Effective Stewardship Through Good Governance Effective Stewardship Through Good Governance Press Metal Aluminium Holdings Berhad 58 59 Integrated Annual Report 2023 PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D) I. Board Responsibilities (cont’d) Governance of Sustainability (cont’d) The Sustainability Governance Structure endorsed and adopted by the Board is outlined below: Risk Management Committee Sustainability Committee Board of Directors Risk Management Team Corporate Sustainability Development Team Division Sustainability Working Group Midstream Sustainability Working Group Downstream Sustainability Working Group Press Metal Bintulu Sdn. Bhd. Press Metal Sarawak Sdn. Bhd. Press Metal Aluminium Rods Sdn. Bhd. Press Metal International Limited Press Metal International Technology Ltd. PMB Aluminium Sdn. Bhd. Pursuant to the Sustainability Governance Structure, the SC, which is a Management Committee, supports the Board in overseeing the sustainability development of the Group, under the oversight of the RMC. The Corporate Sustainability Development Team (“CSD Team”) provides support and input to the SC on the Group’s strategies, priorities and targets on matters related to sustainability as well as provides advisory support to the Division Sustainability Working Group (“SWG”) in the areas of sustainability, where necessary. The SWG is responsible for the implementation, monitoring and reporting of sustainability management action across respective business activities. The Board is also supported by the RMC for the review and assessment of the Group’s risk management and internal controls systems, covering the sustainability risks that the Group is or may be exposed to. The Board has fiduciary duties and is focused on maintaining good corporate governance practices, which include a commitment to ethics, integrity and corporate responsibility, ensuring that our corporate strategy aligns with our values and culture. The Board takes guidance on material sustainable issues from the SC. The strategic management of the material sustainability matters and the integration of sustainability considerations in the operations of the Group are driven by the Senior Management of the Company, led by the Group Chief Executive Officer, who serves as the Chair of the Group Sustainability Committee. Progress on the implementation of the Group's sustainability initiatives, ESG targets and other significant ESG matters are brought to the attention of the Board through the SC for deliberation. Corporate Governance Overview Statement PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D) I. Board Responsibilities (cont’d) Governance of Sustainability (cont’d) The SC presented updates to the Board on the sustainability performance review of the Group related to GHG Emissions Intensity, Water Withdrawal Intensity, Waste Diversion Rate, Safety and Health, and Gender Diversity at the quarterly Board meetings and keeps the Board updated on any latest ESG developments and initiatives of the Group. The Board had undertaken relevant trainings to stay abreast and understand the latest sustainability issues. The relevant training and programmes in relation to Sustainability are shown in the following: (a) Climate governance – a standing item in board agendas (b) Update Brief on climate risk and ESG initiatives (c) Exercising Sustainability Governance and Oversight – What is next for Press Metal (d) ESG Frameworks: Understanding the Alphabet Soup (e) Understanding Task Force on Climate-Related Financial Disclosures (“TCFD”) (f) Materiality: Determining ESG Topics That Matter (g) JC3 Upskilling Sustainability Training (JUST) Series 3 – A Passion for Purpose, Delivering a Just Transition to Net Zero (h) TCFD 101 – Climate Disclosure Training (i) Climate Risk Management and Scenario Analysis (j) Developing Malaysia’s Roadmap to Net Zero (k) Understanding the Requirements in Bursa Malaysia’s Enhanced Sustainability Reporting Framework During the financial year under review, the Board adopted the ESG-Linked Executive Incentive Remuneration Framework for Key Senior Management personnel (covering C-Suite members and Heads of Divisions/ Departments) of the Group. The framework defines how remuneration components should be linked to the ESG metrics, particularly the material matters that are considered most important to the Group’s business and stakeholders as well as approaches on how ESG metrics may be incorporated into various incentive plans. Malus and Clawback procedures are part of the ESG-Linked Executive Incentive Remuneration Framework. Full details of the Group’s Sustainability efforts can be found in the Sustainability Report on pages 86 to 205 of this IAR 2023. II. Board Composition Board Size, Composition and Diversity During the financial year under review, the Board comprises ten (10) members, of whom five (5) are Executive Directors and five (5) are Independent Non-Executive Directors, along with one (1) Alternate Director to Executive Director. The composition of the Board complies with Paragraph 15.02 of the MMLR of Bursa Malaysia, which requires at least two (2) directors or one-third (1/3) of the Board, whichever is higher, to be independent. The size and composition of the Board are reviewed periodically by the NCGC to ensure that the size of the Board is appropriate and conducive for effective discussion and decision-making, with a strong element of independence. No individual or small group of individuals dominates the Board’s decision-making process. The Independent Non-Executive Directors have conducted themselves professionally, are clear with the objectives and their fiduciary role, with independent insights in doing what is right for the Company and all stakeholders. The NCGC, with the concurrence of the Board, is of the view that the current Board size is optimal based on the Group’s operation and that it reflects a fair mix of financial, technical and business experiences that are important to the stewardship of the Group. Corporate Governance Overview Statement
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