The Board

3.1   Role 
3.1.1

The Board is responsible for the overall corporate governance of the Lii Hen Group, its strategic direction, establishing goals for management and monitoring the achievement of these goals. 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 understands that the responsibility for good Corporate Governance rests with them and therefore strives to follow the principles and best practices stated in the MCCG. The Board includes a narrative statement in its Company’s Annual Report on the extent of compliance with the principles and best practices in Corporate Governance pursuant to Paragraph 15.25 of the Listing Requirements of Bursa Securities.

3.1.3

The Company complies with the various guidelines issued by Bursa Securities and the Securities Commission relating to disclosure and internal audit functions.

3.1.4

The Board meets every quarter. Additional meetings are convened whenever necessary. Meetings were scheduled at the start of the year to enable Board members to plan their appointment schedule. 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.

3.1.5

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. The role of Chairman and Chief Executive Officer (CEO)/Managing Director (MD), are separated and clearly defined, so as to ensure there is a balance of power and authority. The Chairman is responsible for ensuring the effective conduct of the Board, monitoring monthly result so as to meet its corporate goals and objectives. The CEO/MD with the assistance of the Executive Directors, is responsible for the day to day management of the business as well as implementation of Board’s policies and decisions. The Independent Non-Executive Directors provide independent judgement to the decision making of the Board and provide an independent check and balance for the Executive Directors. The Independent Non-Executive Directors also ensure all strategies proposed by the Executive Directors are fully deliberated and agreed.

3.1.6

The Board assumes the following specific duties:
a) Establishing and reviewing the strategic direction of the Lii Hen Group;
b) Monitoring the implementation of strategic plan by management;
c) Overseeing and evaluating the conduct of the Lii Hen Group’s businesses;
d) Identifying principal risks and ensure that the risks are properly managed;
e) Establishing a succession plan for senior management position;
f) Developing and implementing an investors relations programme or shareholder communication policy; and
g) Reviewing the adequacy and integrity of management information and internal control systems.

3.1.7

The Board has established written procedures determining which issues require a decision of the full Board and which issues can be delegated to Board Committees or the Management.

3.1.8

The Board reserves full decision-making powers on the following matters:
a) Conflict of interest issues relating to a substantial shareholder or a Director;
b) Material acquisitions and disposition of assets not in the ordinary course of business;
c) Investments in Capital projects;
d) Authority levels;
e) Treasury policies;
f) Risk management policies; and
g) Key human resource issues.

3.1.9

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 wide range of business, financial and legal experiences, backgrounds and perspectives. The mix of skills and experiences is vital in directing and supervising the Lii Hen Group’s overall business activities. 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

Profiles of Board members are included in the Annual Report of the Company.

3.2.4

The CEO and the Executive Director(s) are the “Executive” Directors on the Board. However, the views of the Management are represented at meetings of the Board by the presence of senior executives when required.

3.2.5

Non-Executive Directors meet as a group at least twice a year without the Executive Directors present. There is a statement in the Annual Report on whether the Non-Executive Directors have met without the Executives Directors being present.

3.2.6

The Independent Directors provide independent judgement, experience and objectivity without being subordinated to operational considerations.

3.2.7

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 subject to objective and impartial consideration by the Board.

3.2.8

The views of the Independent Directors should carry significant weight in the Board’s decision-making process.

3.2.9

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 CEO/MD have failed to resolve them. The Senior Independent Director chairs the meetings between the Non-Executive Directors where Executive Directors do not attend.

3.2.10

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

The Company Secretary has the responsibility of ensuring that relevant procedures relating to the appointments of new Directors are properly executed.

3.3.4

Upon the appointment of a new Director, the Company Secretary advises the Director of his/her principal duties and responsibilities and explains the restrictions to which he or she is subject to in relation to price-sensitive information and dealings in the Company’s securities. Thereafter, all Directors are provided with appropriate briefings on the Company’s affairs and up-to-date Corporate Governance materials published by the relevant bodies.

3.3.5

The Company has adopted an induction programme for newly appointed Directors. The induction programme aims at communicating to the newly appointed Directors on the Company’s vision and mission, its philosophy and nature of business, current issues within the Company, the corporate strategy and the expectations of the Company concerning input from Directors.

3.3.6

The Company has adopted continuing educational programmes (CEP) to update the Board in relation to new developments pertaining to the laws and regulations and changing commercial risks which may affect the Board and/or the Company. The Board should ensure its members have access to appropriate CEP.

3.3.7

In addition to the Mandatory Accredited Programme as required by the Bursa Securities, Board members are also encouraged to attend training programmes conducted by highly competent professionals and which are relevant to the Company’s operations and business. The Board will assess the training needs of the Directors and disclose in the Annual Report the trainings attended by the Directors.

3.3.8

The directorships held by any Board member at any one time shall not exceed ten (10) in listed companies and fifteen (15) in non-listed companies. The Chairman should be notified before accepting any new directorship together with an indication of time that will be spent on the new appointment.

3.3.9

Executive Directors should not take on more than one (1) non-executive directorship, nor become Chairman of a major Company, and no individual should chair the Board of more than one (1) major Company.

 

3.4 

 

Re-election

3.4.1

In accordance wit the Company’s Articles of Association, all Directors who are appointed by the Board are subject to re-election by shareholders at the next Annual General Meeting immediately after their appointment.

3.4.2

The Articles of Association also provides that at least one-third (1/3) of the Board including MD are subject to retirement by rotation and offer themselves for re-election at each Annual General Meeting. In practice, this means that every Director be subject to re-election by rotation at least once every three (3) years.

 

3.5 

 

Supply of Information

3.5.1

The Company aims to provide all Directors with timely and quality information and in a form and manner appropriate for them to discharge their duties effectively.

3.5.2

The Management is responsible for providing the Board with the required information in an appropriate and timely manner. The Chairman, assisted by the Company Secretary, assesses the type of information required to be provided to the Board. If the information provided by the Management is insufficient, the Board will make further enquiries where necessary to which the persons responsible will respond as fully and promptly as possible.

3.5.3

The agenda for the Board Meetings, together with detailed reports and proposition papers to be tabled at the Board Meeting are circulated to all Directors in advance prior to the meeting. This will ensure all the Directors are supplied with all necessary information and sufficient time to consider the matters tabled in order to enable them to effectively discharge their duties and responsibilities.

3.5.4

Amongst others, the Board papers include the following:
a) Quarterly financial report and report on the Company’s cash and borrowing positions;
b) Minutes of meetings of all Committees of the Board;
c) A current review of the operations of the Company and its subsidiaries;
d) Reports on Related Party Transactions and Recurrent Related Party Transactions;
e) Directors’ share-dealings, including public shareholdings spread; and
f) Annual Projected Accounts and Management Plans.

3.5.5

Every Director has access to the advice and services of the Company Secretary and, if deemed necessary, seeks advice from the independent professional advisors and internal/external auditors at the Company’s expense. Senior management officers and external advisers may be invited to attend Board Meetings when necessary, to furnish the Board with explanations and comments on the relevant agenda items tabled at the Board Meetings or to provide clarification on issue(s) that may be raised by any Director.

3.5.6

Minutes of every Board Meeting are circulated to all Directors for their perusal prior to confirmation of the minutes at the following Board Meeting.