Board Charter

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EIG BOARD CHARTER

1.     INTRODUCTION

The Board of Directors (“Board”) is accountable and responsible for the governance, performance and strategic direction of Esthetics International Group Berhad (“Company”) and its subsidiaries (“Group”). All Board members are expected to provide leadership and direction to Group, as well as overseeing the management and guiding strategic direction and policy.

2.     PURPOSE

This Board Charter sets out the role, functions, composition, operation and processes of the Board by adopting the principles of good corporate governance and practice. In addition, it also assists the Board in the assessment of its own performance and its individual Directors.

This Board Charter is not an “all inclusive” document and should be read as a broad expression of principles. The Board Charter will be reviewed on a periodic basis and may be amended by the Board from time to time.

3.     THE BOARD

3.1     Board Membership

3.1.1     Composition

The Articles of Association of the Company provides for a minimum of four (4) directors and a maximum of nine (9) directors. At any one time, at least two (2) or one-third (1/3), whichever is higher, of the Board members are to be Independent Directors.

The Independent Directors provide independent judgment, experience and objectivity to the Board without being subject to operational considerations. They help to ensure that the interests of all shareholders are indeed taken into account by the Board and that the relevant issues are subjected to objective and impartial consideration by the Board.

The Board shall appoint a Senior Independent Director to whom the concerns of shareholders and stakeholders may be conveyed.

The composition and size of the Board are reviewed from time to time to ensure its appropriateness.

3.1.2     Appointments 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 Nomination Committee (“NC”).

In making these recommendations, the NC will consider the required mix of skills, experience and diversity 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     Director Independence

The Board assesses the independence of the Directors annually by taking into consideration of 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.

There is no limit imposed on the length of service of the Independent Non-Executive Directors, as the Board believes that they can exercise objectivity and independent judgement to discharge their responsibilities and their duty to safeguard the interests of the minority shareholders, if they pass the independence assessment.

3.1.4     New Directorship

Directors are expected to have such expertise and experience 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. Any Director shall notify the Chairman before accepting any new directorship and the notification shall include the indication of time that will be spent on the new appointment.

3.2     Board Role

3.2.1     Duties and Responsibilities

The Board assumes, amongst others, the following duties and responsibilities:

(1) review and adopt the overall strategic plans and programmes for the Group;

(2) ensure the Group’s core values, vision and mission and shareholders’ interests are met;

(3) establish such committees, policies and procedures to effectively discharge the Board’s roles and responsibilities;

(4) ensure the Company has appropriate corporate governance structures in place including standards of ethical behaviour and promoting a culture of corporate responsibility;

(5) promote investor relations and shareholder communications;

(6) review the adequacy and the integrity of the management information and internal controls systems of the Company and Group; and

(7) identify principal risks and ensure implementation of a proper risk management system to manage such risks

3.2.2     Matters Reserved for the Board

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

(1) approval of corporate strategies and business plans;

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

(3) approval of new ventures;

(4) approval of material acquisitions and disposals of undertakings and properties, if need be, recommend for shareholders’ approval;

(5) appointment of Directors and Directors’ remuneration; and

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

3.3     Chairman and MD

The role of the Chairman and the Group Managing Director & CEO are distinct and separate to ensure there is a balance of power and authority. The Chairman is responsible for the leadership effectiveness, conduct and governance of the Board, while the Group MD & CEO has overall responsibility for the day-to-day management of the business and implementation of the Board’s policies and decisions. The Group MD & CEO is responsible for the due execution of strategic goals, effective operation within the Company, and to explain, clarify and inform the Board on matters pertaining to the Company.

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 Board delegates certain functions to the following Committees to assist in the execution of its responsibilities;-

(1) Audit Committee;

(2) Nomination Committee; and

(3) Remuneration Committee.

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 Committees shall report to the Board the outcome of the Committee meetings and such reports or minutes will be included in the Board papers.

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.

A full agenda of the meeting and all Board papers are to be distributed in advance of the meetings to ensure Directors are well informed and have the opportunity to seek additional information, 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 and help the Directors to clear any doubt or concern.

3.6     Financial Reporting

In presenting the annual financial statements and quarterly announcements to the shareholders, including other price sensitive public reports and reports submitted to regulators, the Board aims to present a balanced and understandable assessment of the Group’s position and prospects.

The Board ensures that the financial statements are prepared in accordance with the Companies Act and applicable approved accounting reporting standards, so as to give a true and fair view of the state of affairs of the Group and the Company.

3.7     Directors’ Remuneration

Directors’ remuneration is undertaken by the Board as a whole so as to attract, retain, motivate and incentivise Directors of the necessary calibre needed to lead EIG Group successfully.

The remuneration of Directors is recommended by the Remuneration Committee with consideration given to the Group’s performance, Directors’ responsibilities and complexity of the company’s activities, but final endorsement lies with the entire Board as a whole to ensure that the aforementioned objective is met. Directors do not participate in decisions regarding their own remuneration packages and Directors’ fees must be approved by shareholders at the AGM.

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 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 shall appoint someone who is capable of carrying out the duties to which the post entails, and the removal of the Company Secretary shall be a matter for the Board as a whole. The Company Secretary shall report directly to the Board.

5     INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION

The Board is committed to transparency and accountability in its communication to shareholders, as well as to potential investors, analysts and the public. The shareholders shall be informed of all material matters affecting the Company and Group.

The Board is to ensure prompt and timely release and dissemination of quarterly results, announcements, circulars and notices to enable shareholders to keep abreast of material information relating to the Group.

The AGM is the principal forum for dialogue with shareholders. The Board also encourages shareholders to participate in the question and answer session at the AGM.

6     ACCESS TO INFORMATION AND INDEPENDENT ADVICE

The Directors, collectively or individually, may seek independent professional advice and information in the 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 30 May 2017. The Board Charter is available on EIG’s Corporate website at www.estheticsgroup.com. 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 any new regulations that may have an impact on the discharge of the Board’s responsibilities.