BOARD GOVERNANCE & RISK COMMITTEE REPORT GOVERNANCE The President/Group CEO attends the BGRC meetings to facilitate the discussion, as well as to provide the appropriate information and advice on relevant matters for the BGRC. BGRC meetings together with the tentative agendas are scheduled in advance of any new financial year to allow the BGRC members to plan ahead and incorporate the year’s meetings into their respective schedules. The agenda and meeting papers are distributed to the BGRC members via a secured collaborative software, which eases the process of distribution of meeting papers and minimises leakage of sensitive information, as well as enabling the Directors to have access to the papers electronically, anytime and anywhere. All proceedings of the BGRC meetings are duly recorded in the minutes and properly kept by the Company Secretary. Functions of the BGRC BGRC Functions To review, evaluate, report and make appropriate recommendations to the MISC Board on the following matters: Risk Management Provide oversight on the risk management policies, framework and process. Governance Determine the governance structure and monitor good governance practices. Compliance and Ethics Ensure effectiveness of the compliance and ethics programme. Sustainability Determine the sustainability strategy. i. Risk Management Matters pertaining to risk management fall within the scope of the BGRC, which will act as a sounding board to Management and perform a deep dive and challenge on risk matters. The BGRC shall review, evaluate, report and make the appropriate recommendations to the Board on the following matters: (a) Adequacy and effectiveness of MISC’s Risk Management Framework and the on-going activities (including reports on key strategic and business risks as well as environmental, social and governance risks) for identifying, evaluating, monitoring and mitigating risks; (b) Enterprise Risk Management Risk Register to ensure that appropriate systems and processes are in place to effectively monitor and manage the identified risks; (c) Risk assessments conducted by the Risk Management Committee or the Project Risk Assessment Sub-Committee, on business proposals and new initiatives; (d) Determination of MISC’s level of risk tolerance; and (e) Any other matters as determined by the Board. ii. Governance The BGRC reviews, evaluates, reports and makes appropriate recommendations to the Board on the determination of MISC’s governance structure in alignment with MISC’s business strategy. The BGRC also monitors good governance practices across the Group to ensure consistency with the Board’s risk appetite, guided by applicable laws and regulations. iii. Compliance and Ethics The BGRC reviews and makes the appropriate recommendations to the Board on the adequacy and effectiveness of MISC’s Compliance and Ethics strategy and objectives to continuously embed a culture of strong corporate governance, business ethics and conduct within the organisation, through a management framework for business and operations to develop, manage and maintain the governance required, including continuous enhancement and monitoring to meet and sustain the compliance strategy and objectives across the MISC Group. iv. Sustainability As sustainability is a key feature of MISC’s long term strategy, the Board considers sustainability to be of paramount importance when determining the Board agenda. Hence, the BGRC has been identified as the custodian for MISC’s sustainability initiatives. The BGRC has oversight on ESG matters, including climate change, health and safety, and cybersecurity. The BGRC reviews, evaluates, reports and makes appropriate recommendations to the Board on the determination of MISC’s sustainability strategy in alignment with MISC’s business strategy. SUMMARY OF THE BGRC’S WORK IN 2021 Appended below is a summary of the BGRC’s work in 2021, in discharging its functions and duties: Funtions Matters considered Risk Management • Reviewed the FRAS FY2021 indicators for the Group. • Received quarterly updates on the FRAS indicators for the Group. • Assessed the Group’s risk status across the five risk categories (financial, operational, legal and regulatory, HSSE, and information and communication technology) through the Enterprise Risk Management quarterly reports. • Reviewed the MISC Risk Register and assessed the impact and likelihood of all risk events to determine an overall risk rating for the risk events across the Group. • Received updates on emerging risks. • Reviewed the framework for project risk assessment and commercial pricing for the Group. • Assessed the Group’s HSSE performance through quarterly reports. • Assessed the proposed sale of LNG carrier, Puteri Firus. • Reviewed the proposals for participation in tenders. • Received updates on the status of ongoing tenders and projects. Governance • Reviewed the proposed adaption of the PETRONAS Cyber Security Governance Framework. • Reviewed the BGRC Report, Statement on Risk Management and Internal Control, Corporate Governance Overview Statement and Corporate Governance Report for inclusion in the MISC Integrated Annual Report 2020. • Reviewed the new and enhanced practices of the MCCG 2021, its impact to MISC and the proposed action plan. • Reviewed the proposed amendments to the BGRC Terms of Reference. Compliance and ethics • Received quarterly updates on compliance and ethics initiatives which cover policy related matters, monitoring and assurance, and training and awareness. • Conducted the annual review of the Modern Slavery Statement. MISC Berhad 268 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 269
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