BOARD CHARTER

1. INTRODUCTION

The Board Charter of the Company is to set out key values, principles and ethos of the Company in ensuring the Board’s efficiency in discharging its duties. The Board functions are being worked out before the same are to be formalised and made public and the Board shall ensure compliance of the same. The Board of Directors (“the Board”) is accountable and responsible for the performance and affairs of DBHD (“the Company” or “DBHD”), including practicing a high level of corporate governance.

2. PURPOSE

This Board Charter sets out the role, functions, composition, operation and processes of the Board and is to ensure that all Board members acting on behalf of the Company are aware of their duties and responsibilities as Board members. This Board Charter would act as a source of reference and primary induction literature to provide insights to prospective Board members and senior management. In addition, it will assist the Board in the assessment of its own performance and of its individual Directors.

3. THE BOARD

3.1 Board Membership

3.1.1 Composition

The Board consists of qualified individuals with diverse set of skills, experience and knowledge necessary to govern the Company. The composition and size of the Board is such that it facilitates the decision making of the Company. The Articles of Association of the Company provides for a minimum of 2 Directors and maximum of 15 Directors. The composition and size of the Board are reviewed from time to time to ensure its effectiveness.

In accordance with Paragraph 15.02 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, that requires at least one-third of the Board to comprise Independent Directors, the presence of four (4) Independent Non-Executive Directors out of eight (8) lead to the Board being satisfied that the size and composition of the Independent Non-Executive Directors has fulfilled this requirement adequately. The number of members is sufficient and well balanced for the Company to carry out its duties effectively, whilst providing greater assurance that no individual or small group of individuals can dominate the Board’s decision.

3.1.2 Appointment and Re-election

The appointment of a new Director is a matter for consideration and decision by the full Board, upon the recommendation from the Nominating & Remuneration Committee (“NRC”). In making these recommendations, the NRC will consider the required mix of skills, experience and diversity, including gender, where appropriate, which the Director brings to the Board.

The Articles of Association of the Company provides that every newly appointed Director be subjected to re-election at the immediate Annual General Meeting (“AGM”). Further, one third (1/3) of the Board shall retire from office and be eligible for re-election at every AGM, and all the Directors shall submit themselves for re-election at least every three (3) years.

3.1.3 Independent Director

In accordance with the MCCG 2012, the tenure of an Independent Director shall not exceed a cumulative term of 9 years. However, the Nomination Committee shall assess the independence of the independent director who has served as Independent Non Executive Director of the Company for a cumulative term of more than nine (9) years, justified by the discharged of his/ her duties with reasonable skill and compentence, in bringing independent judgment and depth into the Board’s decision making in the interest of the Company.

Further the Board of Directors shall recommended him/ her to continue to act as an Independent Non Executive Director of the Company and the Board shall seek the shareholders’ approval at an AGM for the retention of the independent status of the existing Independent Director who had served in that capacity for more than nine (9) years.

The Board assesses the independence of the Directors annually by taking into consideration their disclosed interests and having regard to the criteria for assessing the independence of Directors under the annual Board Assessment. A separate assessment for Independent Directors is also undertaken annually.

The Company’s Chairman is an Independent Director and there are five (5) Independent Directors out of eight (8) Board members. The Board believes that the interests of shareholders are best served by a Chairman who is an Independent Director and will act in the best interests of the shareholders as a whole. He exercises independent and broad judgement as well as provides independent opinions and constructive views on proposals from the Management. 

The Board continues with the view that although the Board consist of a balance of non-independent non-executive directors, its existing five (5) independent non-executive directors, with their extensive knowledge, wide experience and expertise will still be able to provide the neccesary check and balance to the decision making process of the Board.

3.1.4 Directors’ Evaluation

The Board, through its NRC, undertakes an evaluation in order to assess how well the Board, its Committees, the Directors including Independent Directors and the Chairman are performing. The evaluation covers the Board’s composition, skills mix, experience, communication, roles and responsibilities, effectiveness as well as conduct. The process also includes a peer review in which Directors assess their fellow Directors’ performance against set criteria, including the skills they bring to the Group and the contributions they make. A form of Directors’ Evaluation were submitted to the Board and were filled up by the Board.

3.1.5 New Directorship

All Board members shall notify the Chairman of the Board before accepting any new directorship. Further, any nominations for new Directors to the Board are reviewed by the Nomination and Remuneration Committee and presented to the Board for approval. The Company Secretaries will ensure that all appointments are properly made and that statutory requirements are met.

3.2 Board Role

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) principals stewardship responsibilities as follows :-

1. Reviewing, monitoring and where appropriate, approving fundamental financial and business strategies and major corporate actions.

2. Overseeing the conduct of the Group’s business to evaluate whether the business is properly managed.

3. Establishing the Group’s Enterprise-Wide Risk Management (EWRM) framework.

4. Formulating a succession plan for the Managing Director and Senior Executives.

5. Establishing an investor relations programme.

6. Ensuring processes are in place for maintaining the integrity of the Company, integrity of the financial statements, compliance with law and ethics, relationships with customers and suppliers, and relationship with stakeholders.

At the same time, the Board also ensures the sustenance of a dynamic and robust corporate climate focused on strong ethical values. This emphasizes active participation and dialogue on a structured basis involving key personnel at all levels, as well as ensuring accessibility to information and transparency on all executive actions. The corporate climate is also continuously nourished by value-centered programmes for team-building and active subscription to core values.

The Board has unrestricted access to timely and accurate information on various aspects of the Company’s operations and performance. All Board reports are normally issued in sufficient time to all Directors to enable the Directors to review the reports prior to the Board meetings and understand the issues to be discussed.

The Board promotes good corporate governance in the application of sustainability practices. The Group practises a system of rewards based on the philosophy of pay for performance. Employees are rewarded for productivity improvements and contribution towards the achievement of the Group’s immediate and long-term objectives. The rewards encompass not only compensation and benefits but also performance recognition and professional development and career progression.

The Board of Directors has always conducted itself in an ethical manner while executing its duties and functions and complied with the Company Directors’ Code of Ethics recommended by the Companies Commission of Malaysia. 

3.2.2 Matters Reserved for the Board

The following are matters which are specifically reserved for the Board:-

(i) approval of corporate plans and programmes;

(ii) approval of annual budgets, including major capital commitments;

(iii) approval of new ventures;

(iv) approval of material acquisitions and disposals of undertakings and properties;

(v) changes to the management and control structure within the Company and its subsidiaries (“the Group”), including key policies, delegated authority limit.

3.3 Chairman and Managing Director

The Group complies with the requirement to have the position of the Chairman and CEO (the position of which is assumed by the Managing Director) held by two (2) separate individuals. The role of the Chairman and the Managing Director are distinct and separate to ensure there is a balance of power and authority.

The Company’s Chairman who is a Non-Independent and Non-Executive Chairman, shall be responsible for the leadership, effectiveness, conduct and governance of the Board, while the Managing Director holds the principal responsibilities of reporting, clarifying, communicating and recommending key strategic and operational matters and proposals to the Board for approval as well as implementation of policies and strategies.

3.4 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 Committees shall operate under clearly defined terms of reference. The Committees are authorized by the Board to deal with and to deliberate on matters delegated to them within their terms of reference. The Chairman of the respective Committees reports to the Board on the outcome of the Committee meetings and such reports or minutes will be included in the Board papers.

Hence, the Board delegates certain functions to the following Committees to assist in the execution of its responsibilities:-

(i) Audit Committee

(ii) Nominating & Remuneration Committee (NRC) ; and

(iii) Tender Board Committee

The functions of the Audit Committee are to ensure compliance with Paragraph 15, Part C of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the independence of the External Auditors, the integrity of Management and the adequacy of disclosures to Shareholders. The Audit Committee acts to assist the Board of Directors in fulfilling its fiduciary responsibilities by ensuring that the results of internal and external audit findings are fully considered and properly resolved.

The NRC is established primarily identify and recommend candidates for Board directorship, recommend directors to fill the seats on Board Committees, evaluate the effectiveness of the Board and Board Committees (including the size and composition) and contributions of each individual director and ensure an appropriate framework and plan for Board succession, in accordance to the terms of reference.

As for Tender Committee, the Committee are to evaluate, deliberate and approve the recommendations made by the Management prior to awarding of major contracts and tenders to potential contractors.

3.5 Board Meetings

The Board shall conduct at least four (4) scheduled meetings annually, with additional meetings to be convened as and when necessary. All Directors will be provided with the performance and progress reports on a timely basis prior to the scheduled Board meetings. A full agenda of the meeting and all Board papers, including complicated issues or specific matters, would be distributed in advance to ensure Directors are well informed and have the opportunity to seek additional, and are able to obtain further clarification from the Company Secretary, should such a need arise. Where necessary, the services of other senior management or external consultants will be arranged to brief the Directors or clear to their doubts or concerns.

3.6 Financial Reporting

Pursuant to Paragraph 15.26(a) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all the Company Directors are collectively responsible in ensuring that the financial statements and the quarterly results are drawn up in accordance with the approved accounting standards adopted by the Malaysian Financial Reporting Standard (MFRS), the provisions of the Companies Act, 1965, and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

The Board ensures that the financial statements of the Company and its subsidiary companies as of the end of the financial year together with the financial results and cash flows for the year ended are prepared based on the appropriate and relevant accounting policies, on a consistent basis and made judgments and estimates that are reasonable and fair in preparing the financial statements of the Company and its subsidiaries. The financial statements are also prepared on a going concern basis and the Directors have assured that proper accounting records are kept so as to enable the preparation of the financial statements with reasonable accuracy.

3.7 Directors’ Remuneration

The Board on 21 March 2011, resolved to establish its own Nomination and Remuneration Committee (NRC). The Board is of the view that the composition of the NRC meets the objectives and principles of good corporate governance. The members of the NRC comprise exclusively of non-executives directors, a majority of whom is independent.The Nomination Committee develops, maintains and reviews the criterias to be used in the recruitment process and annual assessment of directors.

Through the Nomination and Remuneration Committee (NR), the Board has established formal and transparent remuneration policies and procedures to attract and retain directors in which NRC are responsible for making recommendations on the framework, policies and procedures in reviewing and determining the specific remuneration package of the Directors of DBhd. The Company’s remuneration scheme for a Managing Director commensurate with performance, seniority, experience and scope of responsibilities and is benchmarked to market/industry standards. For Non-Executive Directors, the level of remuneration reflects the level of responsibilities undertaken by them.

3.8 Directors’ Training & Continuing Education

In addition to the Mandatory Accreditation Programme as required by the Bursa Malaysia Securities Berhad (“Bursa Malaysia”), the Directors shall continue to update their knowledge and enhance their skills through appropriate continuing education programmes and life-long learning.

The Board encourages its Directors to attend talks, seminars, workshops and conferences to update and enhance their skills and knowledge to enable them to carry out their roles effectively as Directors in discharging their responsibilities towards good corporate governance, operational and regulatory standards and sustain active participation in the Board deliberations. The Board shall assess the training needs of the Directors from time to time.

4. COMPANY SECRETARY

The Company Secretary plays an important advisory role and is a source of information and advice to the Board and Committees on issues relating to compliance with laws, rules, procedures and regulations affecting the Company and Group. The Board has unrestricted access to the advice and services of Company Secretaries and where necessary, in the furtherance of their duties, obtain independent professional advice with the Company paying the related costs. The Company Secretaries ensure that all Board meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are recorded and maintained in the statutory register of the Company.

The Company Secretaries also keep abreast of the evolving capital market environment, regulatory changes and developments in Corporate Governance through continuous training.

5. INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION

The Board shall place great importance in ensuring the high standards of transparency and accountability in its communication to shareholders, as well as to potential investors, analysts and the public.

The Board recognises the need of effective communication with shareholders and the investment community, and adheres strictly to the disclosure requirements of Bursa Securities. Dissemination of information includes the distribution of annual reports and relevant circulars to shareholders, issuance of press releases, announcing the quarterly financial results and performance of the Group to Bursa Malaysia Securities Berhad and the public as well as holding press conferences.

The Chairman and the Board encourage shareholders to attend and participate in the AGM held annually as well as in the EGM. The shareholders are given the opportunity to seek clarification by making use of the Question and Answer session during the AGM / EGM on any matters pertaining to the business and financial performance of the Company. The rights to demand for a poll during the meetings are conveyed to shareholders by the Board.

The shareholders shall be informed of all material matters affecting the Company and Group. The ways of communication to shareholders and investors, amongst other, are by way of timely announcements and disclosures made to Bursa Malaysia, which includes quarterly financial results, changes in the composition of the Group and any other material information that may affect investors’ decision making.

The AGM is the principal forum for dialogue with shareholders. At each AGM, a presentation is given by the Managing Director to explain the Group’s strategy, performance and major developments to shareholders. The AGM is the principal forum for dialogue with shareholders. Notice of the AGM and Annual Reports are sent out at least 21 days before the date of the meeting. In the case of an EGM, the Notice is sent out at least 14 days before the date of the meeting (or 21 days where any special resolutions are proposed).

6. ACCESS TO INFORMATION AND INDEPENDENT ADVICE

The Directors, collectively or individually, may seek independent professional advice and information in furtherance of their duties at the Company’s expense, so as to ensure the Directors are able to make independent and informed decisions.

7. REVIEW OF THE BOARD CHARTER

The Board Charter has been adopted by the Board on 20 November 2013. Any subsequent amendment to the Charter can only be approved by the Board. The Board Charter will be periodically reviewed 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.