Integrated Annual Report 2021

2021 has seen MISC stepping up on our commitment to operate our business ethically and responsibly by implementing and enforcing effective systems and controls to ensure a robust governance culture. We have strengthened the obligations of third parties in complying with MISC’s Human Rights Commitment and Modern Slavery Policy, by enhancing our Code of Conduct and Business Ethics (CoBE) for Third Parties. Our new and improved Declaration Integrity Pledge (DIP) now includes specific references to MISC’s Human Rights Commitment and Modern Slavery Policy. Additionally, we established a formal grievance mechanism structure and process for human rights related grievances. 2021 was also the embarkation point for our fiveyear MISC Compliance and Ethics Programme (2021 – 2025) to embed a culture of strong corporate governance, business ethics and conduct within our Group. Over the course of the next five years, compliance activities will focus on Monitoring and Assurance programmes emphasising the development and utilisation of systemised monitoring and assurance platforms. This includes the establishment of a Compliance Management Framework (CMF) which outlines MISC’s compliance strategy, objectives and guidance to assist management, business and operations develop, manage and maintain the governance standards required. AUSMAL KARDIN Vice President, Legal, Corporate Secretarial and Compliance VICE PRESIDENT’S REMARKS The MISC Group Policy Statement on Anti-Bribery and Corruption was revised to reflect the Compliance unit’s role as the custodian of the implementation of MISC’s Compliance and Ethics Programme and the ISO 37001:2016 Anti-Bribery Management System (ABMS). Alongside that, the Whistleblowing (WB) Policy was enhanced to comply with the Prime Minister’s Guidelines on Adequate Procedures requirements covering, among other matters, the security and confidentiality of the whistleblowing channel. As part of the ISO ABMS and Adequate Procedure Guidelines requirements, we conducted our annual Bribery Corruption Risk Assessment (BCRA) in July 2021 to identify and document potential bribery and corruption risks. This year’s annual review of the BCRA was to ensure a comprehensive coverage of the business activities and that it is appropriately mapped to the offences of the Malaysian Anti-Corruption Commission (MACC) Act in relation to the documented potential bribery/corruption risk and its mitigation measures. In implementing MISC Corporate Privacy Policy, entities within MISC Group have executed the Group Data Transfer Agreement (GDTA). The GDTA governs the legal obligations in order to comply with applicable laws and regulations related to transfer of personal data between parties. We carried out the MyAssurance Critical Legal Areas (CLA) Functional Checklist (FC) Annual Submission 2021 as a self-assessment tool to assess MISC’s legal compliance status and identify potential areas of weakness, non-compliance and/or unsound practices. No concerns or gaps were identified within the six critical legal areas of ethics and integrity, sanctions, data privacy, export control, competition and human rights. MISC continued to develop assurance checklists in complying to the laws and regulations, and to date eight FCs have been completed. Beginning from 2022, MISC will use these to assess our legal compliance status. We also implemented the Notification and Reporting Procedure (NRP) as a general guide for the Group when dealing with Malaysian Regulators, Enforcement Authorities, Government Agencies, and other relevant Authorities, to ensure that consolidated incidents which may lead to potential/actual civil or criminal breaches are reported through a centralised and structured manner to the Board Audit Committee (BAC). Towards building a strong culture of governance, we have maintained our training and awareness programmes for both employees and members of the Board which included, among others, the Annual CoBE e-Learning in December 2021, and other critical laws awareness sessions covering topics such as Data Privacy, Sanctions and Export Control, Third Party Compliance Due Diligence Operational Guidelines and Human Rights. In August 2021, we continued with our Annual CoBE Training to third parties through online platform, which saw the participation of 116 representatives from 70 third parties of the MISC Group, out of which 29 third parties were critical suppliers identified under the MISC Group’s Environment, Social and Governance (ESG) Supply Chain Assurance Programme. As part of the Sustainability Strategy 2021 - 2025, and in line with the new Malaysian Code on Corporate Governance (MCCG) 2021 published in April 2021 and the Adequate Procedures Guidelines, the MISC Group scorecard will cover the entire spectrum of the ESG dimension and setting the right KPIs for each ESG component. We have mapped our current corporate governance practices against the new and enhanced practices of MCCG 2021 to identify areas for improvement, which we plan to implement in 2022. Moving into the year ahead, we intend to continue with initiatives and measures identified under the Five-Year MISC Compliance and Ethics Programme 2021 – 2025. We will also include the Third-Party Risk Management Platform (TPRM) as part of our Compliance Management System (CMS) which is our compliance digital platform that provides a centralised solution to capture compliance activities. The TPRM requirement will be included as part of the new Procurement system in line with MISC Group’s Supply Chain ESG Self-Assurance Programme. We are confident our continuous pursuit in upholding a culture of ethics and integrity founded on ESG values will provide the strong foundations for the Group to maintain its value creation trajectory. AUSMAL KARDIN Vice President, Legal, Corporate Secretarial and Compliance OPERATING RESPONSIBLY BUSINESS REVIEW MISC Berhad 192 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 193