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The Board Of Directors

1. ESTABLISHED CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD OF DIRECTORS AND MANAGEMENT



BOARD OF DIRECTORS

Separation of Power between the Board and Management


The Group has documented clear policies for identifying and separating the functions of the Board and Management, Chairman as well as the President and Managing Director in ensuring the smooth running of the Group's business and operations. These are enshrined in the Board Policy Manual, a copy of which is made available to all Directors of the Company. The roles of the Chairman of the Board, President and Managing Director, Executive Director and the eight (8) Non-Executive Directors are kept separate with a clear division of responsibilities in line with best practices. The functions of the Chairman as well as those of the President and Managing Director are clearly segregated to ensure that there is a balance of power and authority. Dato' Kamaruzzaman Abu Kassim as the Chairman continues to lead the Board by providing oversight over the strategies and business affairs of the Group. He is also the President and Chief Executive of Johor Corporation ("JCorp") and has never held the position of President and Managing Director of the Company. Dato' Amiruddin Abdul Satar, the President and Managing Director of the Company, is responsible for leading the Management in the execution of broad policies, strategies and action plans approved by the Board. He regularly engages the Board to report and discuss the Group's business performance and developments, including all strategic matters affecting the Group. The Board has also developed and approved the Corporate Objectives for 2015, for which the President and Managing Director has the responsibility to achieve them. It also forms the basis where the performance of Management will be assessed. Board Structure, Composition and Balance


The composition of the Board of Directors is as follows:

  • One (1) Non-Independent Non-Executive Chairman;
  • Two (2) Non-Independent Non-Executive Directors;
  • Six (6) Independent Non-Executive Directors;
  • One (1) President and Managing Director; and;
  • One (1) Executive Director.

The present size and composition remains well-balanced and is made up of professionals with a wide range of knowledge and experience in business, operations and finance, all relevant to the direction of a large, expanding Group. The profiles of all Board Members, comprising of their qualification, experience and calibre are disclosed on pages 74 to 85 of this Annual Report.

The Company's Chairman is a Non-Independent Non-Executive Director and there are six (6) Independent Non-Executive Directors out of the eleven (11) Board members.

As the Chairman is representing JCorp which has a substantial interest in the Company, he is well-placed to act on behalf of and in the best interest of all shareholders. The Board believes that the current Chairman and Board members comprise of a well-balanced mix of professionals with a diverse range of knowledge and experience which are relevant to guide the Company and the Group.

The Independent Non-Executive Directors do not engage in any business dealings or the day-to-day management of the Company. Hence, they are capable of exercising independent judgement and act in the best interests of the Company and its shareholders. All Independent Non- Executive Directors are qualified professionals in their respective fields and carry with them vast industry experience along with subject matter expertise in medical, legal, accounting and business management.

The current Board composition complies with Paragraph 15.02 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ("MMLR") and Recommendation 3.5 of the MCCG 2012, whereby six (6) out of eleven (11) members are Independent Non-Executive Directors who meet the criteria of "Independent Director", as defined in Paragraph 1.01 of the MMLR. The high number of Independent Non-Executive Directors further provides for diversity of views as well as effective check and balances in the functioning of the Board.

Although all the Directors have equal oversight responsibilities for the Group, the role of these Independent Non-Executive Directors is particularly important in ensuring that all business strategies proposed by the Management are fully and independently deliberated and assessed, takes into account the long term interest of, not only the shareholders, but also employees, customers, suppliers and the many communities in which the Group operates.

Board Duties and Responsibilities

All members of the Board contribute significantly in the areas of formulation of strategic direction and policies, performance monitoring and allocation of resources and enhancement of controls and governance. As prescribed by the MCCG 2012, the Board assumes six (6) principal stewardship responsibilities as follows:-

1. Reviews and approves the strategic business plans for the Group

The Strategic Business Plan for the period 2016 ?2020 was tabled, discussed and approved by the Board at its meeting on November 2015. Additionally, on an ongoing basis, the Board will assess whether projects, purchases and sales of equity as well as other strategic considerations proposed at Board meetings during the year, are in line with the objectives and broad outline of the adopted strategic plans.

2. Oversees the conduct of the Company's business to evaluate whether the business is being properly managed

The Board has the responsibility to oversee and review the Group's annual budget, operational and financial performance on a periodic basis against the budget.
At Board meetings, all operational matters will be discussed and the appropriate consultation will be sought, where necessary. Periodically, the performance of the Group will be benchmarked against the performance of its competitors.

3. Identifies and manages principal risks while ensuring the implementation of appropriate systems to manage these risks

Various Committees, in relation to clinical and operational risks, have been set up under the Medical Advisory Committee. The functions of each Committee have been disclosed in the Statement on Risk Management and Internal Control on pages 184 to 189 of this Annual Report.

4. Succession planning, which includes the appointment, training, determination of compensation levels and where appropriate, the replacement of senior management

The Board will deliberate on the latest plans and actions taken in respect of the succession planning as provided by the Group Talent Management Services. More importantly, after several years of continuous efforts in emphasising and communicating the importance of succession planning, the subject has now become an on-going agenda, reviewed and discussed at various high-level management and operational meetings of the Group. An overview of the Group Talent Management Services and its importance to the Group are elaborated on pages 158 to 164 of this Annual Report.

5. Develops and implements the Investor Relations programme or shareholder communications policy for the Group

The Group has introduced many activities with regard to engagement and communication with investors to ensure that they are well-informed about the Group affairs and developments. Details of Investor Relations activities are disclosed on pages 63 to 65 and 182 to 183 of this Annual Report.

6. Reviews the adequacy and integrity of the Group's internal controls and management information systems, including compliance with applicable laws, regulations, rules, directives and guidelines

The Board's function with regards to fulfilling these responsibilities effectively are supported and reinforced through the various Committees established at both Board and Management levels. Aided by the Group Internal Audit division that operates independently, the active functioning of these Committees through their regular meetings and discussions provide not only a strong check and balance, but also reasonable assurance on the adequacy of the Group's internal controls. Detailed discussion of these functions are elaborated in the Statement on Risk Management and Internal Control; and the Audit Committee Report on pages 190 to 197 of this Annual Report.

The Board is also responsible in ensuring the smooth function of core processes, board governance, corporate values and ethical oversight. The Independent Non-Executive Directors will further provide an independent and objective perspective that acts as an effective check and balance mechanism in deliberating the above mentioned.

Formalised Ethical Standards through Code of Ethics

Terms of reference have been developed for both the Board and Management, defining their respective authorities, duties and responsibilities, and this is covered by the Group's Code of Conduct and Business Ethics.

While the Chairman encourages full discussion and deliberation of issues affecting the Group by all Board Members, the Board has also appointed Zainah Mustafa, the Independent Non-Executive Director who is also the Chairman of the Audit Committee, to whom concerns pertaining to the Group may be conveyed by shareholders and other stakeholders.

The Directors adhere to the Code of Ethics which is contained in the Board Policy Manual, the important aspects of which are as follows:

  • Members must represent non-conflicted loyalty to the interests of the Group;
  • Members must avoid conflict of interests with respect to their fiduciary responsibilities;
  • Members may not attempt to exercise individual authority over the Group unless it is explicitly provided for in the Board Policy Manual; and
  • Members will respect the confidentiality appropriate to issues of a sensitive nature.

Strategies Promoting Sustainability

The Board believes that developing sustainable business practices is not only critical to the future of the Group, but also for the benefit of future generations as well. For the Group, sustainability means operating a competitive and ethical business through good processes and policies which are applied by competent and responsible employees.

The rewards given to the employees are not only denominated by compensation and benefits but also through structured professional development and career progression plans. The Group implements a system of rewards based on the "pay for performance" concept.

Employees are rewarded based on their contributions and level of productivity towards the Group objectives.

Access to Information and Advice

Prior to each Board meeting, the Board Report will be circulated to all Directors so that each Director has ample time to peruse and review papers for further deliberation at the Board meeting. The Board Report includes among others, the following details:

  • Minutes of meeting of all Committees of the Board;
  • Any matters arising from previous meetings;
  • Business strategies and corporate proposals;
  • Review of operational matters and financial report of the Group;
  • Review of clinical and professional services report;
  • Approval sought for capital expenditure and expansion project reports;
  • Report on Audit Committee and Risk Management matters; and
  • Report of the Registrar.

There is also a schedule of matters reserved specifically for the Board's decision, including the approval of corporate plans and budgets; acquisition and disposal of assets that are material to the Group; major investments; changes to management and control structure of the Group, including key policies, procedures and authority limits.

The Board is fully aware of its duties and responsibilities with regards to the matters stated above. Decisions and deliberations at the Board meetings are recorded in the minutes of the meeting by the Company Secretary. All minutes will be confirmed prior to the meeting.

The Directors, whether as a full Board member or in their individual capacities, have full access to all information within the Company and could, where necessary take independent advice at the Group's expense, in furtherance of their duties and responsibilities.

Qualified and Competent Company Secretaries

The Company Secretaries are appointed by the Board and attend all Board and Board Committee Meetings. They are responsible for providing Directors with advice on compliance and corporate governance issues.

The Board has unrestricted access to the advice and services of Company Secretaries. In between meetings, the President and Managing Director meets regularly with the Chairman and other Board Members to keep them abreast on the Group's current developments.

The Company Secretaries play an advisory role to the Board in relation to the Company's constitution, Board's policies, procedures and compliance with the relevant regulatory requirements, including codes or guidance and legislations. The Company Secretaries support the Board in managing the Group's Governance Model, ensuring it is effective and relevant.

The Company Secretaries safeguard all statutory books and records of the Group, which are maintained in the statutory register of the Group. Company Secretaries also ensure that all Board meetings are properly convened, ensuring accurate and proper records of the proceedings and resolutions passed are recorded. The Company Secretaries also have to ensure that any change in the Group's statutory information be duly completed in the relevant prescribed forms and lodged with the Companies Commission of Malaysia within the prescribed period of time.

Board Charter

A Board Charter was adopted in 2014. It captures and formalises governance practices, Board policies and guidelines subsisting throughout the Company onto one formal document in providing clear guidance to all stakeholders.

The Charter is regularly reviewed and kept up-to-date with changes in regulations and best practices, while ensuring its effectiveness and relevance to the Board's objectives.