Corporate Governance Statement

The Board of Directors (“the Board”) is committed to ensure that the highest standards of corporate governance are practiced throughout the Group as a fundamental part of discharging the Board’s responsibility to protect and enhance long term shareholders value and the financial performance of the Group, whilst taking into account the interests of other stakeholders. The Board is working towards ensuring full application of the requirements, principles and best practices of the Malaysian Code on Corporate Governance 2012 (the “Code”). The Board is pleased to report on how the Company and Group have applied the principles set out in the Code (“Principles”) to its particular circumstances, having regard to the recommendations stated under each Principle (“Recommendations”).

The Board of Directors

The Principal Responsibilities

The Group is led by a Board of Directors (“the Board”) who is responsible to the shareholders for the management of the Group.

The Board is responsible for the Group’s overall strategy and objectives, its acquisition and divestment policies, major capital expenditure, establishing goals and monitoring the achievement of the goals through strategic action plans and careful stewardship of the Group’s assets and resources and the consideration of significant financial matters. The Board monitors the decision and actions of the Executive Directors and the performance of the Group to gain assurance that profess is being made towards the corporate purpose within the limits imposed through the Group’s governance assurance framework.

Board Charter

The Board has established clear functions reserved for the Board and those delegated to Management in the Board Charter (the “Charter”) which serves as a reference point for Board’s activities. The Charter provides guidance for Directors and Management on the responsibilities of the Board, its Committees and requirements of Directors which are subject to periodical review to ensure consistency with the Board’s strategic intent as well as relevant standards of corporate governance. Salient terms of the Charter will be made available at the Company’s website at www.cgb.com.my.

Board Composition and Independence

The Board comprises a Managing Director, two Executive Director, two Independent Non-Executive Directors and one Non-Independent Non-Executive Director. This composition allows for the applying of independent judgment on issues of strategy, performance, resource utilization and standards of conduct, all of which are vital to the Group. The mixture of technical, industry expertise, entrepreneurial, financial and business skills of the Directors also enhances the effectiveness of the Board.

There is a balance of power and authority in the Board, with three Executive Directors and two Independent Non-Executive Directors and one Non-Independent Non-Executive Director. The Company has thus satisfied the Main Market Listing Requirements (“LR”) of Bursa Malaysia Securities Berhad of having at least one-third of the Board members as Independent Non-Executive Directors.

The Non-Executive Directors monitor the Group and the Management. The Board plays a significant role in the development of the Group’s policies. There is an adequate degree of independence and practice in place to allow Directors to meet and actively exchange views to ensure that the Board can effectively assess the direction of the Group and the performance of its management.

Roles and Responsibilities of the Board

The roles of the Chairman and the Managing Director are distinct and segregated with responsibilities clearly drawn out to ensure a balance of power and authority. The Chairman is responsible for ensuring Board effectiveness and conduct, whilst the Managing Director is primarily responsible for managing the Group’s day-to-day operations and with his expert and intimate knowledge of the business of the Group, he is able to efficiently practice “hands on” management in his specific areas of responsibilities. In addition, to ensure the effective discharge of its functions and responsibilities, the Board delegates the day-to-day management of the Group’s business to the Management and had set and approved business authority limits which set out relevant matters. This authority limits are reviewed and revised as and when required, to ensure an optimum structure for efficient and effective decision-making in the Group.

The Non-Executive Directors are credible professionals of caliber, who play key supporting roles by contributing their knowledge, guidance and experience towards making independent judgement on issues of strategies, performance, resources and standards of conduct. The Executives and Non-Executive Directors together ensure that the strategies proposed by the management are fully discussed and examined and the long-term interests of the shareholders, employees, suppliers and customers are taken into account. The Company satisfied the Recommendations of the Code which states that the Chairman must be of a non-executive member of the Board.

The Company has also formalized a set of ethical standards through a code of conduct, which is subject to periodical review, to ensure Directors practice ethical, businesslike and lawful conduct, including proper use of authority and appropriate decorum when acting as Board members.

Where any conflict of interests arises, it is a mandatory practice for the director concerned to declare his interest and abstain from the decision making process.

Key matters which are reserved for the Board’s approval are as follows:

  • Review and Approval of corporate, strategic directions and financial plans of the Group.
  • Monitor financial performance including approval of annual and interim financial reports.
  • Approval of annual budgets
  • Approval of material acquisitions, and disposal of undertaking and properties or any significant which exceeds the authority limits delegated to the Managing Director or management.
  • Changes to the management and control structure within the Company and its subsidiaries.
  • Appointment of all other Board members, Board Committee members, CFO and the Company Secretary.
  • Any matters and/or transactions that fall within the ambit of the Board pursuant to the Companies Act, 1965, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the Company’s Articles of Association.
  • Internal Control System.
  • Succession planning for senior management.
  • Assume responsibility for good corporate governance.

The Board also delegates and confers some of its authorities and discretion to the Executive Directors as well as relevant Board Committees. The Board Committees are entrusted by the Board with specific responsibilities to oversee the Group’s affairs, with authority to act on behalf of the Board in accordance with their respective Terms of Reference (“TOR”). Any key issues and decisions arising from the Board Committees will be reported and tabled to the Board for approval, if required