Statement On
Corporate Governance

The Board of Directors (the “Board”) is committed to implementing and maintaining high standards of corporate governance in promoting transparency, accountability and integrity to enhance stockholders' value. As such, the Board strives to adopt the substance behind corporate governance prescriptions and not merely the form.

The Board is pleased to provide the following Statement, which sets out how the Company has applied the Principles and Recommendations as promulgated by the Malaysian Code on Corporate Governance 2012 (the “MCCG 2012”) during the financial year under review following the release of the MCCG 2012 by the Securities Commission in late March 2012. Nonobservation of specific Recommendation of the MCCG 2012 during the financial year, including the reasons thereof and alternative practice, if any, is included in this Statement.


Duties and Responsibilities of the Board

The Board recognises the vital role played by the Board in the stewardship of its direction and operations, and ultimately
the enhancement of long-term stockholders' value. To fulfil its role, the Board has assumed and established the following
responsibilities in discharging its fiduciary and leadership functions:

  • reviewing and adopting a strategic plan for the Group to ensure sustainability of its business as the Board brings objectivity and breadth of judgement to the Group’s operations;
  • overseeing the conduct of the Group’s businesses and performance of Management to determine whether or not its businesses are being properly managed; identifying principal risks for the Company and its subsidiaries and ensuring the implementation of appropriate internal controls and mitigating measures to address such risks;
  • succession planning, including appointing, training, fixing the compensation of and, where appropriate, replacing members of the Board and Senior Management;
  • overseeing the development and implementation of a stockholder communications policy for the Company; and 
  • reviewing the adequacy and integrity of the Group’s risk management and internal control system.

To assist in the discharge of its stewardship role, the Board has established Board Committees, namely, the Executive Committee, Audit Committee, Remuneration Committee, Nominating Committee and Risk Management Committee, to oversee matters within their specific terms of reference as approved by the Board and report to the Board on key issues deliberated at their respective meetings. The ultimate responsibility for decision making, however, lies with the Board.

In early 2016, Executive Committee deliberated on the strategic plan and annual budget of each business segment presented by respective Executive Directors and Senior Management personnel, before they were consolidated into Group budget for the Board’s further review and approval. On a quarterly basis, the actual performances were analysed by the Executive Committee and presented to the Board. Where required, the Senior Management personnel were invited to brief the Board on the implementation of the strategic plan.

Board Charter

To enhance accountability, the Board has established clear functions reserved for the Board and those delegated to Management. There is a formal schedule of matters reserved to the Board for its deliberation and decision to ensure that direction and control of the Company are in its hands. Key matters reserved for the Board include setting the overall Group strategy and direction, approving acquisitions and divestitures, annual operating and capital budgets, quarterly and annual financial statements for announcement as well as monitoring of financial and operating performance of the Group. Whilst the Board is responsible for creating the framework and policies within which the Group should be operating, is responsible for instituting measures on compliance with laws, regulations, rules, directives and guidelines, including the achievement of the Group’s corporate objectives. Such delineation of roles is clearly set out in the Board Charter which serves as a reference point for Board activities and reinforces the supervisory role of the Board.

In early 2013, the Board revised its Board Charter to take into account the Recommendations promulgated by the MCCG 2012 and changes to the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa”). The Board Charter was further updated in 2015 and is reviewed periodically and updated in accordance with the needs of the Company and the updated Board Charter is published on the corporate website.

Code of Ethics and Whistle Blowing Policy

The Board has also formalised, in writing, a Code of Ethics in early 2013, setting out the standards of ethics and conduct expected from Directors and employees to uphold good corporate behaviour. To complement the Code of Ethics, the Company’s existing whistle blowing policy was also enhanced accordingly to outline when, how and to whom a concern may be properly raised about the actual or potential corporate fraud or breach of ethics involving employee, Management or Director in the Group. All concerns reported by the whistle blower are made to the Chairman of the Audit Committee according to the form and specific conditions prescribed under the policy. The identity of the whistle blower is kept confidential and protection is accorded to the whistle blower against any form of reprisal or retribution.

The Board recognises the importance on adherence to the Code of Ethics by all personnel in the Group and short briefings were conducted to key management personnel further to the updates made to Code of Ethics in 2015. The Code of Ethics has also been translated into Bahasa Malaysia language which will further improve the communication and effective dissemination to all levels of staff.

The summary of the Code of Ethics and Whistle Blowing Policy are published on the corporate website.

Sustainability of Business

The Board is aware of the importance of business sustainability and has embedded its Sustainability Policy in developing its corporate strategies with the impact on the environmental, social and governance aspects taken into consideration. As for the Group’s summary activities on Sustainability Statement for the year under review, they are disclosed on pages 54 to 55 of this Annual Report. Full disclosure of OHB’s sustainability initiatives can be found in OHB’s Sustainability Report 2016, which is available on corporate website.

Supply of and Access to Information

The Board is supplied with relevant information and reports on financial, operational, corporate, regulatory, business development and audit matters, by way of Board reports or upon specific requests, for informed decision making and effective discharge of Board’s responsibilities.

Procedures have been established for timely dissemination of Board and Board Committees papers to all Directors at least seven (7) days prior to the Board and Board Committees meetings, in order to allow timely disseminate of information and to deal with matters arising from such meetings. Senior Management of the Group and external advisors are invited to attend Board and Board Committees meetings to provide additional insights and professional views, advice and explanations on specific items on the meeting agenda. Besides direct access to Management, Directors may obtain independent professional advice at the Company’s expense, if considered necessary, in accordance with established procedures set out in the Board Charter in furtherance of their duties.

Directors have unrestricted access to the advice and services of the Company Secretaries to enable them to discharge their duties effectively. The Board is regularly updated and advised by the Company Secretaries who are qualified, experienced and competent on new statutory and regulatory requirements, and the resultant implications to the Company and Directors in relation to their duties and responsibilities. The Company Secretaries, who oversee adherence with Board policies and procedures, brief the Board on the proposed contents and timing of material announcements to be made to regulators. The Company Secretaries also serve notices to the Directors and Principal Officers on the closed periods for trading in Oriental Holdings Berhad shares, in accordance with the prescribed requirement pursuant to Chapter 14 of the Bursa Malaysia Main Market Listing Requirements.

The Company Secretaries attend all Board and Board Committees meetings and ensure that meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are taken and maintained accordingly. The removal of Company Secretaries, if any, is a matter for the Board, as a whole, to decide. The Company Secretaries work closely with the Management to ensure that there are timely and appropriate information flows within and to the Board and Board Committees, and between the Non-Executive Directors and Management.


Board Composition and Balance

At the date of this Statement, the Board consists of ten (10) members, comprising five (5) Executive Directors and five (5) Non-Executive Directors, three (3) of whom are Independent. This composition fulfils the requirements as set out under the Listing Requirements of Bursa, which stipulate that at least two (2) Directors or one-third of the Board, whichever is higher, must be Independent. The profile of each Director is set out under Profile of Directors/Key Senior Management in this Annual Report.

Nominating Committee

The Company has a Nominating Committee, which comprises wholly Non-Executive Directors, with a majority being Independent. At the date of this Statement, the members are as follows:


  • Mary Geraldine Phipps – appointed on 29 April 2010
    Independent Non-Executive Director


  • Sharifah Intan binti S.M. Aidid – appointed on 28 May 2007
    Non-Independent Non-Executive Director
  • Dato’ Ghazi bin Ishak – appointed on 24 February 2011
    Independent Non-Executive Director
  • Lee Kean Teong – appointed on 26 May 2015
    Independent Non-Executive Director
The Nominating Committee was formed by the Board with specific terms of reference to recommend to the Board the candidature of Directors, oversee assessment of the Board, committees as well as individual Directors, appoint Directors to Board Committees and review the Board’s succession plans as well as training programmes.

Appointment and Induction

In discharging its responsibilities, the Nominating Committee has developed the criteria for use in the recruitment of Directors. In evaluating the suitability of candidates, the Nominating Committee considers, inter- alia, the competency, experience, commitment (including time commitment), contribution and integrity of the candidates, including, where appropriate, the criteria on assessing the independence of candidates’ appointment as Independent Non-Executive Directors.

Selection of candidates to be considered for appointment as Directors is facilitated through recommendations from the Directors, Management or external parties including the Company’s contacts in related industries and finance, legal as well as accounting professions. The Nominating Committee, where necessary, meets with the shortlisted candidates to assess their suitability before formally considering and recommending them for appointment to the Board.

Following the appointment of new Directors to the Board, the Committee, along with the Chairman, Group Managing Directors and other Executive Directors ensure that an induction programme is arranged to enable them to have a full understanding of the nature of the business, current issues within the Group and corporate strategies as well as the structure and management of the Group.

Annual Assessment and Board Diversity

The Board strongly advocates board diversity as a truly diversified Board has the prospects of achieving greater effectiveness, creativity and capacity to thrive in a challenging and uncertain business environment. Hence, the Board takes into consideration and aims to make good use of the differences in the skills, regional and industry experience, background, race, gender and other qualities of its Directors. The evaluation of the suitability of candidates is based on the candidates’ competency, character, time commitment, integrity and experience in meeting the needs of the Company.

The Committee reviews annually the required mix of skills and experience of Directors to enhance board diversity. This is achieved through the use of questionnaire for Directors to assess the effectiveness and contribution of the Board as a whole, the Board Committees and each individual Director. The effectiveness of the Board is assessed in the areas of Board size, mix and composition, conduct of Board meeting, Boardroom activities and Directors’ skill set matrix. The effectiveness of the Board Committees is assessed in terms of composition, skills and competencies, meeting administration and conduct as well as roles and responsibilities. For individual Director, the assessment involves a self and peer review where Directors assess their own and also their fellow Directors’ performance on their contribution and competencies such as ability to give constructive input, demonstration of objectivity and a high level of professionalism and integrity in the decision making process, offer practical and realistic advice to the Board and/or Committee discussions at the meetings.

The annual performance evaluation process is outsourced to consultant. The overall outcome from the assessment and comments by all Directors are summarised and reported at a Board Meeting via the outsourced consultant for continuous improvements of the Board, Board Committees and Directors.

The Board does not have a specific policy on setting targets for the number of women directors as the Board comprises three (3) women directors out of ten (10) Directors since 2009. The Board has already achieved the gender diversity target set by the Government in 2011 to have at least 30% women representation on the boards of public listed companies by 2016.

Re-election of Directors

The Company’s Articles of Association provide that at least one-third of the Board is subject to retirement by rotation at each Annual General Meeting. The Directors to retire in each year are those who have been longest in office since their appointment or reappointment. All Directors are required to submit themselves for re-election at regular intervals and at least every three (3) years.

The Board is satisfied with its current composition which comprises a balanced mix of skills, knowledge and experience in the business and management fields which are relevant to enable the Board to carry out its responsibilities in an effective and efficient manner.

Remuneration Committee – Directors’ Remuneration

The Remuneration Committee, established by the Board, is responsible for setting a formal and transparent remuneration framework for Executive Directors and recommending the same to the Board so as to ensure that the Group is able to attract, motivate and retain its Executive Directors needed to run the Group successfully and deliver sustainable returns to shareholders. The remuneration package comprised fixed and performance linked elements with the latter structured so as to link rewards to financial performance of the Group for that relevant financial year. In the case of Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by the individual Non-Executive Director concerned.

The Remuneration Committee comprises wholly Non-Executive Directors, with a majority being independent. As at the date of this Statement, the composition is as follows:


  • Dato’ Ghazi bin Ishak – appointed on 28 February 2013
    Independent Non-Executive Director


  • Sharifah Intan binti S.M. Aidid – appointed on 29 April 2009
    Non-Independent Non-Executive Director
  • Mary Geraldine Phipps – appointed on 19 November 2009
    Independent Non-Executive Director
  • Lee Kean Teong – appointed on 26 May 2015
    Independent Non-Executive Director

During the year under review, the Remuneration Committee met three times and the activities undertaken were as follows:
(a) Discussed and recommended to the Board for approval, the remuneration package for the Executive Directors; and
(b) Discussed on issues related to human resource practices.

Remuneration Package for Executive Directors
The remuneration of Executive Directors is structured to ensure the rewards are linked to their performance and contributions to the Group’s growth and profitability in order to align the interest of the Directors with those of shareholders. The Committee also considered the extent of responsibilities undertaken by the individual Executive Director and their respective contribution to the effective functioning of the Board in arriving at their level of remuneration. None of the Executive Directors participated in any way in determining their individual remuneration.

Remuneration Package for Non-Executive Directors
As for Non-Executive Directors, their level of remuneration reflects the experience, time commitment and scope of responsibilities undertaken by the said Directors as well as the onerous challenges in discharging their fiduciary duties.

Fees and Allowances
All Directors are paid an annual director fees of RM90,000 each for serving as members of the Board. All Directors are also paid meeting allowance for each meeting attended. In recognition of the additional time and commitment required, the Directors also received annual allowances arising from their participation on various board committees.

The various allowances for the Directors as approved by the Board is set out as follows:

During the financial year under review, the Remuneration Committee reviewed and recommended to the Board, the remuneration for all Executive Directors of the Company. The Board, as a whole, approves the remuneration of Non-Executive Directors with the Directors concerned abstaining from the decision in respect of their individual remuneration and recommends Directors’ fees and allowances as afore described for stockholders’ approval at the forthcoming Annual General Meeting.

Details of Directors' remuneration for the financial year ended 31 December 2016 are as follows:

#Other emoluments included allowances as afore-described.

The number of Directors in each remuneration band is as follows:

*Included herein is a former Non-Executive Director who received remuneration in the band of RM0 – RM50,000 and an Alternate Director who did not receive any remuneration.


Directors’ Independence

There is a clear division of responsibilities amongst the Executive Chairman, Group Managing Directors and Executive Directors to embed accountability and facilitate the division of responsibility, such that no one individual has unfettered powers over decision making. The Chairman is responsible for ensuring the adequacy and effectiveness of the Board’s governance process and acts as a facilitator at Board meetings to ensure that contributions by Directors are forthcoming on matters being deliberated and that no Board member dominates discussion. All Executive Directors, supported by the Management team, implement the Group’s strategic plan, policies and decisions adopted by the Board, and oversee the operations and business development of the Group.

Recommendation 3.5 of the MCCG 2012 provides that the Board must comprise a majority of Independent Directors where the Chairman of the Board is not an Independent Director. The existing composition of the Board is such that Independent Directors do not form a majority. The Board believes that the interests of shareholders are best served by a Chairman who is sanctioned by shareholders and who acts in the best interests of shareholders as a whole. As the Chairman has a significant relevant interest in the Group, he is well placed to act on behalf of shareholders and in their best interests. The Board also believes that the current Directors have a balanced mix of skills, experience, expertise and competency to bring the Group forward while discussions are always carried out with candour and vigour, allowing all Directors to express their opinions regardless of their position. Moreover, the Directors are professionals in their own rights and are recognisable public figures who exercise objectivity in making decisions for the benefit of the Group.

The Independent Non-Executive Directors bring to bear objective and independent views, advice and judgement on interests, not only of the Group, but also of shareholders, employees, customers, suppliers and the many communities in which the Group conducts its business. Independent Non-Executive Directors are essential for protecting the interests of shareholders and can make significant contributions to the Company’s decision making by bringing in the quality of detached impartiality.

In early 2016, the Board assessed the independence of its Independent Non-Executive Directors based on criteria set out under the Listing Requirements of Bursa Securities and adopted by the Nominating Committee. In addition, each Independent Non-Executive Director will submit an annual declaration for the independent criteria under the peer review.

The Board is satisfied with the level of independence demonstrated by all the Independent Non-Executive Directors and their ability to act in the best interests of the Company and bringing independent and professional judgement during deliberations at Board meetings.

The Board Charter was revised to restrict the tenure of an Independent Director to a cumulative term of nine (9) years. However, an Independent Director may continue to serve the Board upon reaching the 9-year limit subject to the Independent Director’s re-designation as a Non-Independent Non-Executive Director. In the event the Board intends to retain the Director as Independent after the latter has served a cumulative term of nine (9) years, the Board shall justify the decision and seek stockholders’ approval at general meeting. In justifying the decision, the Nominating Committee is entrusted to assess the candidate’s suitability to continue as an Independent Non-Executive Director based on the criteria on independence.


Board and Board Committees Attendance

The Board ordinarily meets at least four (4) times a year, scheduled well in advance before the end of the preceding financial year to facilitate the Directors in planning their meeting schedule for the year. Additional meetings are convened when urgent and important decisions need to be made between scheduled meetings. Board and Board Committee papers are prepared by Management which provides the relevant facts and analysis for the convenience of Directors. The agenda, the relevant reports and Board papers are furnished to Directors and Board Committee members in advance to allow the Directors sufficient time to peruse for effective discussion and decision making during meetings. At the quarterly Board meetings, the Board reviews the business performance of the Group and discusses major operational and financial issues. The Chairman of each Board Committee informs the Directors at each Board meetings of any salient matters noted during the respective Committee’s meetings which require the Board’s notice or direction. All pertinent issues discussed at Board meetings in arriving at the decisions and conclusions are properly recorded by the Company Secretaries by way of minutes of meetings.

During the financial year under review, the Board met on five (5) occasions. Details of Directors’ attendance for Board and Board Committees meetings are as follows:

BOD Board of Directors  NC Nominating Committee 
EXCO Executive Committee  RC Remuneration Committee
AC Audit Committee  RMC  Risk Management Committee 

It is the policy of the Company for Directors to devote sufficient time and efforts to carry out their responsibilities. The Board obtains this commitment from Directors at the time of appointment. It is also the Board’s policy for Directors to notify the Chairman before accepting any new directorships notwithstanding that the Listing Requirements allow a Director to sit on the boards of not more than five (5) listed issuers. Such notification is expected to include an indication of time that will be spent on the new appointment.

Directors’ Training

The Board, via the Nominating Committee, continues to identify appropriate briefings, seminars, conferences and courses to be attended by Board members to keep abreast of changes in legislations and regulations affecting the Group.

All Directors, including Alternate Directors, have completed the Mandatory Accreditation Programme ("MAP"). During the financial year under review, all Directors attended development and training programmes as well as conferences in areas of finance, corporate governance and regulatory developments.

All Directors attended the following training during the year except for Ms Tan Kheng Hwee:

  • Amendments to the Main Market Listing Requirements of Bursa Malaysia Securities Berhad & Updates on Company Bill 2015
  • MFRS 136 Impairment of Assets

Additional training attended by the Directors during the year are as below:

In addition, the Company Secretaries circulate the relevant guidelines on statutory and regulatory requirements from time to time for the Board’s reference and brief the Board on these updates at Board meetings. The External Auditors also briefed the Board members on any changes to the Malaysian Financial Reporting Standards that affect the Group’s financial statements during the year.


Compliance with financial reporting standards

The Board is responsible for ensuring that the financial statements give a true and fair view of the state of affairs of the Group and of the Company as at the end of the financial year. This includes the results and cash flows of the Group and Company for the year then ended. The Board has established an Audit Committee, comprising exclusively Non-Executive Directors, majority of whom are Independent, to ensure that the financial statements of the Group and Company comply with applicable approved Financial Reporting Standards issued by the Malaysian Accounting Standards Board and the provisions of the Companies Act 2016. The composition of the Committee is set out under Audit Committee Report in this Annual Report whereas its roles and responsibilities are set out under the Terms of Reference of the Audit Committee which is published on the corporate website.

Relationship with External Auditors

The Board upholds the integrity of financial reporting by the Company. In assessing the suitability and independence of the External Auditors, the Board, via the Audit Committee, had, in early 2013, formalised policy and procedures on the types of non-audit services that may be provided by the External Auditors, including the thresholds and procedures that need to be observed should the External Auditors be contracted to provide the non-audit services.

The Board, via the Audit Committee, undertook an assessment of suitability and independence of the external auditors through a performance and independence checklist. The checklist included inter-alia, the external auditors’ quality processes/performance, independence and objectivity, audit scope and planning and audit communications. The external auditors have confirmed, via written declaration, to the Board that they are, and have been independent throughout the conduct of audit engagement in accordance with the terms of relevant professional and regulatory requirements.


Risk Management

Recognising the importance of risk management, the Board has, in past years, formalised a structured Enterprise Risk Management framework to identify, evaluate, control, monitor and report the principal business risks faced by the Group on an ongoing basis.

The Company has established a Risk Management Committee to review and recommend the risk management policies and strategies for the Group as well as assisting the Board to fulfil its risk management and statutory responsibilities in order to manage the overall risk exposure of the Group. At the date of this Statement, the members of the Committee are as follows:


  • Mary Geraldine Phipps – appointed on 30 November 2010
    Independent Non-Executive Director


  • Dato’ Robert Wong Lum Kong, DSSA, JP – appointed on 20 May 2002
    Group Managing Director
  • Dato’ Seri Lim Su Tong – appointed on 20 May 2002
    Group Managing Director
  • Tan Kheng Hwee – appointed on 20 May 2002
    Executive Director
  • Wong Tet Look – appointed on 20 May 2002
    Group Chief Financial Officer
  • Datuk Lok Kian Chong – appointed on 10 April 2017

Executive Chairman

The key features of the Enterprise Risk Management framework, including the internal control system to address risk identified are set out in the Risk Management and Internal Control Statement in this Annual Report.

Internal Audit

In line with the MCCG 2012 and the Listing Requirements of Bursa, the Board has established an independent internal audit function that reports directly to the Audit Committee. Details of the work conducted by the internal audit function are disclosed in the Audit Committee Report and Risk Management and Internal Control respectively in this Annual Report.


Corporate Disclosure

The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures relating to the Company and its subsidiaries to the regulators, stockholders and stakeholders. In early 2013, the Board has formalised pertinent corporate disclosure policies not only to comply with the disclosure requirements as stipulated in the Listing Requirements of Bursa Securities, but also setting out the persons authorised and responsible to approve and disclose material information to stockholders and stakeholders.

To augment the process of disclosure, the Board has established a dedicated section for corporate governance under the Investor Relations heading on the Company’s website.


Shareholder participation at general meeting

The Annual General Meeting (“AGM”), which is the principal forum for shareholder dialogue, allows stockholders to review the Group’s performance via the Company’s Annual Report and pose questions to the Board for clarification. At the AGM, stockholders participate in deliberating on resolutions being proposed or on the Group’s operations in general. During the last AGM, a question & answer session was held where the Chairman invited stockholders to raise questions with responses from the Board.

The Notice of AGM is circulated at least twenty one (21) days prior to the date of the meeting to enable stockholders to go through the Annual Report and papers supporting the resolutions proposed. Stockholders are invited to ask questions both about the resolutions being proposed before putting a resolution to vote as well as matters relating to the Group’s operations in general. All the resolutions set out in the Notice of the 54th AGM were put to vote by show of hands and duly passed. The outcome of the AGM was announced to Bursa Securities on the same meeting day. In line with the recent amendments to the Main Market Listing Requirements of Bursa Securities, the Company will implement poll voting for all the resolutions set out in the Notice of AGM. In addition, the Company will appoint one (1) scrutineer to validate the votes cast at the AGM.

During the last AGM, the Executive Chairman provided stockholders with a brief review of the Group’s operations for the financial year while the Group Chief Financial Officer also shared with stockholders at the meeting responses to questions submitted in advance by the Minority Shareholder Watchdog Group.

Effective communication with shareholders

The Company recognises the importance of being transparent and accountable to its investors and, as such, has maintained an active and constructive communication policy that enables the Board and Management to communicate effectively with investors, financial community and the public generally. The various channels of communications are through the quarterly announcements on financial results to Bursa, relevant announcements and circulars, AGM and through the Group’s website at where stockholders can access corporate information, Annual Reports and company announcements.

However, any information that may be regarded as undisclosed material information about the Group will not be given to any single stockholder or stockholder's group.

Investor relations

The Board has formalised its policy on communication with stockholders in early 2013 to enable the Company to communicate effectively with its stockholders, prospective investors, stakeholders and public generally with the intention of giving them a clear picture of the Group’s performance and operations. To maintain transparency and to effectively address any issues and concerns, the Company has dedicated an electronic mail, i.e. to which stakeholders can direct their queries.

This Statement is issued in accordance with a resolution of the Board dated 10 April 2017.


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