Board Charter

  1. INTRODUCTION

    The Board of Directors of Sunway Berhad (“the Board”) regards corporate governance as vitally important to the success of the Company’s business and is unreservedly committed to applying the principles necessary to ensure that the following principles of good governance is practised in all of its business dealings in respect of its shareholders and relevant stakeholders:

    • The Board is the focal point of the Company’s corporate governance system. It is ultimately accountable and responsible for the performance and affairs of the Company.
    • All Board members are expected to act in a professional manner, thereby upholding the core values of integrity and enterprise with due regard to their fiduciary duties and responsibilities.
    • All Board members are responsible for achieving a high level of good governance.
    • This Board Charter shall constitute, and form, an integral part of each Director’s duties and responsibilities.

  2. OBJECTIVES

    The objectives of this Board Charter are to ensure that all Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members and the various legislations and regulations affecting their conduct and to ensure that the principles and practices of good corporate governance are applied in all their dealings in respect of, and on behalf of the Company.

    In pursuit of the ideals in this Board Charter, the intention is to exceed "minimum legal requirements" with due consideration to recognised standards of best practices locally and internationally.


  3. THE BOARD

    3.1 Role

    3.1.1 The Board is in charge of leading and managing the Company in an effective and responsible manner. Each Director has a legal duty to act in the best interest of the Company. The Directors, collectively and individually, are aware of their responsibilities to shareholders and stakeholders for the manner in which the affairs of the Company are managed. The Board sets the Company’s values and standards and ensures that its obligations to its shareholders and stakeholders are understood and met.
     
    3.1.2 The Board meets at least once every quarter to facilitate the discharge of their responsibilities. Members of the Management who are not Directors may be invited to attend and speak at meetings on matters relating to their sphere of responsibility.
     
    3.1.3 Duties of the Board include establishing the corporate vision and mission as well as the philosophy of the Company, setting the aims of the Management and monitoring the performance of the Management.
     
    3.1.4 The main functions and roles of the Board are as follows:

    • Setting the objectives, goals and strategic plans for the Group with a view to maximising shareholders’ value.
    • Adopting and monitoring progress of the Company’s strategies, budgets, plans and policies.
    • Overseeing the conduct of the Group’s businesses to evaluate whether the businesses are properly managed.
    • Identifying principal risks of the Group and ensuring the implementation of appropriate systems to mitigate and manage these risks. The Board through the Risk Management Committee, sets, where appropriate, objectives, performance targets and policies to manage the key risks faced by the Group.
    • Considering Management’s recommendations on key issues including acquisitions, divestments, restructuring, funding and significant capital expenditure.
    • Human resources planning and development.
    • Reviewing the adequacy and integrity of the Group’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
     
    3.1.5 The Board has established a procedure whereby the Directors, collectively or individually, may seek independent professional advice in furtherance of their duties at the Company’s expense.

    3.2 Composition and Board Balance

    3.2.1 The Board consists of qualified individuals with diverse experiences, backgrounds and perspectives. The composition and size of the Board is such that it facilitates the making of informed and critical decisions.
     
    3.2.2 At any one time, at least two (2) or one-third (1/3), whichever is higher, of the Board members are Independent Directors.
     
    3.2.3 The Independent Directors provide independent judgement, experience and objectivity without being subordinated to operational considerations.
     
    3.2.4 The Independent Directors help to ensure that the interests of all shareholders, and not only the interests of a particular fraction or group, are indeed taken into account by the Board and that the relevant issues are subjected to objective and impartial consideration by the Board.
     
    3.2.5 The views of the Independent Directors should carry significant weight in the Board's decision-making process.
     
    3.2.6 The Board may appoint a Senior Independent Director to whom shareholders’ concerns can be conveyed if there are reasons that contact through the normal channels of the Chairman or the President have failed to resolve them.
     
    3.2.7 If, on any matter discussed at a board meeting, any Director holds views contrary to those of any of the other Directors, the Board minutes will clearly reflect this.

    3.3 Appointments

    3.3.1 The appointment of a new Director is a matter for consideration and decision by the full Board upon appropriate recommendation from the Nomination Committee.
     
    3.3.2 New Directors are expected to have such expertise so as to qualify them to make a positive contribution to the Board performance of its duties and to give sufficient time and attention to the affairs of the Company.
     
    3.3.3 Directors are required to seek prior consent from the Chairman of the Board before they accept any new directorship in public listed companies outside the Group.
     
    3.3.4 The Company Secretary has the responsibility of ensuring that relevant procedures relating to the appointments of new Directors are properly executed.

    3.4 Directors' Training

    3.4.1 In addition to the Mandatory Accredited Programme (MAP) as required by Bursa Malaysia Securities Berhad (“Bursa Securities”), Board members are also encouraged to attend seminars, training programmes organised by the relevant regulatory authorities and professional bodies to broaden their knowledge and to keep abreast with the relevant changes in laws, regulations and the business environment. The Board will assess the training needs of the Directors and disclose in the Annual Report the trainings attended by the Directors.
     
    3.4.2 The Board is also constantly updated by the Company Secretary on changes to the relevant guidelines on the regulatory and statutory requirements.

    3.5 Re-election

    3.5.1 The Company’s Articles of Association provides that one-third (1/3) of the Board is subject to retirement by rotation at each Annual General Meeting. Each Director shall retire once at least in each three (3) years but shall be eligible for re-election. The Directors to retire in each year are those who have been longest in office since their last election or appointment.

    3.6 Board Meetings and Supply of Information

    3.6.1 The Board meets regularly at least once every quarter to review financial, operational and business performances.
     
    3.6.2 Notices and agenda of meetings duly endorsed by the Chairman together with the relevant board papers are normally given at least one (1) week prior to the meetings for the Board to study and evaluate the matters to be discussed.
     
    3.6.3 The board papers provided include inter alia, the financial results, business plan and budget, progress report on the Company’s developments, minutes of meetings of Board Committees, regulatory/statutory updates and other operational and financial issues for the Board’s information and/or approval.

  4. CHAIRMAN AND PRESIDENT

    There is a balance of power and authority between the Chairman and the President with a clear division of responsibility between the running of the Board and the Company’s business respectively. The positions of Chairman and President are separated and clearly defined.

    4.1 Chairman

    4.1.1 The Chairman is responsible for leadership of the Board in ensuring the effectiveness of all aspects of its role. The Chairman is responsible for:

    1. leading the Board in setting the values and standards of the Company;
    2. maintaining a relationship of trust with and between the Executive and Non-Executive Directors;
    3. ensuring the provision of accurate, timely and clear information to Directors;
    4. ensuring effective communication with shareholders and relevant stakeholders; and
    5. ensuring that members of the Board work together with the Management in a constructive manner to address strategies, business operations, financial performance and risk management issues.
     
    4.1.2 The Chairman is responsible for ensuring the integrity and effectiveness of the governance process of the Board.
     
    4.1.3 The Chairman ensures that the Board members are properly briefed on issues arising at board meetings and that available information on an issue is presented to the Board.
     
    4.1.4 The Chairman will act as facilitator at board meetings to ensure that no Board member, whether executive or non-executive, dominates discussion, that appropriate discussion takes place and that relevant opinion among Board members is forthcoming.
     
    4.1.5 Questions arising at any board meeting shall be decided by a majority of votes. In the case of an equality of votes, the Chairman shall have a second or casting vote, except that where two (2) Directors form a quorum and only two (2) Directors are present, or where there are only two (2) Directors who are competent to vote on the question at issue, the Chairman shall not have a casting vote.

    4.2 President

    4.2.1 The President is the conduit between the Board and the Management in ensuring the success of the Company’s governance and management functions.
     
    4.2.2 The President has the executive responsibility for the day-to-day operation of the Company's business, and the execution of the agreed business policies and directions set by the Board and of all operational decisions in managing the Company.
     
    4.2.3 All Board authorities conferred on the Management is delegated through the President and this will be considered as the President’s authority and accountability as far as the Board is concerned.

  5. BOARD COMMITTEES

    The Board appoints the following Board Committees with specific terms of reference:

    • Audit Committee
    • Nomination Committee
    • Remuneration Committee

    Independent and Non-Executive Directors play a leading role in these Committees.

    5.1 Audit Committee

    5.1.1 The Audit Committee comprises three (3) members, all of whom are Independent Directors.
     
    5.1.2 No alternate Director can be appointed as a member of the Audit Committee.
     
    5.1.3 The Audit Committee will elect an Independent Director from amongst them as its Chairman.
     
    5.1.4 The functions and duties of the Audit Committee are as follows:-

    1. To review the following and report the same to the Board:

      1. With the External Auditors:

        1. the audit plan and audit report and the extent of assistance rendered by employees of the Company;
        2. their evaluation of the system of internal controls;
        3. the audit fee and on matter concerning their suitability for nomination, appointment and re-appointment and the underlying reasons for resignation or dismissal as External Auditors;
        4. the management letter and management’s response; and
        5. issues and reservations arising from audits.

      2. With the Internal Auditors:

        1. the Internal Audit Charter which defines the independent purpose, authority, scope and responsibility of the internal audit function;
        2. the adequacy and relevance of the scope, functions, competency and resources of the internal audit function and the necessary authority to carry out its work;
        3. the audit plan of work programme and results of internal audit processes including recommendations and actions taken;
        4. the extent of cooperation and assistance rendered by employees of the Company; and
        5. the appraisal of the performance of the internal audit function including that of the senior staff and any matter concerning their appointment and termination.

      3. The quarterly results and year end financial statements prior to the approval by the Board, focusing particularly on:

        1. changes in and implementation of major accounting policies and practices;
        2. significant and unusual issues;
        3. going concern assumption; and
        4. compliance with accounting standards, regulatory and other legal requirements.

      4. The major findings of investigations and management response.

      5. The propriety of any related party transaction and conflict of interest situation that may arise within the Company or the Group including any transaction, procedure or course of conduct that raises questions of management integrity.

    2. To report any breach of the Listing Requirements of Bursa Securities which has not been satisfactorily resolved, to Bursa Securities.

    3. To prepare the Audit Committee Report for inclusion in the Company’s Annual Report.

    4. To review the disclosure statements of the Board and other disclosures forming the contents of annual report spelt out in the Listing Requirements of Bursa Securities, as well as to review the Company’s Annual Report and recommend for the Board’s approval.
     
    5.1.5 The Audit Committee meets on a quarterly basis to carry out its functions. However, upon the request of any member of the Committee, non-member Directors, the Internal or External Auditors, the Chairman shall convene additional meeting to consider the matters brought to its attention.
     
    5.1.6 The President, Chief Financial Officer, Internal Auditors and External Auditors attend the meetings at the invitation of the Audit Committee.
     
    5.1.7 The Board will review the performance of the Audit Committee once in every three (3) years.

    5.2 Nomination Committee

    5.2.1 The Nomination Committee comprises the Independent Non-Executive Directors.
     
    5.2.2 The Nomination Committee is responsible for identifying and making recommendations for any appointment and re-election of Board members. The Committee also assesses the effectiveness of the Board as a whole as well as the performance of each Director.

    5.3 Remuneration Committee

    5.3.1 The Remuneration Committee comprises mainly Non-Executive Directors and the Chairman is an Independent Non-Executive Director.
     
    5.3.2 The Remuneration Committee is responsible for recommending to the Board, the proposed remuneration for Directors and the renewal of the terms of Employment Contracts for Executive Directors, with the aim of ensuring that the Company attracts and retains the Directors needed to run the Group successfully.

  6. REMUNERATION LEVELS OF DIRECTORS

    6.1 The remuneration of the Executive Directors is structured on the basis of linking rewards to corporate and individual performance. For Independent Non-Executive Directors, they receive a basic fee, an additional fee for serving on the Board Committee(s) and an attendance fee for participation in meetings of the Board and any of the committee meetings.
     
    6.2 Information prepared by independent consultants and survey data on the remuneration practices of comparable companies are taken into consideration in determining the remuneration packages for Executive and Non-Executive Directors.
     
    6.3 The Board as a whole resolves on the fees for the Non-Executive Directors with individual Directors abstaining from decisions in respect of their individual remuneration. The fees payable to the Non-Executive Directors are subject to the approval of shareholders.

  7. FINANCIAL REPORTING

    7.1 Transparency

    7.1.1 In presenting the annual financial statements, Annual Report and quarterly results to shareholders, the Board aims to provide a balanced and understandable assessment of the Group’s financial position, performance and prospects.
     
    7.1.2 The Board ensures that the financial statements are prepared so as to give a true and fair view of the current financial status of the Company in accordance with the approved accounting standards. The Board is assisted by the Audit Committee to oversee the Group’s financial reporting processes and the quality of its financial reporting.

    7.2 External Auditors

    7.2.1 The Board has established formal and transparent arrangements for considering how financial reporting and internal control principles will be applied and for maintaining an appropriate relationship with the External Auditors through its Audit Committee.
     
    7.2.2 The Audit Committee also keeps under review the scope and results of the audit and its cost effectiveness as well as the independence and objectivity of the External Auditors. The Board ensures that the External Auditors do not supply a substantial volume of non-audit services to the Company.
     
    7.2.3 Appointment of the External Auditors is subject to approval of shareholders at general meeting of the Company. The External Auditors have to retire during the Annual General Meeting of the Company every year and be re-appointed by shareholders for the ensuing year.

    7.3 Internal Controls and Risk Management

    7.3.1 The Company has an in-house internal audit function, which critically reviews all aspects of the Company’s activities and its internal controls. Comprehensive audits of the practices, procedures, expenditure and internal controls of all business units and subsidiaries are undertaken on a regular basis. The Head of Internal Audit has direct access to the Board through the Chairman of the Audit Committee.
     
    7.3.2 The Board ensures the system of internal controls is reviewed on a regular basis.
     
    7.3.3 The Audit Committee receives reports regarding the outcome of such reviews on a regular basis.

  8. ANNUAL GENERAL MEETING (“AGM”)

    8.1 The Company regards the AGM as an important event in the corporate calendar of which all Directors and key senior executives should attend.
     
    8.2 The Company regards the AGM as the principal forum for dialogue with shareholders and aims to ensure that the AGM provides an important opportunity for effective communication with, and constructive feedback from the Company's shareholders.
     
    8.3 The Chairman encourages active participation by the shareholders during the AGM.
     
    8.4 The Chairman and where appropriate, the President responds to shareholders’ queries during the AGM.

  9. INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION

    9.1 The Board values constant dialogue and is committed to clear communication with shareholders and investors. In this respect, as part of the Group’s active investor relations programme, discussions and dialogues are held with fund managers, financial analysts, shareholders and the media to convey information about the Group’s performance, corporate strategy and other matters affecting shareholders’ interests.
     
    9.2 The Company communicates information to shareholders and the investing community through announcements that are released to Bursa Securities via Bursa LINK. Such announcements include the quarterly results, material transactions and other developments relating to the Group requiring disclosure under the Listing Requirements of Bursa Securities. Communication channels with shareholders are also made accessible via:-

    • Press and analysts’ briefings;
    • One-on-one/group meetings, conference calls, investor luncheons, domestic/overseas roadshows and conferences;
    • Annual Reports;
    • Press releases on major developments; and
    • The Company’s website at www.sunway.com.my.
     
    9.3 In addition to published Annual Report sent to all shareholders and quarterly results announced to Bursa Securities, the Company has established a website at www.sunway.com.my from which investors and shareholders can access for information.
     
    9.4 While the Company endeavours to provide as much information as possible to its shareholders and stakeholders, it is mindful of the legal and regulatory framework governing the release of material and price-sensitive information.

  10. RELATIONSHIP WITH OTHER STAKEHOLDERS

    In the course of pursuing the vision and mission of the Company, the Board recognises that no company can exist by maximising shareholders value alone. In this regard, the needs and interests of other stakeholders are also taken into consideration.

    10.1 Employees

    10.1.1 The Board acknowledges that the employees are invaluable assets of the Company and play a vital role in achieving the vision and mission of the Company.
     
    10.1.2 The Company adopts comprehensive and documented policies and procedures with respect to occupational safety and health with the objective of providing a safe and healthy working environment for all employees.

    10.2 Environment

    10.2.1 The Board acknowledges the need to safeguard and minimise the impact to the environment in the course of achieving the Company’s vision and mission.
     
    10.2.2 The Company adopts comprehensive and documented policies and procedures as part of its commitment to protect the environment and contribute towards sustainable development.
     
    10.2.3 The Company supports initiatives on environmental issues.

    10.3 Corporate Responsibility

    10.3.1 The Board acknowledges that the Company should play a vital role in contributing towards the welfare of the community in which it operates.
     
    10.3.2 The Company adopts comprehensive and documented policies and procedures towards responsible marketing and advertising of its products and services.
     
    10.3.3 The Company supports charitable causes and initiatives on community development projects.

  11. COMPANY SECRETARY

    11.1 The Board appoints the Company Secretary, who plays an important advisory role, and ensures that the Company Secretary fulfils the functions for which he/she has been appointed.
     
    11.2 The Company Secretary is accountable to the Board on all governance matters.
     
    11.3 The Company Secretary is a central source of information and advice to the Board and its Committees on issues relating to compliance with laws, rules, procedures and regulations affecting the Company.
     
    11.4 The Company Secretary must keep abreast of, and inform the Board of current governance practices.
     
    11.5 The Board members have unlimited access to the professional advice and services of the Company Secretary.