1.0 INTRODUCTION
1.1
The Board of Directors (“the Board”) is accountable and responsible for the performance and affairs of LYC HEALTHCARE BERHAD (“the Company”) and group of companies (“the Group”), including practicing a high level of good governance. All Board members are expected to show good stewardship and act in a professional manner, as well as upholding the core values of integrity and enterprise with due regard to their fiduciary duties and responsibilities.
2.0 PURPOSE OF CHARTER
2.1
The Board Charter sets out a list of specific functions that are reserved for the Board. The Board Charter addresses, which include amongst others, the Board obligations and liabilities, Directors’ Code of Ethics, role of the Board, Chairman and Managing Director, appointment of new Directors, the right balance and composition of the Board, remuneration policy and the establishment of Board Committees together with the required mandate and activities.
3.0 AUTHORITY
3.1
The Board derives its authority to act from the Constitution of the Company and the law and regulations governing companies in Malaysia.
4.0 BOARD SIZE AND COMPOSITION
4.1
The Board should be comprised of individuals with comprise suitably qualified individuals with diverse set of skills, knowledge, expertise and experience to effectively discharge their role as company Director. The composition and size of the Board is such that it facilitates the making of informed and critical decisions.
4.2
The number of Directors shall not be less than two (2) and not more than twelve (12). The appointment of Directors shall be recommended by the Nomination Committee and approved by the Board.
4.3
Pursuant to the Malaysian Code on Corporate Governance, at any one time, at least half (1/2) of the Board members should comprise Independent Directors.
4.4
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 chairman or the Chief Executive Officer / Managing Director have failed to resolve them.
4.5
The positions of chairman of the Board and Chief Executive Officer / Managing Director should be held by different individuals.
4.6
The chairman of the Board should not be a member of Audit Committee, Nomination Committee and Remuneration Committee.
4.7
The composition and size of the Board shall be reviewed from time to time to ensure its appropriateness.
5.0 INDEPENDENCE OF DIRECTORS
5.1
An Independent Director is independent of management and free of any business relationship that could materially affect the exercise of his independent judgement.
5.2
The Nomination Committee (NC) reviews the independence of each Independent Non-Executive Director annually or whenever necessary, in light of information relevant to this assessment as disclosed by each Independent Non-Executive Director to the Board.
5.3
The Independent Non-Executive Directors provide objective and independent views and judgement in decision-making processes of the Board covering issues of strategy, performance and risks. The presence of the Independent Non-Executive Directors fulfils a pivotal role in corporate governance accountability and ensures the interests of all shareholders are indeed taken into account by the Board.
5.4
The Independent Directors have the right to seek the advice of the Company Secretary, the Auditors, the Internal Auditors and other independent professional advice at the Company’s expense if so required.
5.5
The tenure of an independent director does not exceed a term limit of nine years. Upon completion of the nine years, an independent director may continue to serve on the board as a non-independent director. If the board intends to retain an independent director beyond nine years, it should provide justification and seek annual shareholders’ approval.
5.6
The tenure of an Independent Director shall not more than a cumulative period of twelve (12) years from the date of such person’s first appointment as an Independent Director.
5.7
An individual who had cumulatively served as an Independent Director for more than twelve (12) years is required to provide justification and explanation on why there is no other eligible candidate and that he/she had observed the requisite three (3) year cooling off period in the statement accompanying a notice of Annual General Meeting and the immediate announcement in relation to the appointment of such Independent Director.
5.8
An Independent Director shall be a person who is not, and has not been within the last 3 years, an officer (except as an independent director) of the Company. For this purpose, “officer” has the meaning given in Section 2 of the Companies Act 2016.
6.0 APPOINTMENT OF DIRECTOR
6.1
The Company has in place its procedures and criteria for appointment of new Directors. All candidates for appointment are first considered by the NC, taking into account the mix of skills, competencies, experience, professionalism and other relevant qualities required to well manage the business, with the aim to meet the current and future needs of the Board composition. The NC also evaluates the candidates’ character and ability to commit sufficient time to the Group. Other factors considered for appointment of Independent Director will include the level of independence of the candidate.
7.0 ELECTION AND RE-ELECTION OF DIRECTORS
7.1
In accordance with the Constitution of the Company, all Directors including Executive Directors are subject to retirement by rotation at least once in every three years and are eligible for re-election. One-third of the Directors or nearest to one-third (1/3) of the Board shall retire at each Annual General Meeting (“AGM”).
7.2
Any person appointed by the Board either to fill a casual vacancy or as an addition to the existing Directors, shall hold office until the next AGM and shall then be eligible for re-election.
8.0 NEW DIRECTORSHIP AND TIME COMMITMENT
8.1
Directors will notify the Company Secretary upon their appointment of directorship in other companies and any significant commitments outside the Company.
8.2
The Directors should be committed in allocating sufficient time to the Company in order for the Board to function effectively.
9.0 DIRECTORS' TRAINING
9.1
All newly appointed Directors will have to attend the Mandatory Accreditation Programme as required by Bursa Malaysia Securities Berhad. All Directors shall continue to update their knowledge and enhance their skills by attending trainings and seminars relevant to them to enable them to effectively discharge their duties. The Board will assess the training needs of the Directors from time to time and ensure appropriate update of skills and knowledge are in place.
10.0 DUTIES AND RESPONSIBILITIES
10.1 Roles of the Board of Director
In discharging its stewardship, the Board is constantly mindful of safeguarding the interests of the Group’s stakeholders and is ultimately responsible for the performance of the Group. The Board assumes the following core responsibilities:-
10.1.1
promote good corporate governance culture within the Group which reinforces ethical, prudent and professional behaviour;
10.1.2
review, challenge and decide on management’s proposals for the Group, and monitor its implementation by management;
10.1.3
supervise and assess management performance to determine whether the business is being properly managed;
10.1.4
reviewing and adopting strategic plans for the Group;
10.1.5
ensure that the strategic plan of the Group supports long-term value creation and includes strategies on economic, environmental and social considerations underpinning sustainability;
10.1.6
overseeing the conduct of the Group’s business to evaluate whether the business is being properly managed;
10.1.7
identifying principal risks and ensuring the implementation of appropriate systems to manage these risks;
10.1.8
set the risk appetite within which the Board expects management to operate and ensure that there is an appropriate risk management framework to identify, analyses, evaluate, manage and monitor significant financial and non-financial risks;
10.1.9
ensure there is a sound framework for internal controls and risk management;
10.1.10
reviewing the adequacy and the integrity of our Group’s internal control systems and management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines;
10.1.11
ensure that senior management has the necessary skills and experience, and there are measures in place to provide for the orderly succession of Board and senior management;
10.1.12
succession planning including appointing, training, fixing the compensation of and, where appropriate, replacing senior management;
10.1.13
ensure that the Company has in place procedures to enable effective communication with stakeholders;
10.1.14
developing and implementing an investor relation programme or shareholder communication policy for the Company; and
10.1.15
reviewing the adequacy and the integrity of the Group’s internal control systems and management information systems including systems for compliance with applicable laws, regulations, rules, directives and guidelines.
10.1.16
establishing a code of conduct and ensuring of its compliance.
10.1.17
ensuring the shareholders is well informed of the Company’s activities via timely announcements and general meetings.
10.1.18
in presenting the annual audited financial statements and quarterly announcements of results to shareholders, the Board takes responsibility to present a balanced and meaningful assessment of the Group’s position and prospect and to ensure that the financial statements are drawn up in accordance with the provisions of Companies Act, 2016 and applicable accounting standards in Malaysia and;
10.1.19
ensuring that the Company adheres to high standards of ethics and corporate behaviour.
10.2 Matters Reserved for the Board’s Decision
The Board reserves full decision-making powers on the following matters:-
10.2.1
Conflict of interest issues relating to a substantial shareholder or a Director including approving related party transactions;
10.2.2
Material acquisitions and disposition of assets not in the ordinary course of business including significant capital expenditures;
10.2.3
Strategic investments, mergers and acquisitions and corporate exercises; and
10.2.4
Limits of authority.
10.3 Roles of the Chairman
The Chairman is an Independent Non-Executive Director and responsible for leading the Board at Board Meetings and to ensure efficient functioning of the Board. The following are the roles and responsibilities of the Chairman:-
10.3.1
ensure that the Board functions effectively and is well informed of the Company’s activities and Management’s recommendation;
10.3.2
ensuring the integrity and effectiveness of the governance process of the Board;
10.3.3
leading the board in establishing and monitoring good corporate governance practices in the Company;
10.3.4
leading board meetings and discussions;
10.3.5
encouraging active participation and allowing dissenting views to be freely expressed;
10.3.6
managing the interface between board and management;
10.3.7
facilitate the effective contribution of all Directors and ensuring constructive relations be maintained between Directors and between the Board and management;
10.3.8
ensure effective communication between the Board and Management, its shareholders and stakeholders;
10.3.9
ensuring that there is regular and effective evaluation of the Board’s performance; and
10.3.10
ensure the Company’s general meetings - are conducted with responsibility and accountability, supplying relevant information to shareholders and encouraging participation of shareholders.
10.4 Roles of the Managing Director ("MD")
The MD is responsible to the Board for the daily management and corporate activities of the Company, having the following roles and responsibilities:-
10.4.1
develops the corporate plans and the strategic direction of the Company.
10.4.2
ensure that policies and systems are in place for the Company’s operations to be conducted properly and efficiently.
10.4.3
ensure effective communication with Senior Management to achieve the Company’s goals and objectives.
10.4.4
monitors performance results against plans.
10.4.5
takes remedial actions where necessary.
10.4.6
ensures the Financial Reporting of the Company represents a clear and balanced assessment of the Company’s financial position in its quarterly financial announcements and the year-end financial statements.
10.4.7
ensures timely release of announcements on financial results and material contracts or information that may affect investors’ decision making.
10.4.8
ensures Management conducts regular dialogues with analysts to convey information on Company's performance and other matters affecting shareholders’ interests.
10.5 Role of Independent Directors
Independent Directors are those who have no direct or indirect pecuniary interest in the Company other than the remuneration for their services as members of the Board of Directors and Board committees of the Company and the Group which as defined under Rule 1.01 of the ACE Market Listing Requirements.
The role of Independent Directors is to constructively challenge and help develop proposals on strategy include, inter alia:
10.5.1
to make independent assessment of the information, reports or statements, having regard to the directors’ knowledge, experience and competence, to provide independent view and demonstrate objectivity in reviewing and challenging the management’s proposals at meetings;
10.5.2
to devote sufficient time to update their knowledge and enhance their skills through appropriate continuing education programmes, so as to keep abreast of industry issues, market development and trend, and enable them to sustain their active participation in board deliberations; and
10.5.3
act as a channel of communication between Management, shareholders and other stakeholders, and provide the relevant checks and balances, focusing on shareholders’ and other stakeholders’ interests and ensuring that high standards of corporate governance are applied.
11.0 BOARD MEETINGS
11.1
The Board meets on a scheduled basis of at least four (4) times a year at quarterly intervals with additional meetings convened when necessary. During Board meetings, the Managing Director and members of the Management team, will table and present reports for the Board’s consideration, deliberation and direction.
11.2
All Directors will be provided with advance written notice of Board meetings, including those called at short notice. Agenda, board papers and any other documents are made available in advance (at least 5 business days before the meeting date) to the Board to facilitate well-informed Board deliberation and decision-making. In addition, members of the Management are frequently invited to the Board meetings to explain and clarify the items tabled to the Board.
11.3
Directors are required to inform the Board of conflicts or potential conflicts of interest they may have in relation to particular items of business transacted by the Group or the Company. The interested Directors should abstain themselves from discussion or decisions on matters in which they have a conflicting interest.
11.4
The Chairman of the Audit Committee, Remuneration Committee and NC would inform the Board on key issues deliberated by the Board Committees at their respective meetings which require the Board’s notice, direction or approval.
12.0 BOARD COMMITTEES
12.1
The Board, in discharging its fiduciary duties, may from time to time establish Committees as it considers necessary to assist it in carrying out its responsibilities.
12.2
The Board has established (3) Board Committees:
Audit Committee - Assist and support the Board’s responsibility to oversee the Group’s operations by providing means for review of the Group’s processes for producing financial data, its internal controls, its risk management and independence of the Company’s external and internal auditors.
Nomination Committee - Oversees matters related to the nomination of new Directors, future Chairman and MD, annually review the required mix of skills, experience and other requisite qualities of Directors as well as the annual assessment of the effectiveness of the Board as a whole, its committees and the contribution of each individual Director, assess fit and properness of the proposed new Directors prior to the appointment to the Board and Director who is seeking re-election at the Company’s Annual General Meeting.
Remuneration Committee - primarily responsible to recommend to Board the remuneration of the MD, Executive Director, Non-Executive Directors and Senior Managements in all its form, drawing from outside advice if necessary.
12.3
Each committee entrusted with specific tasks and operates within clearly defined terms of reference approved by the Board. 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.
12.4
The respective committees’ terms of reference are available for reference at the Company’s website.
13.0 ACCESS TO INFORMATION AND INDEPENDENT PROFESSIONAL ADVICE
13.1
The Directors have individual and independent access to the advice and dedicated support services of the Company Secretaries in ensuring the effective functioning of the Board. The Directors may seek advice from the Management on issues under their respective purview. The Directors may also interact directly with the Management, or request further explanation, information or updates on any aspect of the Company’s operations or business concerns from them.
13.2
In addition, the Board may seek independent professional advice at the Company’s expense on specific issues to enable it to discharge its duties in relation to matters being deliberated.
14.0 REMUNERATION OF DIRECTORS AND SENIOR MANAGEMENT
14.1
The Remuneration Committee (RC) is responsible for recommending to the Board on the remuneration framework as well as the remuneration package of Executive Directors (including Senior Management) to ensure that rewards commensurate with their contributions to the Group’s growth and profitability in order to align the interest of the Directors with those of the shareholders. The RC also ensures the level of remuneration for Non-Executive Directors and Executive Directors are linked to their level of responsibilities undertaken and contributions to the effective functioning of the Board.
14.2
The Company’s remuneration policy for Directors and Senior Management is formulated to attract and retain individuals of the necessary caliber needed to run the business of the Group successfully. The remuneration is structured to link experience, expertise and level of responsibility undertaken by the Directors. The Directors play no part in deciding their own remuneration and shall abstain from discussing or voting on their own remuneration.
15.0 BOARD EVALUATION AND PERFORMANCE
15.1
The NC evaluates the performance of the Board as a whole on an annual basis.
15.2
This shall take the form of a questionnaire to be completed by each of the members of the NC. The NC, upon discussion of the results, will present the findings to the Board.
15.3
The Board Committees shall also regularly be reviewed by the Board to ascertain their performance and effectiveness.
16.0 INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION
16.1
The Board is mindful on the importance of maintaining proper corporate disclosure procedures with the aim to provide shareholders and investors with comprehensive, accurate and quality information on a timely basis. Personnel and working team for preparing the disclosure will conduct due diligence and proper verification, as well as coordinate the efficient disclosure of material information to the investing public.
16.2
The Company’s website incorporates an Investor Relations (“IR”) section which provides all relevant information on the Group and is accessible by the public. This section enhances the IR function by including all announcements made by the Company, annual reports, board charter and the corporate and governance structure of the Company. The Company will enhance the disclosures on its website for broader and effective dissemination of information to its stakeholders from time to time.
16.3
In addition to the above, time will be allocated during AGM for dialogue with shareholders to address issues concerning the Group. From the Company’s perspective, the AGM also serves as a forum for Directors and Management to engage with the shareholders personally to understand their needs and seek their feedback. The Board welcomes questions and feedback from shareholders during and at the end of shareholders’ meeting and ensures their queries are responded in a proper and systematic manner.
16.4
The Board will focus its efforts on the following best practices to enhance the effectiveness of the General Meeting:-
16.4.1
Notice of an Annual General Meeting to be given at least twenty-eight (28) days prior to the meeting.
16.4.2
The Chairman provides reasonable time for discussion at the meeting. The Chairman of the Audit, Nomination and Remuneration Committees provide meaningful response to questions addressed to them.
16.4.3
The Board ensures the Annual General Meeting and Extraordinary General Meeting of the Company are conducted in an efficient manner and serves as a crucial mechanism in shareholders communications. Key ingredients behind this include the supply of comprehensive and timely information to shareholders and the encouragement of active participation at the AGM.
16.4.4
The complete minutes of the general meeting will be published on the Company’s website within thirty (30) business day after the meeting.
16.5
In compliance with the recommended best practice by the Code, the Board has appointed Chairman of the Audit Committee to whom minority shareholders could convey their concern over the operations of the Group. His contact information is as follows:
17.0 COMPANY SECRETARIES
17.1
The Company Secretaries play an advisory role to the Board in relation to the Company's constitution, Board’s policies and procedures and compliance with the relevant regulatory requirements, codes or guidance and legislations. The Company Secretaries support the Board by ensuring that all Board meetings are properly conducted and deliberations at the Board and Board Committee meetings are well captured and recorded. The Company Secretaries also keep the Board updated on changes in the Bursa Malaysia Securities Berhad (“Bursa Securities”) ACE Market Listing Requirements (“Listing Requirements”) and directives issued by the regulatory authorities, and the resultant implications to the Company and the Directors in relation to their duties and responsibilities.
17.2
The Board shall ensure that the Company Secretaries remain competent to fulfil the function for which they have been appointed. In this respect, the appointment and removal of the Company Secretaries are matters for the Board to consider as a whole.
18.0 CODE OF ETHICS AND CONDUCT
18.1
The Directors are required to observe the Company’s Corporate Code of Ethics. The core areas of conduct under the Code include the following:
18.1.1
compliance with all applicable laws, rules and regulations
18.1.2
conflict of interest;
18.1.3
confidential information;
18.1.5
protection of assets;
18.1.6
knowledge and information;
18.1.7
employment practices; and
18.1.8
reporting of illegal and unethical behavior
18.2
The Board will review the Code regularly to ensure that it continues to remain relevant and appropriate. The Code is made available for reference in the Company’s website.
19.0 REVIEW OF BOARD CHARTER
19.1
The Board will review this Charter from time to time and make any necessary amendments to ensure they remain consistent with the Board’s objectives, current law and practices. Any updates to the principles and practices set out in this Charter will be made available on the Company’s website.
This Board Charter has been revised and approved by the Board of Directors on 22 July 2022.