Appointments to the Board
There will be formal and transparent procedures for nomination and appointment of new directors to the Board. In this regard:
- There shall be set up a search and nominations committee of the Board.
- The Board of Directors will formally review its composition and performance at least once every year to ensure that:
i. The mix of membership is appropriate and compatible with the needs of the Board and company.
ii. Every non-executive director commits adequate time to his responsibilities and contributes effectively.[Each non-executive director should commit at least two days per month to his duties as a director and the actual time spent shall be recorded and reflected in the annual report].
- Based on the priority needs of the Board and the Company, the nominations committee will recommend to the Board qualified, competent fit and proper persons to be nominated for election to the Board.
- All directors shall be required to submit themselves for re-election at regular intervals and at least once every three years.
- Service contracts of Executive Directors shall not exceed three years but these are renewable with the approval of shareholders on the recommendation of the Board.
Directors’ Remuneration
In order to avoid potential conflict of interest, the Board of directors shall set up independent remuneration committee to determine the remuneration of respective individual executive directors. The committee shall make a report to the shareholders every year.
The Committee shall:
- Establish a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual executive directors.
- Ensure that the level of remuneration shall be sufficient to attract and retain the quality and calibre of directors needed to run the company successfully while the make up should be so
structured as to link corporate and individual performance.
- Ensure that the company‘s annual report contains a statement of the remuneration policy and details of the remuneration and benefits of each director, including family-related benefits.
Disclosures of Information by Directors
On first appointment and at regular intervals (at least once every year), or at any time when circumstances change, all directors shall, in good faith, disclose to the Board for recording and disclosure to the external auditors, any business or other interests that are likely to create a potential conflict of interest, including:
i. All business interests (direct or indirect) in any other company, partnership or other business venture.
ii. Membership in trade, business or other economic organizations.
iii. Their shareholding, share options and/or other interest in the company.
iv. Any interest (direct or indirect) in any transaction with the company.
v. Any gifts, monies, commissions, benefits or other favours extended or received from whatsoever party in respect of or in relation to any business dealings with the company.
At any time when a director resigns or is removed from office before the expiry of his term, he shall disclose to the company‘s external auditors and if necessary to the shareholders (if the reason for removal or resignation is refusal to compound fraud, corruption or other activities or behaviour incompatible with the shareholders‘ interests) the reasons for his resignation or removal.
Supply of Information to Directors
For Board members to exercise informed, intelligent, objective and independent judgments on corporate affairs, they shall have access to accurate, relevant and timely information. In this regard:
- There shall be established a formal procedure to enable independent directors to take
professional advice on any matter pertinent to their functions if and where they deem it necessary and at the company‘s expense but subject always to the limitations, restrictions and conditions stipulated by the Board.
- All directors shall have unlimited access to the advice and services of the Company Secretary who has a statutory duty to advice the Board on maters of procedures, rules and regulations, and to any other professional officer of the company.
- It is the duty of every director to demand and obtain any information he deems critical to the performance of his duties as a director.
Directors’ Training and Development
The weighty responsibilities placed upon a director, the level of commitment called for and the
fast-changing corporate environment dictates that the company must now increasingly prepare those expected to assume these roles.
It is therefore recommended that all directors shall receive some formal training on their role, duties, responsibilities and obligations as well as Board practices and procedures on first appointment. This is particularly critical for those with no previous Board experience.
It is desirable that all company directors are exposed, at least once every three years, on matters relevant to legal reforms, corporate governance, changing corporate environment, business/commercial risks and other matters that may be of interest in the execution of their role.
It is currently suggested that initial training of directors shall cover, inter alia:
- Role, duties and responsibilities of the Board and directors.
- Rights and obligations of a director.
- Statutory liabilities and duties of a director under criminal and company law.
- Board practices and procedures.
- Corporate strategy and organization.
- Disclosure and communication policies.
- Financial management systems, internal control procedures and internal audit.
- External Audit and the Board.
- The Corporate Environment.
Titany answered the question on October 26, 2021 at 07:49