iii. Compliance and Ethics The BSRC 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. Governance The BSRC 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 BSRC also monitors good governance practices across the Group to ensure consistency with the Board’s risk appetite, guided by applicable laws and regulations. Appended below is a summary of the BSRC’s work in 2022, in discharging its functions and duties: Functions Matters considered Risk Management • Reviewed the Financial Risk Appetite Setting (FRAS) FY2022 indicators for the Group. • Received quarterly updates on the FRAS indicators for the Group. • Assessed the Group’s risk status across the seven risk categories: financial; operational; governance and compliance; health, safety and security; environment; human resource; and cybersecurity, through the Enterprise Risk Management quarterly reports. • Reviewed the MISC Risk Register and assessed the primary risk events to ensure all material and strategic risks faced by the Group are managed and addressed. • Reviewed strategy and project risk assessment related to proposed participation in new projects/tenders and provided appropriate recommendations to mitigate any identified risks. • Reviewed status update on Cybersecurity Defence Measures in MISC. • Assessed the Group’s HSSE performance through quarterly reports. • Assessed the proposed sale of a LNG carrier. • Reviewed the proposals for participation in tenders, including the provision of any bid bonds and/or other securities. • Received updates on the status of ongoing tenders and projects. • Received updates on project delivery chain for heavy engineering business and operations. • Reviewed proposed updates to total capital expenditure and corresponding risk assessment for major projects currently under execution, including risks associated with China’s Zero-COVID policy. • Reviewed periodic project independent review reports for major projects currently under execution. • Reviewed updates on progress of MISC’s investments in the digital ventures and provided the necessary steer on the way forward. Functions Matters considered Governance • Reviewed the BSRC Report, Statement on Risk Management and Internal Control, Corporate Governance Overview Statement and Corporate Governance Report for inclusion in the MISC Integrated Annual Report 2021. Compliance and ethics • Received quarterly updates on compliance and ethics initiatives which cover policy related matters, communication and training, and monitoring and assurance. • Received periodic updates on compliance with MISC’s Regulatory & Legislation Register. • Conducted the annual review of the Modern Slavery Statement. Sustainability • Received quarterly updates on MISC’s sustainability performance in line with MISC Group 2021 – 2025 Sustainability Strategy. • Received the quarterly MISC Sustainability Strategy Progress and Performance Report. • Received quarterly performance reports on ESG indicators through the MISC Sustainability Dashboard. • Received Management’s brief on greenhouse gas (GHG) emissions and MISC fleet CO2 and CO2e intensity projections to 2050. • Endorsed the Group’s Carbon Intensity 2030 Targets and Net-Zero Commitment 2050 as part of MISC’s strategic priority to decarbonise. • Reviewed GHG intensity reduction targets and Net-Zero GHG emission commitment. • Received periodic updates on improvements to the Group’s existing vessels through operational and commercial interventions towards decarbonisation. • Received updates on hazardous and non-hazardous waste performance and targets for MISC operations. • Received updates on MISC’s Heart of the Ocean (reef and sea turtle) conservation initiatives. • Reviewed MISC’s mangrove conservation framework for the research and development of a carbon offset/credit model. DATIN NORAZAH MOHAMED RAZALI Chairperson Board Sustainability & Risk Committee SUMMARY OF THE BSRC’S WORK IN 2022 BOARD SUSTAINABILITY & RISK COMMITTEE REPORT 217 216 Governance Governance MISC Berhad Integrated Annual Report 2022
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