MISC Annual Report 2018

CORPORATE GOVERNANCE OVERVIEW STATEMENT The Board of Directors (the Board), Management and employees of MISC Berhad (“MISC” or “the Company”) continue to improve the standard of corporate governance practices throughout the MISC Group (the Group). MISC believes that sound corporate governance practices are fundamental towards winning investors’ confidence and are prerequisites to achieving the Company’s ultimate objectives of enhancing long-term shareholders’ value and protecting shareholders’ interest. The Board strives to ensure that the Company’s corporate governance practices conform to the best practice recommendations as laid down in the Malaysian Code on Corporate Governance 2017 (MCCG 2017). The Company’s corporate governance practices also conform to the requirements of Main Market Listing Requirements (MMLR) of Bursa Malaysia Securities Berhad (Bursa Securities). This overview statement shall provide the application of the principles set out in MCCG 2017 and shall be read in conjunction with the Corporate Governance Report Card, which is made available online at www.misc.com.my/corporate-governance CORPORATE GOVERNANCE FRAMEWORK The Company’s corporate governance framework is reviewed by the Board from time to time to ensure its relevance and ability to support operational requirements. The corporate governance structure of the Company, as shown below, illustrates how the MISC Corporate Governance Framework is structured in terms of responsibility and accountability. Each layer of responsibility, i.e., Board of Directors, Board Committees, Management Committee, Business Units and Service Units, is distinctly different but complements each other in attaining the objectives of the Group. PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS A. Board Charter The Group continues to be led by a dynamic Board which plays a vital role in the stewardship of the Group’s strategic direction and operations. In order for the Board to discharge its roles and responsibilities, the Board is guided by the MISC Board Charter that provides the framework in the performance of the Board’s function and duties vis-à-vis the Company and Management. The MISC Board Charter outlines amongst others, Board Roles and Responsibilities, Board Processes, Board Functions and Board Development in order to ensure efficiency in Board performance. The MISC Board Charter is consistent with new practices as set out in the MCCG 2017 and during the year under review, MISC Board Charter was amended and approved by the Board. The revised MISC Board Charter is available on the Company’s website at www.misc.com.my B. Board Roles and Responsibilities The Board is responsible for providing oversight and stewardship to the Company in executing the Company’s objectives and to exercise good governance through the following: • Establishing a strategic plan and setting of targets for the Company in line with the Company’s vision, mission and business objectives which supports long-term value creation and includes a sustainability agenda; • Overseeing the conduct and performance of the Company and of the President/Group CEO against set goals and objectives; • Upholding, together with Senior Management, good corporate gover- nance culture and business conduct within the Company and its em- ployees, which reinforces ethical, prudent and professional behaviour; • Identifying and understanding the principal risks of the Company and setting the Company’s risk appetite and ensuring the implementation of appropriate systems to evaluate, monitor and manage these risks; • Establishing an effective risk management and internal control frame- work, including regular review of the adequacy and the effectiveness of the framework; • Reviewing the Company’s strategic, capital or funding transactions and monitoring execution of these transactions; • Ensuring the integrity and adequacy of the Company’s financial and non-financial reporting and disclosure; • Ensuring sound succession plan and continuous development of human capital, in particular of the Senior Management, and there are measures in place for the orderly succession of Board and Senior Management; and • Developing and implementing an investor relations programme and putting in place procedures to enable effective communications with the stakeholders of the Company. MANAGEMENT COMMITTEE PRESIDENT/ GROUP CEO BOARD NOMINATION AND RENUMERATION COMMITTEE BOARD OF DIRECTORS OF MISC BERHAD STAKEHOLDERS BOARD AUDIT AND RISK COMMITTEE LNG ASSET SOLUTIONS PETROLEUM & PRODUCT SHIPPING MARITIME EDUCATION & TRAINING SUPPORT SERVICES INTEGRATED MARINE SERVICES PORTS & TERMINAL SERVICES OFFSHORE BUSINESS The Board’s roles and responsibilities are clearly provided in the MISC Board Charter and MISC Limits of Authority (MISC LOA) which also outlines the demarcation between Board’s and Management’s responsibilities. To facilitate the Board’s effectiveness and the efficient discharge of its duties and responsibilities, the Board is assisted by the Board Committees that operate under clearly defined Terms of Reference. Nevertheless, the Board is ultimately accountable and responsible for the affairs and business of the Company. The Company has 2 Board Committees, namely the Board Audit and Risk Committee (BARC) and the Nomination and Remuneration Committee (NRC). The BARC has the oversight role on governance, financial reporting, risk management and internal control. The BARC is also responsible for the risk appetite setting for the Company in managing the key risks affecting the Company, and also gives attention to anti-bribery and corruption risks, and oversight of measures for an effective whistle- blowing management framework and process. The oversight role on Directors’ skills and experience and Board composition, Directors and Senior Management compensation and rewards, succession planning and human resource, amongst others, is within the purview of the NRC. The Group’s Marine & Heavy Engineering business resides in a separate listed entity within the Group. It has a separate corporate governance framework that is modelled along the lines of MISC’s corporate governance framework. The Board is pleased to disclose the Company’s application of the principles as set out in MCCG 2017. HIGHLIGHTS OF THE YEAR OUR BUSINESS OUR LEADERSHIP OUR PERFORMANCE OUR COMMITMENT TO SUSTAINABILITY OUR GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 50 TH ANNUAL GENERAL MEETING 169 MISC BERHAD ANNUAL REPORT 2018 168