MISC Integrated Annual Report 2020

NOMINATION AND REMUNERATION COMMITTEE REPORT In sourcing for suitable candidates, the Company has used a variety of approaches and sources, including from Directors’ registries available under the NAM Institute for the Empowerment of Women, the Minority Shareholders Watch Group (MSWG), LEAD Women, referrals from existing Board members and independent search firms. The nomination of Non-Independent Non-Executive Directors (NINEDs) to the Board is made by PETRONAS, being the majority shareholder of the Company. The potential candidates to assume the role of Independent Non-Executive Directors (INEDs) are first tabled to the NRC for consideration and evaluated based on merit, suitability with the Company’s objectives and required mix of skills, knowledge, expertise, experience, professionalism, integrity, personal attributes and time commitment required to effectively fulfil his or her role as a Director. Diversity in terms of age, gender and ethnicity is also considered during the selection process. In 2020, MISC completed its search for new Directors (Board Search), culminating in the appointment of three new INEDs on 9 October 2020: (i) Datuk Abu Huraira Abu Yazid; (ii) Datin Norazah Mohamed Razali; and (iii) Mohammad Suhaimi Mohd Yasin. The candidates for the Board Search were sourced through independent search firms and referrals from Board members. The increase in total number of INEDs on the Board of MISC to eight facilitated the establishment of a new Board Committee, the Board Governance and Risk Committee (BGRC), which is composed entirely of INEDs. The NRC is also responsible for recommending to the Board, Directors who are standing for re-appointment or re-election at the Annual General Meeting (AGM) pursuant to Rules 21.7 and 21.8 of MISC’s Constitution. At the forthcoming 52 nd AGM of the Company, the following Directors will be retiring from the Board, and being eligible, have offered themselves for re-election: Directors retiring pursuant to Rule 21.7 Directors retiring pursuant to Rule 21.8 • Datuk Abu Huraira Abu Yazid • Datin Norazah Mohamed Razali • En. Mohammad Suhaimi Mohd Yasin • Mr. Lim Beng Choon (1) • Dato’ Ab. Halim Mohyiddin • Dato’ Rozalila Abdul Rahman (1) Mr. Lim Beng Choon will retire from the MISC Board on 15 August 2021, when he reaches the ninth anniversary of his tenure as an INED of MISC. In line with the MCCG 2017, the Board Charter includes a policy which limits the tenure of INEDs to nine years as well as the Board Diversity Policy. For more information on the MISC Board Charter, please visit www.misc.com.my. ii. Board performance evaluation – Board, Board Committees’ and individual Directors’ assessment The performance of the Board and the Board Committees is tracked annually against the Board Key Performance Indicators (KPIs), using a Performance Evaluation Sheet as a tool. The Board KPIs focus on achievements of measurable ‘hard targets’ based on three criteria, i.e. Board Structure, Board Operations and Board Roles and Responsibilities. Each Director is required to give rating ‘1’ for ‘Best practice’, rating ‘2’ for ‘Meets requirement’ or rating ‘3’ for ‘Areas of improvement’. The final ratings are then reviewed by Management, the NRC and the Board, and consequently Action Plans are implemented by Management for the areas highlighted for improvement. 1 Identification of Critical Positions within the Group based on three criteria • Impact on business results • Sustaining the business • Uniqueness of positions 2 Identification of potential successors from pool of staff at General Manager and Senior Manager levels, nominated and assessed by the Leadership Team based on four criteria • Achievement: Sustainability of performance • Ability: Competence to deliver successfully • Agility: Traits and values which help adaptability • Aspiration: Passion, tenacity and commitment for self and the organisation 3 Deliberation and identification of successors by the MC based on three criteria, followed by mapping of shortlisted individuals to a maximum of three Critical Positions and rating of readiness levels: R1-Ready now R2-Ready within 12 months R3-Ready between 12 and 24 months R4-Ready above 24 months • Capabilities: Leadership and functional competencies • Contribution: Results orientation based on performance ratings and key highlights during the year • Cultural Fit: Demonstration of cultural beliefs and own career and personal aspirations 4 Formulation of an Individual Development Plan for each individual For FY2020, the Board and Board Committees will be assessed based on the following areas: Board and Board Committees Structure • Composition • Board Audit and Risk Committee evaluation • Orientation, training and development • Nomination and Remuneration Committee evaluation Board Operations • Timeliness • Adequacy of information • Access to Management Board Roles and Responsibilities • Strategic vision • Risk management and internal controls • Succession planning • Investor relations • Effectiveness • Discharge of functions, duties and responsibilities in accordance with the TOR Board Performance Evaluation Board Committees Performance Evaluation The FY2020 performance of the individual Directors will be assessed using a peer review. iii. Senior Management - Appointment and succession planning The NRC is tasked with making appropriate recommendations to the Board for the appointment or renewal of contracts of employment of the President/Group CEO and Management Committee (MC) members of the Company, taking into account the strategy and long-term succession planning of the MC composition. During the year under review, having conducted all relevant reviews and assessments, the NRC deliberated and recommended the appointment/re-appointment of the following MC members: • Iwan Azlan Mokhtar (re-appointed as Vice President, Human Resource and MC member); • Syed Hashim Syed Abdullah (re-appointed as Vice President, Offshore Business Unit and MC member); • Zahid Osman (re-appointed as Vice President, LNG Asset Solutions and MC member); • Capt. Raja Sager Muniandy (re-appointed as Managing Director/CEO of Eaglestar Marine Holdings (L) Pte. Ltd. and MC member); • Pandai Othman (appointed as Managing Director/CEO of Malaysia Marine and Heavy Engineering Holdings Berhad and MC member). The NRC also has the responsibility for ensuring appropriate succession planning for MC members. Below is a brief illustration of the succession planning approach and process adopted by MISC Group: /////// Business Review / Leadership / Governance / Financial Statements / Additional Information / MISC Berhad / Integrated Annual Report 2020 9 278 MISC Berhad / Integrated Annual Report 2020 9 279 / Additional Information / Financial Statements / Governance / Leadership / Business Review /////// Section Section