controls systems of the Group.
(j) Promoting a good corporate culture within the Company and the Group which reinforces ethical, prudent and professional behaviour.
Matters reserved for the Board’s decision and approval and where necessary, to recommend for shareholders’ approval which includes but not limited to the following: -
(a) Strategic plan, business strategy and annual budget.
(b) Capital expenditure, material acquisition and disposals of assets/investments not in the ordinary course of business by the Company and/or its subsidiaries and associated companies.
(c) Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures.
(d) Financial results and financial statements.
(e) Related party transaction and recurrent related party transaction involving related parties of any amount.
(f) Interim dividend and recommendation of final dividend.
(g) Changes in the composition of the Board and Board Committees.
(h) Appointment of external auditors and their fees.
(i) Establishing of long-term share incentive plan.
(j) Announcement to Bursa Malaysia Securities Berhad.
(k) Acquisition of companies/business and merger involving the Company and/or its subsidiaries and associated companies.
(l) Fund raising exercise through capital market undertaken by the Company and/or its subsidiaries and associated companies.
(m) Directors’ fees and remuneration for Directors.
(n) Terms of reference of Board Committees and amendments thereof.
(o) Issuing corporate guarantees and indemnities for the benefits of its subsidiaries.
(p) Debt restructuring plan by the Company and/or its subsidiaries.
(q) Treasury policies and bank mandate.
(r) Discretionary Limits of Authority.
(s) Powers of attorney by the Company.
(t) Constitution of the Company.
(u) Registered office.
(v) Name of Company.
(w) Change of financial year end.
(x) Significant business direction.
(y) Matters requiring the convening of general meeting.
(z) Matters as may be required by law or governing authorities.
(aa) Any other matters recommended by the Board from time to time.
The role of the Chairman and Managing Director 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 Managing Director has the overall responsibility for the day-to-day management of the business, implementation and execution of the Group’s strategies in line with the Board’s direction, policies and decisions, and drives the Group’s business and performance to achieving the Group’s vision and objectives.
The responsibilities of the Chairman, amongst others are as follows:-
(a) Provides leadership to the Board and ensure its effectiveness of all aspects of its role.
(b) The Chairman shall preside at all Board meetings, unless he/she so delegates to another Director with the consent of the Board.
(c) To facilitate the effective contribution of all Directors at Board meetings; the Chairman shall encourage healthy debate on issues being deliberated and bring to the Board objectivity and independence in the deliberation.
(d) To maintain regular dialogues with the Managing Director over all operational matters and shall consult with other Board members on any matter that gives him/her cause for concern.
(e) Maintains an effective communication which enables both the Board and Management to communicate effectively with its shareholders, stakeholders and the public generally.
(f) Ensuring that Executive Directors look beyond their executive function in setting policy framework and strategies to align the business activities driven by the senior management with the Group and monitors its implementation and accept their full share of responsibilities on corporate governance.The Managing Director (“MD”) and/or 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 MD and/or Executive Directors, amongst others are as follows:-
(a) Manage and administer the day-to-day running of business operation within the Group and ensure smooth and effective implementation of the Group’s policies and decisions set by the Board and adhered to by the Management and drives the Group’s business and performance to achieving the Group’s vision and objectives.
(b) To assist the Board in identifying corporate objectives ensuring high management competency as well as the emplacement of an effective management succession plan to sustain continuity of operations of the Group.
(c) To assist the Board in developing and translating the strategies into a set of manageable goals and priorities and setting the overall strategic policy and direction of the business operations, investment and other activities based on effective risk management controls for the Group and make recommendation to the Board and is accountable to the Board for the achievement of the Company/Group’s goals.
(d) To assess business opportunities which are of potential benefit to the Group.
(e) To bring material and other relevant matters to the attention of the Board in an accurate and timely manner.
(f) The MD serves as the chief spokesperson for the Group and attends all Board Committees’ meetings.
(g) To develop and implement communication programmes and dialogues with members, investors, analysts as well as employees, and providing effective leadership to the Group and maintain an effective communication which enables both the Board and Management to communicate effectively with its shareholders, stakeholders and public generally.
(h) Liaise with the Chairman and carries out other duties as directed by the Board as a whole.
(i) Ensuring financial management practice is performed at the highest level of integrity and transparency in reporting to the Board on both financial and non-financial matters for the benefit of the Board members and that the business and affairs are carried out in an ethical manner and in full compliance with the relevant laws and regulations.
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.
The Independent 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 without being subordinated to operational considerations.
The Board may from time to time establish committees as and when considered appropriate to delegate certain powers and duties to the Board Committees, all of which operated within defined terms of reference set by the Board to assist in carrying out its duties and responsibilities. The Board delegates certain functions to the following Board Committees to assist in the execution of its responsibilities:-
11.1 Audit Committee
The Audit Committee assists and support the Board primarily in the area of financial reporting in liaison with the external auditors and assessing the effectiveness of the internal control system.
11.2 Nomination and Remuneration Committee
The Nomination and Remuneration Committee assists the Board on matters relating to the selection and assessment of Directors and assist the Board on matters relating to Directors’ remuneration.
11.3 Sustainability Committee
The Sustainability Committee assists the Board in overseeing the requirements for the Group to conduct its business in a responsible manner in relation to its impact to the economic, environment and social aspect.
11.4 Risk Management Committee
The Risk Management Committee assists the Board in overseeing the risk management process within the Group.
11.5 Share Issuance Scheme (“SIS”) Committee
The SIS Committee is to assist the Board in administering the implementation of the Company’s SIS in accordance with the objectives and rules as stated in the SIS’ by-law.
The Board Committees shall operate under clearly defined terms of reference and are authorised by the Board to deal with and to deliberate on matters delegated to them within their terms of reference.
There shall be transparency and full disclosure from the Board Committees to the Board, except where the Committee has been mandated otherwise by the Board.
The Board shall meet regularly, with due notice of issues to be discussed and ensuring that it maintains effective supervision over appropriate controls and shall record its conclusions in discharging its duties and responsibilities.
The Board shall meet at least four (4) times in a year with additional meetings convened when necessary.
Scheduled Board meetings are structured with a pre-set agendas. 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 meetings proceeding.
The MD leads the presentation of Board papers and provides comprehensive explanation of pertinent issues as well as reporting to the Board on significant changes in the business and external environments which affect risks. The Chief Financial Officer provides the Board with quarterly financial information.
Directors 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 Group.
Where necessary, the services of other senior management or external consultants will be arranged to brief and assist the Directors to clear any doubt or concern to facilitate an informed decision-making process.
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.
The Directors of the Group adopted the Directors’ Code of Ethics (“Code”) as prescribed by the Companies Commission of Malaysia. The Code 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 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.
The Directors are to maintain the highest degree of integrity, professionalism and ethical standards at all times, exercise their powers and authority in good faith and shall act honestly and use reasonable care, skill and diligence in the best interest of the Group.
The Board will operate in a manner reflecting the shared values of the Group and in accordance with the best corporate governance practices, the Constitution, the Companies Act 2016 and all other applicable laws and regulations.
Each Director has a fiduciary and statutory duty not to place himself in a position which gives rise to, or is perceived to give rise to, a real or substantial possibility of conflict, whether it be a conflict of interest or conflict of duties. A Director who has a conflicting interest in a matter involving the Company or the Group shall promptly disclose the nature of his interest to the Board. Board members shall abstain from participating, deliberating and exercising voting rights in matters for which they have a conflict of interest.
The Directors acknowledge that all proceedings of the Board and the Board Committees, and any information and documents in which they have insight during their tenure of office are strictly confidential and will not be disclosed to any person other than the Board members, except as agreed by the Board or as required by law.
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.