Board Charter

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1.1

Syarikat Pembinaan Setia Sdn Bhd was incorporated in Malaysia as a private company limited by shares on 8 August 1974. It was subsequently converted to a public company limited by shares on 2 September 1992 and changed its name to Syarikat Pembinaan Setia Berhad. On 19 January 1996, it assumed its current name S P Setia Berhad (“S P Setia” or “the Company”). The Company was listed on the Second Board of Kuala Lumpur Stock Exchange (now known as Bursa Malaysia Securities Berhad) (“Bursa Securities”) on 12 April 1993 and migrated to the Main Board (now known as Main Market) of Bursa Securities on 4 June 1996.

1.2

The vision, mission and values of S P Setia are as follows:

Vision

To be the BEST in all we do.

Mission

  1. To provide superior customer service and satisfy customer needs through a culture of excellence.
  2. To enhance shareholder’s value.
  3. To be a caring and responsible employer.
  4. To be mindful of our social responsibilities.

Setia Values

  1. We build life-long relationships with our customers.
  2. We are responsive to the expressed and unexpressed needs of our customers.
  3. We create magical moments at every opportunity.
  4. We embrace integrity and protect the privacy of our customers and the Company’s confidential information.
  5. We understand our role and responsibility in achieving SETIA’s success.
  6. We have the opportunity to learn and grow.
  7. We perform our work professionally and with continuous improvement.
  8. We are responsible for ensuring a safe and clean environment.
  9. We support and respect our fellow team members.
  10. We are TEAM SETIA.

2.1

The Board of Directors of S P Setia (“the Board”) is fully committed to maintaining a high standard of corporate governance throughout the S P Setia Group for long-term sustainable business growth and the protection and enhancement of shareholder’s value.

2.2

This Charter sets out the standard and principles governing the Board processes and outlines the roles, functions and responsibilities of the Board in accordance with the authority conferred by the Constitution of the Company along with the provisions of the Companies Act 2016 (“Act”), Bursa Securities Main Market Listing Requirements (“Listing Requirements”) and the principles set out in the Malaysian Code on Corporate Governance (“MCCG”).

2.3

The Charter was first adopted by the Board on 12 December 2013. This updated Charter was adopted on 14 May 2018. The Board shall review and enhance the Board Charter from time to time as it deems appropriate.

3.1

The Company is governed by the Board which assumes overall responsibility for the following:-

  • defining and determining the strategic direction;
  • directing future expansion;
  • implementing corporate governance;
  • identifying principal risks and ensure the implementation of appropriate systems to manage these risks;
  • human resource planning and development;
  • reviewing investments made by the Company;
  • verseeing the proper conduct of business;
  • reviewing the adequacy and the integrity of the Company’s internal control systems and management information systems;
  • pproving corporate structure; and
  • reviewing policies related to the Company such as branding, investor relations and shareholders communication programme.

3.2

The board governance model of S P Setia Group is as follows:

The board governance model of S P Setia Group

4.1

There is a schedule of matters reserved specifically for the Board’s decision and approval which includes:-

  • annual business plans and budgets;
  • strategic plans;
  • material acquisitions and disposals of assets not in the ordinary course of business;
  • investment in projects requiring major capital investment;
  • financial results and financial statements;
  • dividend recommendations including solvency tests;
  • changes to the composition of the Board and Board Committees;
  • changes relating to the share capital;
  • appointment of external auditors and their fees;
  • banking facilities; and
  • establishment of long-term or share incentive plans.

4.2

The Company has in place the Discretionary Authority Limits to guide the Board and Management on applicable thresholds for relevant approving authorities.

5.1

The Company’s Articles of Association (“AoA”) provides for a minimum of two (2) and maximum of fifteen (15) Directors1.

5.2

The Company must ensure that at least two (2) directors or one third (1/3) of the Board, whichever is higher, shall be Independent Non-Executive Directors (“INEDs”)2.

5.3

Members of the Board are appointed based on objective criteria, merit and with due regard for diversity. Diversity is considered from various areas including gender, age, ethnicity, cultural background, academic and professional qualification, experience and skills3.. The Board shall undertake an annual review of its composition to ensure effective functioning of the Board to meet the needs of the Company from time to time.

5.4

The Board comprises highly qualified and experienced individuals who have distinguished themselves in the legal, financial, engineering, accounting, banking and public service arenas. Their combined expertise and business experience provides much insight and a diversity of perspectives to lead and guide S P Setia Group in an increasingly complex and competitive business environment.


  • 1 Article 78 of the AoA
  • 2 Paragraph 15.02(1) of the Listing Requirements
  • 3 Practice 4.4 of the MCCG

6.1

Where necessary, the Board may comprise a majority of INEDs to ensure sufficient diversity and independence in the decision-making process.4.

6.2

The tenure of an INED, unless approved by the shareholders for such further period, should not exceed a cumulative term of nine (9) years.

6.3

Upon exceeding the tenure of nine (9) years, an Independent Director may continue to serve on the Board subject to the Director’s re-designation as a Non-Independent Director or upon approval being obtained from the shareholders to retain him/her as an INED.

6.4

A candidate for appointment as an INED must first provide to the Nomination and Remuneration Committee (“NRC”) a declaration and confirmation on his/her independence for the NRC’s consideration in his/her appointment.


  • 4 Practice 4.1 of the MCCG

7.1

There must be clear segregation of roles and responsibilities between the Chairman and the President/Chief Executive Officer (CEO) to ensure a balance of power and authority. The position of Chairman and President/CEO are separated and clearly defined. The Board may identify a Senior INED of the Board who serves as the designated contact to whom concerns may be conveyed.

7.2

Chairman

The Chairman provides leadership, leads the creation and monitoring of good governance practices in the Group and ensures that the Board fulfils its obligations and responsibilities effectively and in the best interest of the Company. The Chairman should promote open communication and create effective working relationship, both inside and outside the boardroom, and between the Board and the Management.

The Chairman shall approve the agenda of board meetings, and ensure that the Board meets as needed to discuss all key issues in a timely manner. The Chairman is responsible for conducting the Board meetings and ensuring that all Directors are properly briefed during Board discussions and adequate time is available for discussion of the agenda items. The Chairman will act as facilitator at meetings of the Board to ensure that no Board member, whether executive or non-executive, dominates the discussion, and that healthy debate takes place.

The Chairman also serves as Chair of all shareholders meeting of the Company and act as a spokesperson for the Board.

7.3

President/CEO and Executive Director

The President/CEO is responsible for the overall management of S P Setia Group, ensuring that strategies, policies and matters set by the Board are effectively implemented. The President/CEO will regularly review the performance of the heads of divisions and departments who are responsible for all functions contributing to the success of S P Setia Group.

With the support of the Management team, the President/CEO develops and proposes business strategies in pursuit of S P Setia Group’s objectives for the Board’s consideration.

The President/CEO also acts as a liaison between the Management and the Board and ensuring that key developments and/or issues are communicated to the Board accordingly.

7.4

Senior Independent Non-Executive Director

The principal role of the Senior INED is to provide a sounding board for the Chairman and to serve as an intermediary for the other INEDs where necessary.

The Senior INED also serves as a designated contact to whom concerns pertaining to S P Setia Group may be conveyed by shareholders and other stakeholders particularly for complaints relating to other Directors in accordance with the Group’s Whistleblowing Policy. The identity and contact of the Senior INED shall be disclosed in the annual report of the Company.

7.5

Independent Non-Executive Directors

The INEDs bring impartiality and scrutiny to Board deliberations and decision making to ensure that business and investment proposals presented by Management are fully deliberated and examined. They perform a key role by providing unbiased and independent views, advice and judgment, which take into account the interests of S P Setia Group and all its stakeholders including shareholders, employees, customers, business associates and the community as a whole.

8.1

The NRC is empowered to identify and recommend new appointments of Executive and Non-Executive Directors to the Board and Board Committees. In discharging this duty, the NRC will assess the suitability of an individual to be appointed to the Board and Board Committees by taking into account the individual’s skills, knowledge, expertise and experience, professionalism and integrity.

8.2

In accordance with the Constitution, all Directors who are appointed by the Board shall retire from office at least once every three (3) years but shall be eligible for re-election at the next Annual General Meeting (“AGM”). The Directors to retire in each year are those who have been longest in office since their last election or appointment5.

8.3

The Directors shall have powers at any time and from time to time to appoint any person to be a Director either to fill a casual vacancy or as an additional Director, but so that the total number of Directors shall not at any time exceed the maximum number fixed by the Constitution. Any Director so appointed shall hold office only until the next AGM and shall then be eligible for re-election, but shall not be taken into account in determining the number of Directors who are to retire by rotation at such meeting6.

8.4

A Director must not hold more than five (5) directorships in listed issuers7.


  • 5 Article 93 of the AoA
  • 6 Article 98 of the AOA
  • 7 Paragraph 15.06(1) of the Listing Requirements

9.1

Board meetings are scheduled in advance at the end of the prior calendar year to enable the Board members to plan their schedules accordingly.

9.2

A minimum of four (4) meetings a year shall be planned and additional meetings will be called at any time, as and when required.

9.3

The notice containing the agenda of the meeting and the relevant board papers shall be circulated by the Company Secretary to every member of the Board a week prior to the meeting.

9.4

All Board meetings shall be chaired by Chairman of the Board. Where the Chairman is absent, the Directors present shall elect one (1) of their members to be the Chairman of the meeting.

9.5

The quorum for each meeting shall be at least two (2) Directors8.

9.6

In the absence of a meeting, issues shall be resolved by way of circular resolutions, signed by majority of directors present in Malaysia9.

9.7

The Management team are responsible to furnish the requisite reports containing all necessary and essential information for the purpose of the meeting for the compilation and circulation by the Company Secretary prior to the meeting.

9.8

The appropriate key Senior Management personnel of the Company or its subsidiaries and external advisers shall attend such meeting based on invitation basis where their presence is considered appropriate as determined by the Chairman or the Executive Directors.

9.9

Minutes of all proceedings of the Board meetings signed by the Chairman of the meeting at which the proceedings were held or by the Chairman of the next succeeding meeting shall be evidence of the proceedings to which it relates.

9.10

Where a potential conflict of interest arises, the Director concerned shall declare his or her interest and abstain from the decision making process.


  • 8 Article 101 of the AoA
  • 9 Article 107 of the AoA

10.1

The Board delegates certain responsibilities to the Board Committees, all of which operate within defined terms of reference to assist the Board in the execution of its duties and responsibilities.

10.2

The respective Committees report to the Board on matters discussed and deliberated and/or makes recommendations to the Board for final decisions, except to the extent where certain matters are delegated by the Board to the Committees.

10.3

The Chairman of the respective Committees report to the Board and the minutes of Committee meetings are tabled to the Board for notation.

10.4

Board Committee meetings are scheduled in advance at the end of the prior calendar year to enable the Board Committee members to plan their schedules accordingly.

10.5

The Board Committees comprise the following:-

  1. Audit Committee (“AC”)
    The AC assists the Board in the effective discharge of its fiduciary responsibilities for corporate governance, timely and accurate financial reporting and development of sound internal controls.
  2. Risk Management Committee (“RMC”)
    The RMC assists the Board in overseeing the risk management process within S P Setia Group, leading the Group’s strategic direction in the management of the Group’s business risks, establishing and implementing a risk management framework and reviewing the effectiveness of the risk management framework.
  3. NRC
    The NRC assists the Board in proposing new nominees for the Board and Board Committees, developing and establishing competitive remuneration policies and packages, assessing the Directors on an ongoing basis, as well as to administer S P Setia Group Employees’ Long Term Incentive Plan (“LTIP”) in such manner as it shall in its discretion deem fit within such powers and duties as are conferred upon it by the Board as defined in the By-Laws of the LTIP.
  4. Executive Committee (“EXCO”)
    The EXCO assists the Board in the implementation of significant operational matters for the Company and its subsidiaries, approving award of contracts, project budgets and undertaking of projects, as well as reviewing proposals on acquisition or disposal of assets.

    The role of Non-Executive Directors in the EXCO is to provide check and balance to management decision making process.

11.1

The Board shall carry out the Board Effectiveness Evaluation (“BEE”) exercise annually to assess the performance and effectiveness of the Board as a whole, Board Committees and individual Directors.

11.2

The NRC is responsible to develop a set of criteria with target areas of focus to assist the Board in evaluating the performance and effectiveness of the Board, Board Committees and individual Directors.

11.3

As part of the BEE process, all INEDs of the Company are required to provide to the Board a yearly declaration and confirmation of their independence in compliance with the criteria set out in the Listing Requirements to facilitate the annual assessment of the INEDs by the Board.

12.1

The Company’s remuneration policy for Directors is designed to enable the Company to attract and retain experienced and knowledgeable individuals of the caliber needed to support the Company’s ambitious expansion plans in line with its overall objective of delivering long-term value to its shareholders. The remuneration packages are structured to incentivize and encourage creativity and innovation appropriate for a property, infrastructure and construction company of its size and complexity.

12.2

The NRC recommends to the Board the remuneration package for the Executive Directors. The remuneration package for Executive Directors is structured on the basis of linking rewards to corporate and individual performance. Performance is measured against the results achieved by S P Setia Group and individual achievement against targets set at the beginning of each year.

12.3

For Non-Executive Directors, the fee and allowance payable is determined based on the experience, level of expertise, responsibilities undertaken and time demanded of the Non-Executive Directors concerned.

12.4

The remuneration framework for the Non-Executive Directors adopted by the Board as set out below:-

No. Fee/Allowance Board Board Committee
Chairman
(RM)
Non-Executive Director
(RM)
Chairman
(RM)
Member
(RM)
1. Monthly Fixed Fee 50,000 12,000    
2. Monthly Fixed Allowance     3,000 2,000
3. Meeting Allowance per meeting based on attendance 1,500
4. Monthly Fixed Allowance for membership on board of directors of significant project/investment 5,000
5. Other Benefits Driver for Chairman, Directors and Officers Liability Insurance, medical, hospitalisation and travel insurance and other claimable benefits.

12.5

The fees payable to the Directors shall be subject to shareholders’ approval at the AGM of the Company10.


  • 10 Article 80 of the AoA

13.1

In addition to the Mandatory Accreditation Programme as required by Bursa Securities, the Directors are encouraged to attend various training programmes conducted by competent professionals and which are relevant to the Company’s operations and business.

13.2

The Company will, on an on-going basis, make available to the Directors, at the Company’s cost, professionally conducted programs to ensure Directors are acquainted with the latest development to equip themselves with the relevant knowledge and ideas to discharge their duties and sustain active participation during Board deliberations.

13.3

The Company also organises orientation programme for all newly appointed Directors to familiarise him/her with S P Setia Group’s business and governance process.

13.4

The Directors are required to disclose the trainings they have attended during a financial year in the Company’s Annual Report.11.


  • 11 Paragraph 15.08(3) of the Listing Requirements

14.1

The Directors (Executive and Non-Executive) shall have the same unrestricted right of access to all information relating to the business, operations and governance of S P Setia Group in a timely manner whether as a full Board or in their individual capacity, in furtherance of their duties.

14.2

All Directors have direct and unrestricted access to the advice and services of the Company Secretary and senior management and the Directors may collectively or individually seek external or independent professional advice and/or assistance from relevant experts, if required, in furtherance of their duties, at the Company’s expense.

S P Setia Group’s Code of Conduct and Business Ethics which was formalised since 2008 applies to all Directors and employees of the Group. The Code of Conduct serves as a road map to help guide actions and behaviors while working for and/or dealing with the Company to maintain high standards of business ethics and encourage performance with integrity.

S P Setia Group’s Whistleblowing Policy was approved in 2015. The Policy is aimed at protecting the integrity, transparency, impartiality and accountability where S P Setia Group conducts its business operations. The Whistleblowing Policy provides a structured reporting channel and guidance to all employees and external parties to whistleblow without the fear of victimisation.