Chemical Company of Malaysia Berhad Annual Report 2019

0 2 4 6 8 10 1 8 2 1 3 10 On an annual basis, the Board, Board Committees and individual Directors including Independent Directors are subjected to a rigorous evaluation process that effectively review their performance and assess their effectiveness. The assessment is administered using questionnaires that incorporate both qualitative and quantitative criteria, based on a self and peer rating assessment model. In addition to the aforementioned evaluation, Independent Directors are also subjected to an annual test of independence, which is based on a set of qualitative evaluation criteria, so as to ascertain their continued objectivity and impartiality. As an additional measure to mitigate the risk of entrenchment, CCM has codified a policy stipulation that limits the cumulative (consecutive or intermittent) tenure of Independent Directors to nine (9) years. The Board is of the view that such a quantitative measure would bring about the qualitative outcome of “independence in mind”. The Board has also made this policy applicable to all its non-executive directors to ensure good board dynamics and encourage fresh and new ideas. In 2018, the Board had agreed to enhance the assessment questionnaires to take into account the enumerations of the relevant authoritative corporate governance promulgations including Companies Act 2016, Capital Markets and Services Act 2007, MMLR and MCCG. Where applicable, references were also drawn from other better practices. Remuneration A fair remuneration package is critical to attract, retain and motivate Directors and Senior Management personnel. Towards this end, the Board has adopted a Remuneration Policy and Procedures to provide a formal and transparent process for setting the remuneration of Directors and Senior Management. The Board acknowledges that remuneration is a key component in driving talented and high-calibre individuals to run the business successfully. The Company has adopted a Remuneration Policy and Procedures for Directors and Senior Management whereby, for the Group Managing Director and other Senior Management personnel, the components parts of remuneration are structured so as to link rewards to performance whilst for Non- Executive Directors, the remuneration packages are based on their position in the Board and participation in boardroom activities. Based on the recent Report on Non-Executive Directors Remuneration 2017 released by KPMG, it was noted that the Company is one of the pay leaders in the industrial products sector. The Board, through its NRC, aims to undertake a review on the remuneration of Directors and Senior Management once every three years. Directors’ skillsets Human resources Investment, Business, Accounting and Finance Chemical Engineering Legal/Regulatory International Experience Leadership Position BUSINESS OVERVIEW FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE 73 ANNUAL REPORT 2019