Board Charter

1. Purpose

This Charter is designed to provide guidance and clarity for Directors and Management with regard to the role of the Board and its Committees, the requirements of Directors in carrying out their stewardship role and in discharging their duties towards the Company as well as the Board’s operating practices. Whilst the Charter serves as a reference point for Board activities, it should not be construed as an exhaustive blueprint for Board’s operations.

The Group has in place a Vision, Mission and is guided by its Values to sustain good corporate governance and business responsibility in creating values to the stakeholders. The Vision, Mission and Values are presented as follows:

Vision

Oriental Holdings Berhad aims to achieve sustainable business growth and enhance shareholders value.

Mission

We seek to be a highly competitive organisation through innovation and achieve continuous improvements in our businesses.

Values

• Our people are our valued business core.
• Our customers are our focus of excellence.
• Our business integrity is our commitment and responsibility.
• Our shareholders are our utmost important business relationship.
• Our dedication for continuous improvement is our core driving force.

This Charter does not overrule or pre-empt the statutory requirements of Directors enshrined in the Companies Act 2016, the Income Tax Act 1967 or other relevant statutes, including the conduct of the Board as stipulated in the Constitution of the Company.

2. Interpretation

3. Role of the Board

The Board is responsible for the stewardship of OHB’s business and affairs on behalf of shareholders with a view to enhance long term shareholder value whilst taking into account the interests of other stakeholders and maintaining high standards of transparency, accountability and integrity.

The principal responsibilities of the Board as adopted from the Code are:

• (a) 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;
• (b) overseeing the conduct of the Group’s business to evaluate whether the business is being properly managed notwithstanding that each of the subsidiaries has a separate Board of Directors, which include managing conflicts of interest, preventing the abuse of power, fraud, bribe and corruption, insider trading and money laundering;
• (c) identifying principal business risks faced by the Group and ensure the implementation of appropriate systems to manage these risks;
• (d) overseeing the governance of sustainability in the Company, including setting the Company’s sustainability strategies, priorities, and targets;
• (e) succession planning, including appointing, training, fixing the compensation of and, where appropriate, replacing members of the Board and Senior Management;
• (f) overseeing the development and implementation of a shareholder communications policy for the Company;
• (g) ensuring that the Company’s obligation to shareholders and other stakeholders are met and understood;
• (h) ensuring the Company’s sustainability strategies, priorities, and targets, as well as performance against these targets are communicated to its internal and external stakeholders;
• (i) reviewing the adequacy and integrity of the Group’s risk management, internal control and management information systems, ensuring there is a sound reporting framework and regulatory compliance;
• (j) provide assurance to its internal and external stakeholders that the Group is operating in compliance with its policies and any other applicable regulatory requirements. This includes establishing a “tone from the top” and spearheading the Group’s efforts to improve on its corruption risk management framework, internal control system, review and monitoring as well as training and communication;
• (k) direct and periodically review an anti-corruption compliance programme which includes clear policies and objectives that adequately addresses corruption risk;
• (l) approve the Whistle Blowing Policy and Procedure to encourage employees to report any legitimate concerns over any wrongdoing the Group relating to unlawful conduct, financial malpractice or dangers to the public or the environment within as well as any suspected and/ or real corruption incidents;
• (m) review and/ or acknowledge on the investigation outcome of whistleblowing issues, results of fraud, illegal acts or suspected violations of Group policies involving all employees, Management and Directors; and
• (n) Periodic review and approve Code of Ethics to align with the changes in law, governance code coupled with the changes in Company’s vision, mission and business plan.

The Board has also set out the details of matters reserved for its decision in carrying its roles and responsibilities.

4. Board Structure

4.1. Board balance and mix

The Board recognises the importance of independence and objectivity in its decision-making process. At least one-third (1/3) of the Board should consist of Independent Non-Executive Directors.

The Company’s Constitution stipulate a minimum of two (2) and a maximum of twelve (12) Directors. The Board shall, from time to time to examine its size with a view to determine the impact of its number upon its effectiveness.

To enhance its effectiveness, the Nominating Committee is entrusted by the Board to appraise candidates for directorship, including those who retire and offer themselves for re-election and re-appointment, before recommending to the Board. All Directors shall satisfy the fit and proper criteria in the Group’s Fit and Proper Policy. The composition of the Board shall be guided by the Board Diversity Policy to ensure the Board is of appropriate mix so as to optimise the performance of the Board, as a whole, and align the Board’s capabilities with the strategic direction of the Company. To comply with Paragraph 15.02(1)(b) of the Listing Requirements, there shall be at least one (1) woman director on the Board.

The Board may identify and appoint from amongst its members, a Senior Independent Non-Executive Director to whom the concerns of Directors and shareholders of the Company may be conveyed.

For purpose of accountability, the Board recognises the importance of having a clearly accepted division of responsibilities at the head of the business segment. Each business segment shall be headed by an Executive Director who shall be accountable directly to the EXCO.

4.2. Role of the Chairman

The Board appoints from amongst its members a Chairman who represents the Board to shareholders of the Company. The Chairman is primarily responsible for the following:

• (a) acting as chief spokesperson and representative of the Board and Company;
• (b) ensuring that the Board is aware of its statutory obligations to the Company, its shareholders, employees and other stakeholders;
• (c) presiding at Board and shareholder meetings and ensuring the proceedings thereof comply with good conduct and practices;
• (d) establishing frequency and timing of Board meetings as well as reviewing such practice from time to time, as considered appropriate, or as requested by the Board;
• (e) functioning as facilitator at Board meetings and ensuring that no member, whether executive or otherwise, dominates discussion. The Chairman shall also encourage Board members to participate in discussions and that relevant opinions amongst members are forthcoming, resulting in logical and understandable outcomes;
• (f) ensuring that all Directors are enabled and encouraged to participate at Board meetings. This includes ensuring that all relevant issues are on the agenda and that all Directors receive timely and relevant information tailored to their needs and that they are properly briefed on issues arising at Board meetings;
• (g) ensuring Executive Directors accept their share of responsibilities of governance and provide regular updates on all issues pertinent to the welfare and future of the Group to the Board;
• (h) liaising and co-ordinating input from all Directors, especially Board Committees’ Chairman, to optimise the effectiveness of the Board and its Committees;
• (i) ensuring the adequacy and integrity of the Board governance processes; and
• (j) performing other responsibilities assigned by the Board from time to time.

The Chairman may delegate specific duties to Executive Directors, Board members and/or committees as appropriate.

4.3. Role of the Executive Directors

The position of the Executive Directors in essence is to ensure the effective implementation of the Group’s strategic plan and policies established by the EXCO and/or the Board as well as to manage the daily conduct of the business to ensure its smooth operations.

The Executive Directors are accountable to the Board for the achievement of the Group’s goals and objectives as well as observance of Management’s limits.

Details on duties and responsibilities of Executive Directors are documented under the terms of reference for Executive Committee.

4.4. Role of Non-Executive Directors (“NED”)

The roles of NEDs largely encompass the monitoring of Company performance and contributing to the development of Company strategy, clarified as follows:

• Strategy: Constructively challenge and contribute to the development of the Group’s strategy; and
• Performance: Oversee the performance of Management in meeting agreed goals and objectives and monitor the reporting of performance.

Non-Executive Directors may act as a bridge between Management, shareholders and other stakeholders. They should provide the relevant checks and balances, focusing on shareholders’ and other stakeholders’ interests and ensuring that high standards of corporate governance are applied.

4.5. Tenure of Directors

Pursuant to the Company’s Constitution, all Directors must retire once at least every three (3) years but shall be eligible for re-election.

The tenure for an independent director (“ID”) to serve on the Board is nine (9) years, consecutively or on a cumulative basis. The ID may continue to serve on the Board beyond the 9-year tenure in the capacity of a Non-Independent Director. Where the Board is of the view that the ID can continue beyond the 9-year tenure as an ID, it must justify and seek shareholders’ approval.

4.6. Company Secretary

The appointment and removal of the Company Secretary is a matter for the Board as a whole. The Board recognises the fact that the Company Secretary should be suitably qualified and capable of carrying out the duties required of the post.

The key role of the Company Secretary is to provide unhindered advice and services for the Directors as and when the need arises, to enhance the effective functioning of the Board and to ensure regulatory compliance.

4.7. Board Committees

The Board reserves the right to establish Committees from time to time in the discharge of its duties and responsibilities. Where a Committee is formed, specific terms of reference of the Committee shall be established to cover matters such as the purpose, composition and functions of the Committee. A number of standing Committees with written terms of reference has been established, namely the following:

Executive Committee (“EXCO”)

Whilst the Board reserves to itself the overall responsibility for establishing business objectivities and targets for the Group, the EXCO assists the Board in the discharge of its stewardship role by overseeing the implementation of Board policies to achieve maximum profitability and growth.

The EXCO members by virtue of their positions as Executive Directors of the Group, forms part of the Key Senior Management of the Group that is primarily responsible for the business operations of OHB’s core business and principal subsidiaries.

Risk Management Committee

The Risk Management Committee is responsible for reviewing and recommending the risk management policies and strategies for the Group. It assists the Board to fulfil its oversight responsibility on risk management to manage the overall risk exposure of the Group.

Audit Committee

The Audit Committee assists and supports the Board to oversee the Group’s processes for producing financial data, its internal control system and independence of the Group’s external and internal auditors.

Nominating Committee

The Nominating Committee oversees the nomination and election of new directors, the conduct of Directors’ assessment and the facilitation of Directors’ induction, training and succession programmes.

Remuneration Committee

The Remuneration Committee is primarily responsible for recommending to the Board the remuneration of Executive Directors, drawing from outside advice, if necessary.

4.8. The Board’s relationship with shareholders and stakeholders

The Board shall maintain an effective communications policy that enables both the Board and Management to communicate effectively with shareholders, stakeholders and the general public.

All Directors are expected to attend general meetings and provide meaningful response to questions addressed to them in the capacity of their roles and responsibilities as member of the Board or Board Committee in the Company.

The Board shall ensure that general meetings are conducted in an efficient manner and serve as crucial mechanisms in shareholder communications. For instance, ensuring notice of meetings states which Directors are standing for re-election or re-appointment with a brief description to include matters such as age, relevant experience, list of directorships, date of appointment to the Board, Director’s interest, details of participation in Board Committees and the fact that a particular Director is independent, if relevant, and includes a statement as to whether the Board supports the appointment, re-appointment, election, or re-election of the Director and the reasons why.

Refer to Corporate Disclosure and Communications Policy for further guidance on communications with shareholders.

5. Board Processes

5.1. Board meetings

Meetings shall be conducted at least on a quarterly basis. The Chairman of the Board or any Director may request for additional meetings to table matters of urgency. Except in cases of emergencies, seven (7) days notice of every Board meeting shall be provided in writing.

Matters arising at Board meeting shall be decided by consensus through discussion. In the case where consensus cannot be reached, it shall be decided by majority of votes. In accordance with Section 124 of the Company’s Constitution, the Chairman of the meeting shall have a second or casting vote.

5.2. Agenda

The Chairman and the Company Secretary shall undertake the primary responsibility for preparing the Board’s agenda which include matters specifically reserved for the Board’s decision. The Board shall record its deliberation, in terms of the issues discussed, and the conclusions thereof, in discharging its duties and responsibilities.

5.3. Meeting papers

Board papers and agenda items shall be circulated at least seven (7) days prior to the meeting to allow ample time for Directors to consider the relevant information, or at a shorter period where unavoidable.

Minutes are targeted to be prepared within fourteen (14) days following each Board meeting and will be circulated in draft form. The draft minutes will be re-circulated with the Board papers for signing at the following meeting. Issues discussed in arriving at each Board’s decisions shall be recorded.

5.4. Access to information

A record of submissions, papers and materials presented to the Board is maintained and held by the Company Secretary, together with minutes of meetings and made accessible to all Directors.

All Directors have the same right of access to information relevant to the furtherance of their duties and responsibilities as Directors of the Company.

5.5. Access to Senior Management

Board members are entitled to rights of access to the Group’s Senior Management for information related to the issues discussed at Board meetings.

5.6. Independent professional advice

The Board as well as any Director is entitled to obtain independent professional advice relating to the affairs of the Group or to his responsibilities as a Director as considered necessary for the discharge of his duties and responsibilities as Director and for the benefit of the Group. Subject to approval of the Board, the Group will reimburse the cost of the advice but the Director will ensure, so far as is practicable, that the cost is reasonable.

5.7. Appointment, Vacation of Office and Removal of Directors

Upon the appointment of a Director, the Director shall provide to Bursa Malaysia an undertaking prescribed by Bursa Malaysia immediately and in any event not later than fourteen (14) days.

References shall be made to Para 15.05 of the Main Market Listing Requirements of Bursa Malaysia and the Companies Act 2016 for matters concerning qualification, vacation of office and removal of Directors in conjunction with the Company’s Constitution.

5.8. Induction process

The Chairman of the Board, the Group Managing Director(s), other Executive Director(s) as well as Nominating Committee members will provide new Directors with appropriate background materials and information about the Group in advance of their first Board meeting.

5.9. Directors’ continuing education

To maintain and enhance its effectiveness, the Board believes that each Director should receive continuing education on an annual basis regarding Directors’ duties and responsibilities, corporate governance, legal, regulatory and accounting developments, investor relations matters and other topics relevant to the oversight of the business of the Group.

Directors shall possess the knowledge required of them, including having sufficient understanding of the sustainability issues relevant to the Company and its business (including climate-related risks and opportunities where relevant) to perform their respective responsibilities in the Board and Board Committees.

The Nominating Committee, in association with the Corporate Office and Company Secretary shall recommend the annual training calendar for Directors. The costs of the induction, mandatory accreditation programme and/ or continuing education program shall be borne by the Company.

5.10. Directors’ external commitments and conflict of interest

The Company shall ensure that the Directors, have the character, experience, integrity, competence and time to effectively discharge their respective roles.

Directors shall devote sufficient time to carry out their responsibilities. Each Director is expected to attend at least 50% of the Board meetings.

A Director of the Company or Group shall not hold more than five (5) directorships in listed issuers on Bursa Malaysia. Before accepting any new directorship, Directors shall notify the Chairman, the notification of which shall include an indication of time that will be spent on the new appointment.

The Company’s Constitution stipulate that a Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company or any of its subsidiaries shall declare his/her interest in accordance with the provisions of the Companies Act, 2016 (“the Act”). The Director concerned shall not participate in deliberations and shall abstain from casting his/her vote in any matter arising therefrom, especially in those circumstances provided for under Section 131 of the Act.

Should there be an actual, potential or perceived conflict of interest between the Company or a related corporation and a Director, or an associate of a Director such as a spouse or other family members, the Director involved shall make full disclosure to the Board and act honestly in the best interest of the Company.

An actual, potential or perceived conflict of interest shall not necessarily disqualify an individual Director from the Board provided that full disclosure of the interest has been made in good faith and with due honesty.

The Company Secretary shall facilitate the Directors’ annual independence and conflict of interests self-declarations in accordance with the Directors’ Independence Policy.

6. Directors’ Remuneration

NEDs will be paid a basic fee for acting as Directors of the Company, subject to approval by shareholders. They will also be paid a sum based on their responsibilities in Board Committees and for their attendances at meetings.

The remuneration of EDs shall be recommended by the Remuneration Committee while remuneration of all Directors shall be approved by the Board with the individual Director concerned abstaining from discussing his/her individual remuneration. The amount of remuneration payable shall be determined with reference to the Directors’ Remuneration Policy.

7. Board and Member Assessment

The Nominating Committee is entrusted by the Board to review the performance and effectiveness of the Board and Board Committees, including individual Directors, annually, with the assessment report, together with a report on the Board balance covering the required mix of skills, experience and other qualities of Board members, tabled for discussion at the full Board.

8. Representation of the Company

The Board looks to Management to speak on behalf of the Company, in collaboration with the Board Chairman, and to manage the communication of information to investors, other stakeholders and the public in an orderly and effective manner while adhering, at all times, to relevant laws and regulatory requirements with reference to the Company’s Corporate Disclosure and Communications Policy

9. The Company’s Constitution and Management’s limits

The Board operates pursuant to the powers, and subject to rules, in the Constitution of the Company as adopted by shareholders in general meetings.

Management is expected to act within all specific authorities delegated to it by the Board under the approved Discretionary Authority Limits.

10. Directors’ Code of Ethics

The Directors shall observe the Directors’ Code of Ethics as follows:

• (a) Compliance at all times with this Code of Ethics, the Board Charter and regulatory requirements expected to be adhered to by Directors of the Company;
• (b) Observe high standards of corporate governance, in particular the practices set out in the Malaysian Code on Corporate Governance, the Main Market Listing Requirements of Bursa Malaysia, the Companies Act 2016 and the Capital Markets and Services Act 2007;
• (c) Adhere to the principles of selflessness, integrity, objectivity, accountability, openness, honesty and leadership;
• (d) Act in good faith and in the best interest of the Company;
• (e) Not misuse information gained in the course of duties for personal gain or for any other purpose, nor seek the opportunity of the service as Directors to promote private interests or those of connected persons, firms, businesses or other organisations;
• (f) Ensure the Company’s resources are safeguarded and that the Company conducts its operations economically, efficiently and effectively at all times;
• (g) Directors shall not accept positions in Board Committees or working groups where a conflict of interest is likely to arise, without first declaring their interest at Board meeting;
• (h) Directors shall declare any personal, professional or business interests that may conflict with their responsibilities as Directors of the Company;
• (i) Directors shall adhere to the regulatory requirements pertaining to trading in the Company’s shares, including insider trading; and
• (j) Directors shall refrain from any activity or behaviour that could give rise to the perception or suspicion of any corrupt conduct or the attempt thereof.

TERMS OF REFERENCE – EXECUTIVE COMMITTEE

Duties

Within the authorities delegated to it by the Board, the key tasks of the Executive Directors and EXCO are as follows:

Executive Directors

• (a) executive management of the business segments for which they are in charge covering, inter-alia, the development of a strategic plan, an annual operating plan and budget, performance benchmarks to gauge Management’s performance and the analysis of management reports;
• (b) developing long term strategic and short term profit plans, designed to ensure that the business segment’s requirements for growth, profitability and return on capital are achieved;
• (c) directing and controlling all aspects of the business operations in a cost effective manner, covering operational requirements, best technological practice, high levels of productivity and flexibility to cope with planned development and awareness of market place opportunities and threats, deploying resources to exploit and counter them respectively;
• (d) effectively overseeing the human resource of the organisation with respect to key positions in the segment hierarchy and ensures the general well-being of employees, determination of remuneration as well as terms and conditions of employment for Senior Management in consultation with the EXCO and the Board and issues pertaining to discipline of all employees;
• (e) effectively representing the interest of the Company with major customers, governments and their agencies, and industries at large, to ensure general goodwill towards the Company and cooperation in planned development;
• (f) assuring the Group that its corporate identity, products and services are of high standards and are reflective of the market environment;
• (g) providing assurance to the Board on the adequacy and effectiveness of the risk management and internal control system and anti-corruption framework for their respective segments;
• (h) assisting the Sustainability Committee (“SC”) to meet its oversight responsibilities in relation to the Group’s sustainability initiatives and performance;
• (i) assisting the Chairman in organising information necessary for the Board to deal with the agenda and for providing this information to Directors on a timely basis; and
• (j) review and approve the request of receiving and providing gift, entertainment, travel, hospitality, donation and sponsorship to third parties based on the approved authorisation limits.

Executive Committee

• (a) sets strategic objectives and devices an overall strategic plan to chart the direction of the Group in meeting the objectives and recommends to the Board for adoption;
• (b) puts into effect the policies laid down by the Board and monitors Management actions to ensure that Board policies are adhered to;
• (c) receives and considers regular reports from businesses within the Group to monitor and drive performance improvement;
• (d) keeps under review the adequacy of reporting arrangements and the effectiveness of internal control and risk management system;
• (e) acts as Sustainability Committee (“SC”) who is responsible to provide advice and assistance to Board in monitoring the decisions and actions of management in achieving the Group’s goal to be a sustainable organisation;
• (f) oversees Group Senior Management appointments, succession planning, remuneration packages and senior staff development;
• (g) examines, appraises and submits to the Board proposals for investment opportunities, which include acquisition or disposal of assets which are substantial in value;
• (h) guides the Group in its relations with shareholders and other key stakeholders, including staff, regulators, politicians, environmental interests and the media;
• (i) clears all papers (only with minor exceptions arising only as a result of practical difficulties) intended for consideration by the Board in advance of circulation or make recommendations to the Board; and
• (j) review and approve the request of providing gift, entertainment, travel, hospitality, donation and sponsorship to third parties based on the approved authorisation limits.

TERMS OF REFERENCE – RISK MANAGEMENT COMMITTEE

Duties and Responsibilities

In fulfilling its primary objectives, the Committee shall undertake the following responsibilities and duties in accordance with Guidelines for Directors of Listed Issuers for the Statement on Risk Management and Internal Control issued by Bursa Malaysia:

Risk Management Framework

• Review the Risk Management Policy and Procedure document, which outlines the risk management framework for the Group and offers practical guidance to all employees on risk management issues;
• Facilitate the appointment of a dedicated Risk Officer to coordinate the ERM activities within the Group; and
• Conduct and review of corruption risk assessment at least every 3 years pursuant to Malaysian Anti-Corruption Commission Act 2009 in order to provide assurance that the Group is operating in compliance with its policies and procedures in relation to corruption.

Risk Identification, Assessment, Monitoring and Reporting

• Identify and communicate to the Board the key risks (present and potential) faced by the Group, their changes and management action plans to manage the risks;
• Monitor the Group’s level of risk tolerance and risk exposure;
• Review effectiveness and efficiency of the key internal control procedures and processes in place to manage risks;
• Review, together with other Committees, the Management, Group Internal Audit and External Auditors, any significant risks and exposures that exist and assess the steps that the Management has taken to minimise such risks to the Group;
• Review periodical reports from Management and/or Internal Audit on the progress of mitigation plans for key risks identified; and
• Any other matters, as authorised by the Board.