Annual Report 2012 - IOI Group

STATEMENT ONCORPORATE GOVERNANCEIntroductionThe Board recognises the paramount importance of good corporategovernance to the success of the Group. It strives to ensure that ahigh standard of corporate governance is being practisedthroughout the Group in ensuring continuous and sustainablegrowth for the interests of all its stakeholders.The Group’s corporate governance practices are guided by its“Vision IOI” whereby responsible and balanced commercialsuccess is to be achieved by addressing the interests of allstakeholders. A set of core values guides our employees at alllevels in the conduct and management of the business andaffairs of the Group. We believe that good corporate governanceresults in quantifiable and sustainable long term success andvalue for shareholders as well as all other stakeholders, asreflected by our performance and track record over the years.During the financial year, the Group has received numerousaccolades and awards in recognition of its efforts.In relation to the principles and recommendations of the MalaysianCode on Corporate Governance (“the Code”), the Board is pleasedto provide the following statement, which outlines how the Grouphas applied the principles laid down in the Code. Except wherespecifically identified, the Board has generally complied with thebest practices set out in the Code.THE BOARD OF DIRECTORSRoles and Principal DutiesThe Board takes full responsibility for the overall performance ofthe Company and of the Group.The Board establishes the vision and strategic objectives of theGroup, directing policies, strategic action plans and stewardship ofthe Group’s resources towards realising “Vision IOI”. It focusesmainly on strategies, financial performance and critical andmaterial business issues in specific areas such as principal risks andtheir management, internal control system, succession planningfor senior management, investor relations programme andshareholders’ communication policy.The Executive Directors take on primary responsibility for managingthe Group’s day to day business and resources. Their intimateknowledge of the business and their “hands-on” managementpractices have enabled the Group to have leadership positions inits chosen industries.The Independent Non-Executive Directors are actively involved invarious Board committees and contribute significantly to areassuch as performance monitoring and enhancement of corporategovernance and controls. They provide a broader view,independent assessment and opinions on management proposalssponsored by the Executive Directors.Although a relatively small Board, it provides an effective blend ofentrepreneurship, business and professional expertise in generalmanagement, finance, legal and technical areas of the industriesthe Group is involved in. A key strength of this structure has beenthe speed of decision-making.Board Composition and BalanceThe Board comprises nine (9) members, of whom four (4) areExecutive Directors, four (4) are Independent Non-ExecutiveDirectors and one (1) is Non-Independent Non-Executive Director.The Board composition complies with the Main Market ListingRequirements of Bursa Malaysia Securities Berhad (“BursaSecurities”) that requires a minimum of two (2) Directors or onethird (1/3) of the Board, whichever is the higher, to be IndependentDirectors. A brief profile of each Director is presented on page 64onwards in the “Profile of Directors” section of the Annual Report.In his capacity as Executive Chairman, Tan Sri Dato’ Lee ShinCheng essentially functions both as Chief Executive Officer andChairman of the Board. The Board is mindful that convergence ofthe two (2) roles is not in compliance with best practice, but takesinto consideration the fact that as Tan Sri is also the single largestshareholder, there is the advantage of shareholder leadership anda natural alignment of interests. In respect of potential conflicts ofinterest, the Board is comfortable that there is no undue riskinvolved as all related party transactions are disclosed and strictlydealt with in accordance with the Main Market Listing Requirementsof Bursa Securities. In addition, the presence of IndependentDirectors with distinguished records and credentials ensures thatthere is independence of judgement.The Board also has a well-defined framework on the variouscategories of matters that require the Board’s approval,endorsement or notations, as the case may be.Other than the four (4) Independent Non-Executive Directors, MrLim Tuang Ooi, a representative from the Employees ProvidentFund which is a substantial shareholder of the Company wasappointed as Non-Independent Non-Executive Director.86IOI CORPORATION BERHADAnnual Report 2012