Chemical Company of Malaysia Berhad Annual Report 2019

Strategy Setting The Board continues to give its focus to charter the strategic direction of the Group to ensure that the Group remains resilient and on a growth trajectory. As part of its deleveraging strategy, the Group has completed the disposal of its non-strategic asset in relation to the Nilai land for the year, of which the proceeds from the said disposal were used to reduce its gearing to a manageable level. The Group also pursued further expansion in its core businesses which included capacity expansion projects for its Chemicals business’ chlor-alkali plant in Pasir Gudang and calcium nitrate plant in Shah Alam as well as Polymers business’ advanced and innovative research and development centre, which was completed at its Bangi site. The Polymers business is also looking at expanding its cleaner production capacity by 2020. Projects which contribute to a more efficient operation and sustainable environment using green technology had also been implemented and initiated at both businesses. The Group had recently approved for an investment in a cogeneration plant (COGEN) for its PGW site and is currently installing photovoltaic solar panels for its Polymers’ business in Bangi. These investments are expected to reduce the Group’s operating cost going forward. Looking ahead, the Group will continue to implement measures to enhance its cost competitiveness, expand its markets both domestically and regionally and increase its market share in the markets that it is already represented. Focus would also be given on continuous improvement and maximizing value adding initiatives to solidify its business foundation. Review of corporate governance policies and procedures Following the expected implementation of Section 17A of the MACC Act 2009 in June 2020, the Group has taken steps to review all its corporate governance policies and procedures which include the anti-bribery and whistle blowing related policies. To ensure that all stakeholders understand and appreciate the revision to the said policies, road shows have been and will continue to be conducted for all its stakeholders through 2019 until 2020. The Group is in the midst of preparing its Business Partners Code of Conduct which will be part of the Group’s integrity and anti-corruption programme. Succession planning The Board has adopted a policy that the tenure of its directors, be it independent or non-independent, shall not exceed a cumulative term of nine years either in a consecutive service of nine years or cumulative service of nine years with interval. In acknowledging the importance of a seamless succession plan to safeguard the Group’s business continuity and retain the confidence of stakeholders, the Board had undertaken a review of its composition and had identified the skills, knowledge/experience, mindset and intrinsic values required to succeed the outgoing independent directors upon their departure. In this regard, the Company had appointed new board members from a diverse background of skills, professional experience, age, ethnicity and culture to provide different perspective and view-points for better decision making to replace the outgoing directors. At the same time, the Board has also reviewed the composition of each of its Board Committees to ensure that the Board Committees continue to function effectively upon the departure of its former board members. The Audit and Compliance Committee comprise wholly of independent directors while the Nomination and Remuneration Committee and Risk Management Committee comprise majority of independent directors. BUSINESS OVERVIEW FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE 79 ANNUAL REPORT 2019