CORPORATE GOVERNANCE OVERVIEW STATEMENT GOVERNANCE MISC was the proud winner of four significant awards at the Sustainable Business Awards Malaysia 2020/2021, clinching the top spot for ‘Waste Productivity and Materiality’, ‘Climate Change and Emissions’, ‘Land Use and Biodiversity’ and a Special Achievement Award for ‘Stakeholder Management’. In the FTSE4Good Bursa Malaysia Index of 2021, MISC maintained its ranking in the top 25% by Environmental, Social and Governance (ESG) Ratings amongst public listed companies in Malaysia that were assessed. These achievements are a timely indication that sustainability is embedded firmly as a core element in MISC’s business strategy, decision-making processes and operations at sea and shore, consistent with the 2021 update of the Malaysian Code on Corporate Governance (MCCG). MISC firmly believes that sound corporate governance (CG) practices are fundamental towards winning investors’ confidence and are pre-requisites to achieving the Company’s ultimate objectives of enhancing long-term shareholder value and protecting stakeholders’ interests. As governance forms one of the pillars which uphold MISC’s Sustainability Strategy 2021-2025, the Board strives to ensure that MISC’s CG practices conform to the best practice recommendations of the MCCG and comply with the Main Market Listing Requirements (MMLR) of Bursa Malaysia Securities Berhad (Bursa Securities). MISC has subscribed to all 13 Intended Outcomes with three deviations from the MCCG Practices. This CG Overview Statement seeks to provide investors and stakeholders with insights into the CG practices of MISC, specifically the following three key CG Principles as prescribed in the MCCG: This CG Overview Statement should be read together with the Company’s CG Report 2021 which is available on our website at www.misc.com.my. OUR CORPORATE GOVERNANCE FRAMEWORK The CG framework of MISC, as depicted below, is reflective of the way strategic and operational activities are managed. The compositions of the Board Committees and Management are designed based on the respective areas of knowledge and expertise. Principle A Board Leadership and Effectiveness Principle B Effective Audit and Risk Management Principle C Integrity in Corporate Reporting and Meaningful Relationship with Stakeholders The CG framework is supplemented by the Board Charter, Terms of Reference of the respective Board Committees and the MISC Limits of Authority (LOA). MISC’s Marine & Heavy Engineering business resides in a separate listed entity within the Group with its own CG framework which is modelled based on MISC’s CG framework. PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS Board Purpose The Board has the overall responsibility for providing oversight and stewardship to MISC in executing the Company’s objectives. The Board understands its responsibility to exercise good governance and is guided by the principles and best practices as stated in the MCCG. Board Charter In discharging the Board’s duties and responsibilities effectively, the Board is guided by the MISC Board Charter, which provides the framework for the performance of the Board’s function and duties vis-à-vis Management and the Company. The MISC Board Charter outlines amongst others the Board’s and the individual Directors’ roles and responsibilities, processes, functions and development, in order to attain efficiency in Board performance. The MISC Board Charter is consistent with the practices set out in the MCCG. For more information on the MISC Board Charter, please visit www.misc.com.my. Board Roles and Responsibilities In discharging its fiduciary and leadership functions, the main roles and responsibilities of the Board are as follows: • 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 CG culture and business conduct within the Company and its employees, 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 framework, 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, particularly the Senior Management, and ensuring there are measures in place for the orderly succession of the 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. STAKEHOLDERS • Customers • Employees • Community • Shareholders • Environment • Regulators BOARD OF DIRECTORS BOARD GOVERNANCE & RISK COMMITTEE NOMINATION & REMUNERATION COMMITTEE BOARD AUDIT COMMITTEE ASSURANCE PROVIDERS • Group Internal Audit • External Audit • Risk Management Committee* • Management Audit Committee* *comprises MC Members & Senior Management BUSINESS SEGMENTS • Gas Assets & Solutions • Petroleum & Product Shipping • Offshore Business • Integrated Marine Services DIVISIONS • Finance • Corporate Planning • Human Resource Management • Legal, Corporate Secretarial and Compliance • Group Health, Safety, Security & Environment PRESIDENT/GROUP CEO MANAGEMENT COMMITTEE • Marine & Heavy Engineering • Port Management & Maritime Services • Maritime Education & Training • Digital Ventures MISC Berhad 228 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 229
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