The Board of Directors of Stella Holdings Berhad (formerly known as Merge Energy Bhd) acknowledges the importance of good corporate governance and is committed to ensure that the highest standards of corporate governance are practised throughout the Group.
2. Purpose of the Board Charter
The purpose of this Board Charter is to regulate how business is to be conducted by the Board in accordance with the principles of good corporate governance. The Board Charter sets out the specific responsibilities to be discharged by the Board members collectively, and the individual roles expected from them.
3. Objectives of the Board
The objective of the Board is to essentially review, approve and contribute to the long term strategy of the Group, monitoring of business performance and review of the adequacy and integrity of the Group’s internal control system, by bringing onto the board their experiences, knowledge and expertise.
A board should also be structured to protect the interests of shareholders and relevant stakeholders whilst enabling the company to compete in a challenging market environment.
The Board should have a balanced composition of Executive and Non-executive Directors, with one third (1/3) Independent Non-Executive Directors. Collectively, the Board should comprise of members from wide range of business with diverse set of skills and experience which is vital for efficiency, management of the Group’s businesses and the strategies success of the Group.
The Constitution of the Company provides for a minimum of two (2) directors and a maximum of eleven (11) directors.
The tenure of an Independent Director, unless approved by the shareholders for such further period, shall not exceed a cumulative term of 9 years.
Upon exceeding the tenure of 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 as an Independent Director.
The composition and size of the Board are reviewed from time to time to ensure its efficiency.
5. Duties and responsibilities of the Board
5.1 Reviewing and adopting strategic plans for the Group and responsible monitoring the implementation by the management;
5.2 Overseeing and evaluating the conduct of the Group’s business;
5.3 Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures;
5.4 Establish succession planning;
5.5 Ensure ethical behaviour and compliance with the relevant laws and regulations, audit and accounting principles, and the Group’s own governing documents and codes of conduct which include appropriate communication and feedback channels which facilitate whistleblowing and ensure the compliance of the codes of conduct.
5.6 To encourage its members to have access to appropriate continuing training and/or education programmes.
5.7 Appoint a committee of Directors composed, wholly or mainly of Non- Executive Directors, a majority of whom are independent, with the responsibility of proposing new nominees for the Board. The decision as to who shall be nominated should be the responsibility of the full Board after considering the recommendations of such a committee.
5.8 Set remuneration at levels which are sufficient to attract and retain the Directors needed to run the Company/Group successfully. The responsibilities of Director’s remuneration are discharged to the Board Remuneration Committee;
5.9 Establish an overall remuneration policy and framework and performance management philosophies for key management positions within the Group;
5.10 Ensure the Company’s financial statements are true and fair and conform with the laws; and
5.11 Reviewing the adequacy and the integrity of the management information and internal controls systems of the Group.
6. Matters Reserved for the Board
There is a schedule of matters reserved specifically for the Board’s decision and approval which includes:-
(i) Strategic plan
(ii) Material acquisition and disposals of assets not in the ordinary course of business
(iii) Investment in projects requiring major capital investment
(iv) Financial results and financial statements
(v) Related party transaction of a material nature
(vi) Dividend recommendations
(vii) Changes in the composition of the Board and Board Committees
(viii) Appointment of external auditors and their fees
(ix) Establishing of long-term share incentive plans
(x) Any other specific matters nominated by the Board from time to time
7. Chairman of the Board
The role of the Chairman and Chief Executive Officer 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 Chief Executive Officer has overall responsibility for the day-to-day management of the business and implementation of the Board’s policies and decisions.
The responsibilities of the Chairman, amongst others are as follows:-
7.1 Provides leadership to the Board and ensure its effectiveness of all aspects of its role;
7.2 The Chairman shall preside at all Board Meetings, unless he/she so delegates to another Senior Director with the consent of the Board;
7.3 To facilitate the effective contribution of all Directors at Board meetings; the Chairman should encourage a healthy debate on the issue and bring to the Board objectivity and independence in the deliberations;
7.4 To maintain regular dialogue with the Chief Executive Officer over all operational matters and shall consult with the other Board members on any matter that gives him/her cause for concern;
7.5 Maintains an effective communications which enables both the Board and Management to communicate effectively with its shareholders, stakeholders and the public generally; and
7.6 Practices good corporate governance and ensures that Executive Directors look beyond their Executive functions and accept their share of responsibilities of governance.
8. Chief Executive Director (“CEO”) and/or Executive Directors
The Chief Executive Officer and Executive Directors are responsible to ensure due execution of strategic goals, effective operation within the Company and/or Group, and to explain, clarify and inform the Board on matters pertaining to the Company/Group.
The responsibilities of the CEO and/or Executive Directors, amongst others are as follows:-
8.1 Supervise and control the general management and operation of the Group;
8.2 Develops and oversees the implementation of corporate strategies for the Group, runs the day-to-day business;
8.3 The CEO is accountable to the Board for the achievement of the Company/Group’s goals and for the observance of the Management’s limitation;
8.4 To assess business opportunities which are of potential benefit to the Group;
8.5 To bring material and other relevant matters to the attention of the Board in an accurate and timely manner;
8.6 The CEO serves as the chief spokesperson for the Group and attends the Nomination Committee and Remuneration Committee meetings;
8.7 Maintain an effective communications which enables both the Board and Management to communicate effectively with its shareholders, stakeholders and public generally; and
8.8 Liaise with the Chairman and carries out other duties as directed by the Board as a whole.
9. Senior Independent Non-Executive Director
The Senior Independent Non-Executive Director serves as a designated contact to whom concerns pertaining to the Group may be conveyed by the shareholders and other stakeholders.
10. Non-Executive Director
The Non-Executive Directors perform a key role by contributing and providing unbiased and independent views, advice and judgment, which take into account the interests of the Group and all its stakeholders including shareholders, employees, customers, business associates and the community as a whole.
11. Board Committee
The Board may from time to time establish Committees as and when 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:-
(i) Audit Committee
The Audit Committee assists and support the Board primarily in the area of financial reporting in liaison with the external auditors and the Group’s system of risk management and internal control in liaison with the internal auditors .
(ii) Nomination Committee
The Nomination Committee assists the Board on matters relating to the selection and assessment of Directors.
(iii) Remuneration Committee
The Remuneration Committee assists the Board on matters relating to the remuneration of Directors.
(iv) Risk Management Committee
The Risk Management Committee assists the Board in overseeing the risk management process within the Group.
11.1 The Committees shall operate under clearly defined terms of reference.
11.2 The Committees are authorised by the Board to deal with and to deliberate on matters delegated to them within their terms of reference.
11.3 There shall be transparency and full disclosure from the Board Committee to the Board, except where the Committee has been mandated otherwise by the Board.
The Board should meet regularly, with due notice of issues to be discussed and should record its conclusions.
The Board shall meet at least four (4) times a year with additional meetings convened when necessary.
Scheduled Board meetings are structured with a pre-set agenda. The Board members are provided with Board papers which contain management and financial information and other matters to be discussed prior to the meetings to enable the Directors to obtain further explanations and/or clarifications if necessary, in order to ensure the effectiveness of the proceeding of the meetings.
Board members are required to inform the Board of conflicts or potential conflicts of interest they may have in relation to particular matters of business transacted by the Company and/or Group.
Where necessary, the services of other senior management or external consultants will be arranged to brief and assist the Directors to clear any doubt or concern.
13. 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 expenses, so as to ensure the Directors are able to make independent and informed decisions.
14. Code of Ethics and Conduct
The Directors of the Group adopted the Directors’ Code of Ethics as prescribed by the Companies Commission of Malaysia. The Code of Ethics sets out the requirement for the Directors to observe the code at all times in relation to corporate governance, relationship with shareholders, employees, creditors and customers as well as social responsibility and the environment.
15. Review of the Board Charter
The Board Charter will be periodically reviewed and updated in accordance with the needs of the Company/Group and any new regulations that may have impact on the discharge of the Board’s duties and responsibilities.