STATEMENT ON CORPORATE GOVERNANCE
The Board of Directors is pleased to report on the manner
in which the Principles and Best Practices of Corporate
Governance are applied and the extent of compliance
therewith as set out in the Malaysian Code on Corporate
Governance (“the Code”) pursuant to Paragraph 15.26 of the
Listing Requirements of Bursa Malaysia Securities Berhad
throughout the financial year ended 31 December 2008.
A. A. DIRECTORS
The Board
The Company is headed by a Board of Directors which leads
the Company. At the date of this Annual Report, the Board has 6 members comprising a Chief Operating Officer
(“COO”) cum Executive Director, 2 Executive Directors and
3 Non-Executive Directors (including the Chairman) all of
whom are independent.
Together the Directors have wide ranging business and
financial experience.
There is clear
distinction between the role of the Chairman, the COO cum
Executive Director and the 2 Executive Directors. The
Chairman is primarily responsible for the orderly conduct
and effective running of the Board. The COO cum Executive
Director has overall responsibility for the development
and implementation of the Group’s broad strategies and
plans as well as the Group’s business operations and
organizational effectiveness. The 2 Executive Directors
take charge of the management of the Group’s corporate and
financial affairs, accounts and operations.
The Independent
Non-Executive Directors fulfill an independent pivotal
role in corporate accountability. They provide unbiased
and independent views, advice and judgment in ensuring
that the strategies proposed by the Management are fully
discussed and examined taking into account the long term
interest of not only the Group but also of all parties
affected by the Group’s activities. Tan Sri Dato’ Nik
Ibrahim Kamil, the Independent Non-Executive Chairman,
assumes the role of Senior Independent Non-Executive
Director.
The Board explicitly assumes the following specific
responsibilities:-
-
Reviewing and adopting
strategy plans for the Group;
-
Overseeing the conduct of the
Group’s businesses to evaluate whether the businesses are
being properly managed;
-
Identifying principal risks
and ensuring the implementation of appropriate systems to
manage these risks;
-
Reviewing the adequacy and
effectiveness of the Group’s internal control system and
management information system including systems for
compliance with applicable laws, standards, regulations,
rules and guidelines;
-
Determining succession plans
for Senior Management; and
-
Developing and implementing
an appropriate investor relations programme or
shareholders’ communication policy for the Company.
Board Meetings
The Board meets at least 5 times a year with additional
meetings convened when necessary. Meetings are scheduled
early in the year. Due notice is given for all scheduled
meetings and additional meetings. Where appropriate,
decisions are taken by way of circular resolutions during
the period between the scheduled meetings.
During the financial year ended 31 December 2008, the
Board held 5 meetings. The attendance of the Directors at
the Board meetings held are as follows:-
Directors
|
No. of Board meetings attended
|
|
Tan Sri Dato’ Nik Ibrahim Kamil |
5/5
|
Zakaria Merican Bin Osman Merican
|
5/5
|
Mohd Harris Bin Pardi
|
5/5
|
|
Fong Heng Leong |
5/5
|
|
Sak Swee Sang |
5/5
|
Dato’ Yusof Annuar Bin Yaacob*
|
Nil
|
|
Karuppannan A/L Palaniappan** |
Nil
|
Supply of Information
Board papers are
forwarded to all Board members in advance of each meeting.
The agenda for each meeting are accompanied by the minutes
of preceding meetings of the Board and Board Committees,
reports on the Group’s financial performance and relevant
proposal papers (if any).
In addition, the Board has a Schedule of Matters reserved
specifically for its deliberation and decision which
includes the approval of strategic plan, acquisitions or
disposals of investments, major corporate proposals,
annual and quarterly financial results, key financial and
operating policies, significant capital or operating
expenditures and related party transactions.
Senior Management staff as well as advisers and
professionals appointed to act for the Company on
corporate proposals to be undertaken by the Company are
invited to attend Board meetings to furnish the Board with
their views and explanations on proposals tabled to the
Board and to provide clarification on issues that may be
raised by any Director.
All information within the Group are
accessible to the Directors in furtherance
of their duties as Directors and all
Directors have access to the services of the Company
Secretary.
Should the need arise, each Director has the right at the
Company’s expense to seek external independent legal and
other professional advice concerning any aspect of the
Group’s operations or undertakings in order to fulfill
their duties and responsibilities as Directors of the
Company.
Appointments to the Board and Re-election
The Company has in place a formal procedure for the
appointment of new Directors. All new candidates to the
Board are first reviewed and considered by the Nomination
Committee before making a recommendation to the Board for
appointment.
The Company’s Articles of Association provide that all
Directors shall retire from office once at least in each 2
years but shall be eligible for re-election. The Articles
also provides that all newly appointed Directors shall
hold office until the next Annual General Meeting and
shall be eligible for re-election.
Directors’ Training and Education
On joining, all new Directors are given background
information describing the Company and its activities.
Site visits are arranged whenever necessary.
The Directors do attend and participate in programmes and
forums, from time to time, relating to risk management,
leadership and governance as well as changes to laws and
regulations.
Directors’ Remuneration
The
Remuneration Committee is entrusted with the role of
recommending suitable policies in respect of salary
packages for the Executive Directors. The current salary
packages comprise a combination of basic salary and a
variable performance incentive.
All Directors
are paid a meeting allowance for attendance at each Board
and Board Committee meetings. All Non-Executive Directors
are paid Directors’ fees. These fees are recommended by
the Remuneration Committee and submitted to the Board for
endorsements. These Directors’ fees to be paid for any 1
year are submitted for shareholders’ approval at the
Annual General Meeting.
The aggregate
Directors’ remuneration paid to the Directors of the
Company for the financial year ended 31 December 2008 are
disclosed in the financial statements.
B. BOARD COMMITTEES
The Board has
delegated specific functions and responsibilities to 3
Board Committees, namely the Audit Committee, the
Nomination Committee and the Remuneration Committee in
discharging its duties. These Committees examine specific
issues and report to the Board with their recommendations.
The ultimate responsibility for decision making lies with
the Board.
Audit Committee
The Audit Committee currently comprises 3 Independent
Non-Executive Directors. The terms of reference and a
summary of the activities of the Audit Committee for the
financial year ended 31 December 2008 are set out in the
Audit Committee’s Report of the Annual Report 2008.
Nomination Committee and Remuneration Committee
The Nomination Committee is responsible for making
recommendations to the Board on all new Board and Board
Committee appointments.
The
Remuneration Committee is responsible for recommending to
the Board a framework of remuneration for the Directors
and the Executive Directors which is submitted to the
whole Board for endorsement. The Remuneration Committee
reviews and approves recommendations on remuneration
policies and packages for Directors in the interest of
improved corporate performance.
C. SHAREHOLDERS
Communication with Shareholders and Investors
The Company recognises the importance of communications
with its shareholders. It achieves this by way of
communication channels such as announcements through Bursa
Malaysia Securities Berhad, circulars, press releases,
Annual Reports as well as through its general meetings.
Through such channels, the Company is able to provide an
overview of the Group’s performance and operation and to
disclose material information.
In addition, the Company has a website,
www.ocbb.com.my which provides an avenue for
information to shareholders and investors at large.
The Annual
General Meeting (“AGM”) remains the principal forum for
dialogue with shareholders where they are accorded the
opportunity to raise questions on the agenda items of the
AGM. The Chief Operating Officer and Executive Directors
and where appropriate, the Chairman of the Board, are
available to respond to shareholders’ queries during the
Meeting.
D.
D.
Accountability and Audit
Financial Reporting
In presenting the quarterly and annual financial
statements to shareholders and investors, the Board aims
to present a balanced, clear and meaningful assessment of
the Group’s financial position, performance and
prospects. The Audit Committee assists in reviewing the
information disclosed to ensure accuracy and adequacy.
Internal Control System
The Board acknowledges its responsibilities for the
Group’s system of internal control covering not only
financial controls but also operational and compliance
controls as well as risk management. The internal control
system involves each business and key management from each
business. It should be noted that the system can only
provide reasonable, and not absolute, assurance against
material misstatement or loss.
The Group engages an external independent firm of
professionals to provide the Audit Committee and the Board
independent and objective reports on the Group’s
management, records, accounting policies and controls. The
scope of its internal audit function includes evaluation
of the processes by which risks are identified, assessed
and managed and assurance that controls which are
implemented are appropriate and can effectively address
acceptable risk exposures. The internal audit also ensures
that recommendations to improve controls are followed
through by the Management.
Relationship with the External Auditors
The Board has established formal and transparent
arrangements to maintain an objective and professional
relationship with the Company’s External Auditors, Messrs SJ Grant Thornton, in seeking its professional advice and
ensuring compliance by the Company with the applicable
accounting standards in Malaysia as well as the auditors’
professional requirements.
Messrs SJ Grant Thornton reports to the shareholders of
the Company on its opinion which are included as part of
the Group’s financial reports with respect to their audit
on each year’s statutory financial statements.
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