The Board Charter is a charter of the Board of Directors (“the Board”) of ARK Resources Holdings
Berhad (“ARHB” or “the Company”) and its subsidiaries (“the Group”). The Board Charter sets out the
principal role of the Board, the demarcation of the roles, functions, responsibilities and power of the
Board and various Board Committees of the Company.
The Board is accountable to ARHB’s Members for the corporate governance and performance of the
ARHB Group and is also committed to achieving the highest standards of business integrity, ethics and
professionalism across the ARHB Group’s activities.
The Company would ensure that its Board Charter and other relevant documents as required under
Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities” or “the
Exchange”) (“MMLR”) or recommended under the MCCG 2017 are made available and easily
accessible by its shareholders and stakeholders at ARHB’s website at http://www.ark-resources.com.my/.
The Board believes that corporate governance is vital for delivering sustainable value and is crucial for
the Group success.
This Charter further defines the specific responsibilities of the Board, in order to enhance coordination
and communication among the Group more specifically, to clarify the accountability of both the Board
and Management for the benefit of the Company and its shareholders.
In addition, it will assist the Board in the assessment of its own performance and of its individual Directors.
(a) Board Performance Evaluation
The Board recognises the importance of assessing the effectiveness of individual Directors, the Board
as a whole and its Committees. The Board shall review and evaluate its own performance and the performance of its Committees on an annual basis.
(b) Roles of the Board
The two key tasks of the Board, namely in accelerating its ongoing oversight of the Group and the
responsibility for managing the day-to-day business of the Group that will enhance shareholders’ value and long term business sustainability and growth of the Group.
The Board oversees the business and affairs of the Company and will assume, amongst others, the following duties and responsibilities:
- promote good corporate governance culture within the Company which reinforces ethical, prudent and professional behaviour;
- reviewing, challenge and decide on management’s proposals for the Group and monitor its implementation by management;
- ensure that the overall strategic plans and direction of the Group supports long-term value creation and includes strategies on economic, environmental and social considerations underpinning sustainability;
- overseeing and evaluating the conduct and performance of the Company and Group;
- ensure there is a sound framework for internal controls and risk management;
- identifying the principal risks of the Company’s business and ensuring implementation of a proper risk management system;
- set the risk appetite within which the board expects management to operate and ensure that there is an appropriate risk management framework to identify, analyse, evaluate, manage and monitor significant financial and non-financial risks;
- establishing a succession plan;
- overseeing the development and implementation of a shareholder communication policy for the Company;
- reviewing the adequacy and the integrity of the management information and internal controls system of the Company;
- ensure that the Company’s corporate disclosure are in compliance with the disclosure requirements as set out in the MMLR; and
- ensure the Company has effective, transparent and regular communication with its stakeholders to enable them to make informed decisions with respect to the business of the Group, its policies on governance, the environment and social responsibility.
(c) Policy and Strategies
The following matters shall be reserved the Board’s for determination and/or approval (save to the extent that the Board resolves that determination and/or approval of any such matter shall be delegated to the Committees of the Board or Management):
- corporate plans and programmes;
- annual budgets, including major capital commitments;
- new ventures;
- material acquisitions and disposals of undertakings and properties;
- changes to the management and control structure within the Company and its subsidiaries, including key policies
(d) Powers delegated to Management
The Board shall delegate to the Group Managing Director, the authority and power to manage the
Company and its businesses within levels of authority specified by the Board from time to time. Group
Managing Director may delegate aspects of his or her authority and power but remains accountable
to the Board for the Company’s performance and is required to report regularly to the Board on the progress being made by the Company’s business units.
(e) Roles of Chairman and Group Managing Director
The Chairman is responsible for the overall leadership and efficient functioning of the Board. The key roles of the Chairman, amongst others, are as follows:
- ensure that the Board functions effectively, cohesively and independently of Management
- leading the Board in establishing and monitoring good corporate governance practices in the Company and Group
- leading the Board, including presiding over Board meetings and Company meetings and directing Board discussions to effectively address the critical issues facing the Company, in addition to encouraging active participation from Board members
- promoting constructive and respectful relationship between board members and between board members and management
- ensure that there are effective communication between the Company and/or Group and its shareholders and relevant stakeholders
The Group Managing Director is responsible to the Board for the day-to-day management of the
Company and its subsidiaries (“the Group”). The Board gives direction and exercises judgement in
setting the Company’s objectives and overseeing their implementation. The key roles of the Group Managing Director, amongst others, are as follows:
- developing the strategic direction of the Group
- ensure that the Company and/or the Group’s business is properly and efficiently managed by ensuring that the executive team implements the policies and strategies adopted by the Board and its Committees
- ensuring an effective management team below the level of the Managing Director and to develop an active succession plan
- ensure that the objectives and standards of performance are understood by the Management and employees
- ensure that the operational planning and control systems are in place
- monitoring performance results against plans
- taking remedial action, where necessary
(f) Board Committees
The Board may from time to time establish committees as is considered appropriate to assist in
carrying out its duties and responsibilities. The Board delegates certain functions to the following
committees with specific terms of reference as set out in the respective Appendices to assist in the execution of its responsibilities:
- Audit & Risk Management Committee (Appendix B)
- Nomination Committee (Appendix C)
- Remuneration Committee (Appendix D)
The committees shall operate under clearly defined terms of reference. The committees are
authorised by the Board to deal with and to deliberate on matters delegated to them within their
terms of reference. The Chairman of the respective committee reports to the Board on the outcome
of the committee meetings and the minutes will be included in the Board Papers for Board’s notification.
(g) Board Meetings
The Board shall schedule at least four (4) quarterly meetings annually. However, Special Meetings may be convened as required.
The Notice of Board Meeting, full agenda and the comprehensive meeting materials shall be circulated
to all Board Members at least 7 business days in advance. Directors are expected to review in advance
any such materials in order to facilitate meaningful deliberation during each meeting.
(h) Directors’ Remuneration
The Company shall provide a fair and reasonable, competitive, remuneration for its executive
directors to ensure that the Company attracts and retains high calibre executive directors who have
the skills, experience and knowledge to increase entity value to the benefit of all shareholders.
The non-executive Directors will receive a fixed base fee, not by a commission or on percentage of
profits/turnover, as consideration for their Board duties. The aggregate amount of directors’ fees to
be paid to non-executive directors is subject to the approval of the shareholders at a General Meeting.
(i) Directors’ Training and Continuing Education Programme
In addition to the Mandatory Accreditation Programme as required by the Bursa Malaysia Securities
Berhad, the Directors shall continue to update their knowledge and enhance their skills through
appropriate continuing education programmes. This will enable Directors to effectively discharge duties and sustain active participation in the Board deliberations.
Directors shall takes appropriate action to ensure they stay abreast with and understand the
sustainability issues relevant to the company and its business, including climate-related risks and opportunities.
The Board will assess the training needs of the Directors from time to time and will ensure Directors have access to continuing education programme.
(j) Internal Controls System and Risk Management Framework
The Board ensures that there is an ongoing process for identifying and managing significant risks faced by the Group. The Board believes that maintaining a sound system of internal control is based on a clear understanding and appreciation of the following key elements:-
- Determining the Company’s level of risk tolerance and activity identified, assessing and monitoring the key business risks to safeguard shareholders’ investments and the Company’s assets;
- Commitment to articulate, implement and review the Company’s internal control systems; and
- Periodic testing of the effectiveness and efficiency of the internal controls procedures and processes to be conducted to ensure that the system is viable and robust.
The Board should ensure that the Management has carried out a risk assessment review on the
Company’s and Group’s operations, which covers all aspects of the business activities. The risk
profiles including its tolerance level thereof, and risk registers are reported by the Management
to the Audit & Risk Management Committee on an annual basis. The Chairman of the Audit & Risk
Management Committee reports the significant risks and control issues to the Board for its consideration.
Enhancement to System of Internal Control
The scope of activities of the Internal Audit Function include the following:-
- Review and appraise the soundness, adequacy and application of the system of internal controls and recommend improvements thereon;
- Ascertain the extent of compliance with established policies, procedures and statutory requirements;
- Appraise the reliability, integrity and usefulness of financial and management information developed;
- Review the controls for safeguarding assets and as appropriate, verify the existence of assets; and
- Indentify ways and opportunities to improve the effectiveness and efficiency of the operations and processes of the Group.
The adequacy and effectiveness of the internal control is assessed by adopting a systematic
approach in reviewing the Group’s business and operational control, risk management and governance process.
Internal Audit Function
The Group has been outsourcing the Internal Audit Function to an internal audit firm to undertake
regular and systematic reviews of the system of controls. The Audit & Risk Management
Committee should ensure that the Internal Audit Function is carried out in accordance with a recognised framework and able to function independently.
The Audit & Risk Management Committee should also ensure that the system of internal control
as established by the Management is reviewed by the internal auditors to assess the adequacy of
such internal control system in relation to the objectives and make appropriate recommendations
for improvement. The Management shall carry out at least one cycle of internal audit for each
financial year under review, and findings from the internal audit shall be communicated to the Audit & Risk Management Committee for review and endorsement.
The Audit & Risk Management Committee considers the report from the Internal Audit Function
and Management responses, before reporting and making recommendations to the Board in strengthening the risk management and internal control systems.
(k) Financial Reporting
The Company aims to present a clear and balanced assessment of the Company’s financial position
and prospects for its financial statements and quarterly announcements to the shareholders, including
other price sensitive public reports and reports submitted to regulators.
The Board will ensure that the financial statements are prepared in accordance with the Companies
Act and the applicable approved accounting standards set out by the Malaysian Accounting Standards
Board so as to present a true and fair view of the state of affairs of the Group.
COMPANY SECRETARY
The Board appoints the Company Secretary who plays an important advisory role and ensure that the Company Secretary fulfils its function for which he/she has been appointed.
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
and Group. The Company Secretary should monitor corporate governance developments and assist the board in applying governance practices to meet
the board’s needs and stakeholders’ expectations.
The Company Secretary shall be of a senior position with adequate authority and shall report directly
to the Board. A suitably qualified Company Secretary possess the knowledge and experience to carry
out his functions. These may include knowledge in company and securities law, finance, governance,
company secretaryship and other areas of compliance such as listing requirements. The Company Secretary should undertake continuous professional development.
The appointment and removal of the Company Secretary will be subjected to the approval of the Board.
The Company Secretaries carry out the following tasks:
- Attend and ensure proper conduct and procedures at all Board Meetings, Board Committee Meetings, Annual General Meeting (“AGM”), Extraordinary General Meeting (“EGM”) and any other meetings that require the attendance of Company Secretary and ensure that meetings are properly convened;
- Ensure that the quarterly financial results, audited financial statements, annual reports, circulars, etc and all relevant announcements are announced to Bursa Malaysia and Securities Commission on a timely basis;
- Ensure that deliberations at the meetings are well captured and minuted, and subsequently communicated to the relevant Management personnel for necessary actions;
- Ensure that the Company complies with the Main Market Listing Requirements and the requirements of the relevant authorities;
- Inform and keep the Board updated of the latest enhancement in corporate governance, changes in the legal and regulatory framework, new statutory requirements and best practices;
- Keep the Directors and principal officers informed of the closed period for trading in the Company’s shares; and
- Ensure proper record and maintenance of the Company’s proceedings, resolutions, statutory records, register books and documents.
GENERAL MEETINGS
General Meetings are important avenues for shareholders to exercise their ownership rights. The
Board shall facilitate the exercise of these rights and take reasonable steps to encourage the
shareholders’ participation at general meetings, by serving notices for meetings as required by law
and regulation. The Board shall disclose all relevant information to the shareholders to enable them
to exercise their rights by attending the general meetings and vote in the appropriate manner.
With effect from 15 August 2018, all resolutions set out in the notice of any general meetings, or in
any notice of resolution which may properly be moved and is intended to be moved at any general
meeting, will be carried out by poll voting. The Board will make an announcement of the detailed
results showing the number of votes cast for and against each resolution (together with the
percentage) and the name of scrutineer who validate the votes cast at the general meetings.
Moreover, the notice for an Annual General Meeting will be given to the shareholders at least 28 days prior to the meeting to facilitate greater shareholders participation.
CONFIDENTIALITY AND DISCLOSURE OF INTEREST
The Directors are required to act in the best interests of the Company and should avoid conflicts of
interest as far as possible. The Directors also have a duty of confidentiality in relation to the Company’s confidential information.
A Director should disclose to the Board:
- any material personal interest they have in a matter which relates to the affairs of the Company; and
- any other interest (direct or indirect) which the Director believes is appropriate to disclose in order to avoid any conflict of interest or the perception of a conflict of interest.
- the directors should abstain themselves from discussion or decisions on matters in which they have a conflicting interest, unless resolved otherwise by the remaining members of the Board.
The disclosure should be made as soon as practicable after the Director becomes aware of their interest. Details of the disclosure must be recorded in the minutes of the meeting at which the disclosure is made or the meeting held following the disclosure.
INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION
The Company is committed to ensure that shareholders are well-informed of all major developments
affecting the state of affairs of the Company. To achieve this, the Company has implemented amongst others, the following:
- timely release of announcements and disclosures to Bursa Malaysia Securities Berhad, which include quarterly financial results, material contract and any other material information that may affect the investors’ decision making;
- conducts regular dialogues with financial analysts as a means of effective communication that enables the Board and Management to convey information relating to the Company’s performance, corporate strategy and other matters affecting shareholders’ interests;
- press conference which is normally held after the Annual General Meeting/Extraordinary General Meeting to provide the media an opportunity to receive an update from the Board on the proceedings at the meetings and to address any queries from the media;
- encourage full participation of shareholders at all Annual General Meetings to ensure a high level of accountability and discussion of the Company’s strategy and goals. The Company will also invite the external auditor to attend the Annual General Meeting and be available to answer shareholders’ questions about the conduct of the audit and the preparation and content of the auditor’s report; and
- publish a summary of all key matters discussed at the annual general meeting on the Company’s website as soon as practicable after the conclusion of the annual general meeting pursuant to the MMLR.
In addition, all Directors shall attend the general meeting and allows shareholders to raise questions
and concerns directly to the Chair of the Audit & Risk Management Committee, Nomination
Committee, Remuneration Committee or any other directors to provide meaningful response to questions addressed to them
Shareholders can gain access to information about the Company including the summary of the Group’s
investor relation activities and media releases through the Company’s website,
www.ark-resources.com.my.
WHISTLE BLOWING POLICY
The Company encourages all employees and stakeholders to report any improper conduct on the part
of employees, management, directors and vendors in particular with respect of their obligation to the Company’s interest.
The Whistle Blowing Policy is provided under
Appendix E and is made available for reference on the Company’s website,
www.ark-resources.com.my.
CODE OF ETHICS AND CONDUCT
The Directors are expected to conduct themselves with the highest ethical standards. All Directors and
employees are expected to behave ethically and professionally at all times and thereby protect and promote the reputation and performance of the Company.
The Group communicates the Code to all Directors and employees upon their appointment/employment and is deemed to be part of the Terms and Conditions of Service.
The Code of Ethics as per
Appendix F has been adopted by the Board on 18 April 2017 and is made available for reference on the Company’s website,
www.ark-resources.com.my.
CORPORATE SUSTAINABILITY FRAMEWORK
The Board recognizes that the pursuance of sustainability has always crucial to our operations as we
constantly seek to balance our environmental, social and governance goals whilst safeguarding the interests of our stakeholders.
The Group’s sustainability position is upheld by a framework in which all our activities are performed with consideration of the following key commitments:-
Environmental
- To recognize the accountability of environmental preservation and conservation;
- To ascertain that our operational decisions take into consideration environmental values and elements for the welfare of our management and customers;
Social
- To ensure that safety and health values are prioritized in our operations by continuously seeking ways to promote and improve safety and health values within our operating environment and to achieve higher safety standards;
- To encourage a diverse workforce by providing an open work place environment whereby all are treated with fairness and respect, thus, motivating them to realise their full potential; and
- To contribute to the welfare of the local community, improve the quality of life, support charitable causes, provide educational opportunities and promote local art, culture and heritage.
Governance
- To ensure conduct of business in a fair and ethical manner and in full compliance with all applicable laws and regulations;
- To uphold good governance and high ethical conduct by enforcing internal policies and procedures; and
- To ensure all employees and parties representing the Group adhere to all policies and procedures at all times.
REVIEW OF BOARD CHARTER
The Board Charter will be reviewed by the Board, with Nomination Committee’s recommendation,
annually and updated in accordance with the needs of the Company and any new regulations that may have an impact on the discharge of the Board’s responsibilities.
The Board Charter is made available for reference in the Company’s website at
www.ark-resources.com.my.