SECTION A: HOW THE BOARD OPERATES PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS Within a framework of prudent and effective controls, the Board is collectively responsible for the overall BIMB leadership, for promoting long-term sustainable growth, financial soundness, providing direction and oversight to the Management of the business and operations. The Board safeguards value-creation and plays a critical role in setting the right tone at the top. The Board ensures that the strategic plan of the Group supports long-term value creation and includes strategies on economic, environmental, social and governance (ESG) considerations thereby strengthening the integration of sustainability in the Group’s operations. The Board Charter The Board is guided by the Board Charter in discharging its duties and responsibilities effectively. The Board Charter sets out the principles and guidelines that are to be applied by the Board. The Board Charter authorises the Board to delegate the exercise of its powers to Board Committees. The delegation of authority as set out in the Board Charter is clear and ensures that the line of authority is in line with the legal and regulatory requirements. The delegation does not absolve the Directors from their duty to supervise the discharge of the delegated acts. The Board Charter is reviewed and updated from time to time to reflect relevant changes to the policies, procedures and processes as well as amendments to rules and regulations to ensure the document remains relevant and consistent with the applicable rules and regulations and recommended best practices. Aside from clearly identifying the respective roles and responsibilities of the Board, its Committees and Management and what is expected of them in terms of commitment, the Board Charter outlines the issues and decisions reserved for the Board. The Board Charter and the Terms of Reference (TORs) of the Board and the Board Committees are available on BIMB’s corporate website, www.bankislam.com. Matters Reserved for the Board The Board Charter and the Board of Directors’ TOR prescribe that the following matters are specifically reserved for the Board: CORPORATE GOVERNANCE OVERVIEW STATEMENT Strategic policy matters; Financial results and declaration of dividends; Significant operating and credit policies; Risk appetite setting; Capital management plan; Authority limits; Any corporate exercise which involves acquisition or divestment or strategic interest; Major acquisition of capital expenditure; A ppointment and remuneration of Directors, Shariah Supervisory Council (SSC) members, the Group Chief Executive Officer (Group CEO) and key Senior Management officers; Entry into any related party transaction; and Any new outsourcing proposals. BANK I SLAM MALAYS IA BERHAD 162
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