Board Responsibilities

The board charter sets out matters reserved for the Board’s decision and outlines the Board’s roles and responsibilities. The board charter was updated in 2021 to include the Board’s responsibilities on environmental, social and governance (“ESG”) matters pertinent and material to the Group and its stakeholders, and effective stakeholder communication and engagement. The schedule of matters for the Board’s decision includes amongst others, the overall Group strategy and direction; major policies, board and board committee appointments; approval of financial statements, corporate plans and budgets, material acquisitions and disposals of assets, and major investments.

The Board has oversight of the overall performance and control of the Group, setting and reviewing the strategic direction of the Group, and monitoring the implementation by management of that strategy. Specific responsibilities are delegated to the three main Board committees, namely the Audit, Nomination and Remuneration Committees. These committees operate within Board-approved terms of reference, and have authority to examine issues and report to the Board with their findings and recommendations.

The roles of the Chairman and Managing Director are separate. The non-executive Chairman’s responsibilities include overseeing the governance process, provide board leadership on policy formation and decision-making, as well as ensuring that appropriate steps are taken to provide effective communication with stakeholders. The Managing Director is responsible for overseeing the development and operations of the Group’s businesses, and implementing corporate strategies and objectives adopted by the Board.

The Board sets the minimum standards of conduct and personal behaviour; to maintain a uniform set of values and ethics within the Group, a Group-wide code of ethics and code of conduct has been adopted, and embedded in the respective Group employee handbooks. A whistle-blower policy adopted by the Company in 2015 is incorporated in the employee handbook, and has also been adopted by the respective business units throughout the Group.

Anti-bribery and corruption

The directors of PPB are committed to complying with anti-bribery and corruption laws in Malaysia and other countries in which the Group operates. The Group Anti-Bribery and Corruption (“ABAC”) Policy is applicable to all directors and employees of PPB Group as well as business associates. The ABAC Policy is communicated to all parties with whom the Group has business dealings, and is accessible to the public via publication on the Group entities’ corporate websites. The Group ABAC Policy may be viewed at the Company’s website: https://www.ppbgroup.com/index.php/governance-sustainability/code-policies/group-anti-bribery-and-corruption-policy

The ABAC Policy sets out PPB’s stance against bribery and corruption, managing conflicts of interest, policy on gifts, hospitality and entertainment, donations and sponsorship, handling facilitation payment requests and whistleblowing. There is also an ABAC manual to provide more detailed guidance to employees.

The Board is responsible for the oversight of the ABAC/Integrity programme, and has delegated authority and day-to-day decisions to the Group Integrity Steering Committee.

All Directors also attended the annual ABAC training session conducted by the Company’s Risk Management and Integrity Department.

Governing Sustainability

The Board has oversight responsibility to deliver sustainable value to stakeholders through the principles, policies, objectives and strategies of the Group. In carrying out this responsibility, the Board is supported by the Sustainability Steering Committee (“SSC”) which was formed in 2017. The SSC is chaired by the Managing Director of PPB and comprises the Group Chief Sustainability Officer, PPB’s Department Heads, as well as the Heads and Sustainability Officers across all business segments. The respective business units set, monitor and review ESG/ sustainability targets, and report the performance/results achieved to the board through the SSC.

Our Group Strategic Plan (“GSP”) (2019-2023) includes sustainability goals, strategies and plans of the various business units. A review of the GSP is underway which takes into consideration inter alia, new trends and developments, and changes within our businesses. The Group has also developed a 5-year sustainability roadmap (2022-2026) and action plans which cover our four sustainability pillars below:

• Environmental impact
• Working environment
• Community investment
• Marketplace engagement

The roadmap, which translates the Group’s vision and strategy into targets and initiatives to be achieved within the timelines, was also developed to aid the Group to achieve a stronger standing in our ESG practices. The roadmap and plans are under the purview of the Board and the SSC.

Further details of the Group’s sustainability-related matters are set out in the Sustainability Report which is available on the websites of Bursa Malaysia (http://www.bursamalaysia.com) and PPB (https://www.ppbgroup.com).

Board and Committee meetings

The meetings of the Board and Board Committees held in FY2021 and attendance record are set out below:

N/A – Not applicable

In exercising their duties, directors have access to information within the Company and the support of the company secretary. The company secretary also updates directors on statutory, regulatory and related governance requirements relating to the discharge of their duties and responsibilities.

Board Composition

The Board comprises a majority of independent directors; of the seven Board members in FY2021, four are independent. The remainder of the Board comprised two non-independent non-executive directors, and the Managing Director. Subsequent to the year-end, Tengku Nurul Azian binti Tengku Shahriman was appointed as an additional independent director on 1 March 2022.

The independent directors are able to carry out their duties and express their views unfettered by familiarity, or business or other relationships. They provide skills, competencies as well as broader views to enhance the Board’s effectiveness.

The Board has agreed that annual shareholders’ approval be sought to extend the tenure of any director who has served for more than nine years as an independent director. Dato’ Capt Ahmad Sufian @ Qurnain bin Abdul Rashid and Mr Soh Chin Teck’s tenures as independent directors were further extended at the 52nd Annual General Meeting (“AGM”) of the Company in 2021 until the conclusion of the next AGM. The Nomination Committee (“NC”) and the Board were satisfied that Dato’ Sufian and Mr Soh are able to exercise independent judgment and act in the best interests of the Company, and recommended the continuation of Dato’ Sufian and Mr Soh’s term as independent directors beyond 12 years and 9 years respectively, for shareholders’ approval at the 52nd AGM of the Company.

The Board strives to achieve a balance and mix of skills, experience and perspectives amongst its directors, to collectively bring a range of experience, business, financial and technical expertise for effective oversight of the Group’s diversified businesses, and fulfil the Board’s duties and responsibilities.

Annual re-election of directors

In accordance with the Company’s Constitution, one third of the directors retire by rotation at the AGM every year, and are subject to re-election by members.

The NC also reviews annually the training undertaken by Directors and recommends topics which are relevant or of interest to the Board to keep abreast with business and regulatory developments. In 2021, the Directors attended PPB’s annual in-house training session for directors and senior management, and the topics included the following:

• Updated Malaysian Code on Corporate Governance 2021 and Securities Commission Guidelines on conduct of directors of listed corporations and their subsidiaries.
• Environmental, social & governance (“ESG”) trends.
• Cyber-security awareness.

In addition to the above, the following Directors attended other training sessions during the year, and the topics included:

The criteria for evaluation of candidates for appointment as directors (and senior management positions) include their qualification, occupation, professional and business experience, and is subject to the Company/Group’s requirements and operating environment. Prospective candidates are not discriminated based on gender, age, cultural background etc.

The Group recognises the importance of identifying and developing potential leaders and managers to fill key positions (whether on the board or senior management) in the Company and Group, from both internal and external sources. This is an on-going process based on the Group’s short and longer term needs in terms of skills, expertise, knowledge and experience.

Board evaluation

Candidates for board appointments are reviewed by the NC before recommendation to the Board. The NC is chaired by Encik Ahmad Riza bin Basir, an independent director.

The NC reviews annually the Board size and composition, as well as the mix of Directors necessary for the successful direction of the Company and Group’s businesses. This includes an annual Board assessment, an assessment of the independent directors, as well as an annual review of the Audit Committee. For the year under review, the Board is satisfied with the present number and composition of its members and is of the view that the Board had discharged its duties and responsibilities effectively. The Board assessment for 2021 covered their experience and expertise/knowledge in the following areas:

• Business knowledge
• Accounting and financials
• Corporate governance, risk management and internal controls
• Legal and regulatory
• Human capital
• Information technology knowledge
• ESG/sustainability

Gender diversity

There is presently no formal gender diversity policy. The Board is of the opinion that it is important to recruit and retain the best available talent, taking into account the mix of skills, experience, knowledge and independence, and based on the Group’s needs and operating environment. Nonetheless, the Board will endeavour to increase board gender diversity, and it will be one of the factors to be considered in evaluating prospective candidates when a board vacancy arises.

Remuneration

The Board reviews the overall remuneration of executive and non-executive directors at regular intervals to attract and retain directors with the relevant experience and expertise.

The Managing Director’s remuneration is determined after taking into account his duties and responsibilities as Managing Director of PPB, his roles in various capacities in the main business units, and the Group’s performance for the year. For non-executive directors, the remuneration reflects their roles and responsibilities, and the recommendation thereof is a matter for the Board as a whole subject to shareholders’ approval.

The individual directors’ total remuneration paid/payable for FY2021 on a Group and Company basis which includes (where applicable) salary, bonus, fees, allowances etc are set out below:

The details/breakdown of the above directors’ remuneration are set out in the Corporate Governance Report issued together with this Annual Report.

The remuneration of the top five senior management of the PPB Group (excluding those who are also Directors of PPB) paid/payable for FY2021 on an aggregated basis in RM50,000 bands is as follows:

The Group senior management remuneration is commensurate with their duties and responsibilities, the performance of the respective company or business entity, and the operating environment. The Board is of the opinion that the disclosure of the senior management’s names and remuneration components would not be in the best interest of the Group due to confidentiality, business and personal security concerns. The above disclosure is deemed sufficient to enable stakeholders to assess senior management remuneration vis-a-vis the Group’s performance.

Audit Committee

The Audit Committee (“AC”) comprises entirely of independent directors; the AC Chairman is also separate from the Chairman of the Board.

The principal functions of the AC include the following:

• Ensure that the financial statements comply with applicable financial reporting standards, and assess the suitability and independence of external auditors.
• Assess the adequacy and effectiveness of the Group’s enterprise-wide risk management and internal control framework.

The members of the AC possess a mix of skills, knowledge and experience to enable them to discharge their duties and responsibilities pursuant to the AC’s terms of reference, which are available on the Company’s website. An annual self and peer evaluation of the AC is carried out and reviewed by the NC. The Audit Committee Report on pages 69 to 71 of the annual report provides more details on the AC’s functions during the year.

Risk management and internal control framework

Responsibility for ensuring a sound internal control system and reviewing the effectiveness of the system lies with the Board. The Group’s system of risk management and internal control is designed to manage, rather than eliminate, the risk of failure to achieve the Company’s corporate objectives and safeguard the Group’s assets. It therefore provides reasonable but not absolute assurance against material misstatement, fraud or loss.

A risk management and internal control framework has been established which covers the Group’s risk assessment process and internal controls, with oversight and reporting on the effectiveness of this function. There were no significant risk management and internal control failings or weaknesses which resulted in material losses or contingencies during the financial year.

The Statement on Risk Management and Internal Control set out on pages 73 to 74 of the 2021 Annual Report provides a more detailed description of the state of risk management and internal controls.

Communication with stakeholders

PPB’s Corporate Disclosure Policy (“CDP”) sets out the disclosure policies and procedures, and provides a framework to communicate effectively with stakeholders and the public generally. The policy may be viewed at the Company’s website: https://www.ppbgroup.com/index.php/governance-sustainability/code-policies/corporate-disclosure-policy

The Company seeks to provide stakeholders with timely, accurate, clear and equal access to material information on the Company’s performance and operations. The principal sources of information disseminated by the Company during the year include the annual report, quarterly investor updates, news releases and company website.

PPB’s investor relations programme is directed at both individual and institutional investors, with the objective to maintain ongoing awareness of the Company’s performance amongst shareholders, media and the investing community. This includes twice-yearly analyst briefings after the release of the half-yearly and final results together with media conferences. The Company makes every attempt to meet requests for meetings or information from the investing community.

In respect of integrated reporting , the Board has agreed to consider its adoption subject to a study by management on the feasibility, requirements etc. This will be reviewed annually.

Conduct of general meetings

The 52nd Annual General Meeting (“AGM”) held on 11 May 2021 was conducted entirely via live streaming and online remote poll voting. This enabled shareholders to participate and vote remotely, notwithstanding the imposition of the MCO and observance of safety requirements.

The notice of the 52nd AGM was sent to members 28 days before the meeting together with the Annual Report. The AGM notice sets out the resolutions to be tabled and includes explanatory notes and other relevant information on the matters to be discussed and decided at the AGM. Shareholders were able to exercise their votes either in person, or appoint a representative or proxy to attend and vote on their behalf using remote participation and voting facilities. Voting was by poll, conducted electronically and verified by an independent scrutineer.

It is the Company’s practice that all Board members including the respective chairs of the various committees attend AGMs and are available to deal with any questions on matters under their purview. At the meetings, shareholders can express their views or raise questions relating to the Group’s financial performance and business operations.

Shareholders submitted their questions (in real time) using the query box during the meeting. Questions from shareholders relating to the Company’s financial and business operations were dealt with by the Chairman, the Managing Director and Chief Financial Officer of the Company.

The minutes of the 52nd AGM were also uploaded to PPB’s website and can be assessed via the link below:
https://www.ppbgroup.com/images/pages/investor-relations/annual_general_meeting/52nd_agm/Minutes_of_52nd_PPB_AGM.pdf

Focus Areas on Corporate Governance

A review of the Group Strategic Plan is underway which includes an evaluation of the various business units and takes into consideration inter alia, new trends and developments, and enhanced ESG considerations. As part of our annual review, we will also look further into various other recommended corporate governance practices which can be further strengthened, as elaborated in our Corporate Governance Report.

This statement was approved by the Board on 24 March 2022.