CORPORATE GOVERNANCE OVERVIEW STATEMENT Cont’d PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS cont’d I. Board Responsibilities cont’d Governance of Sustainability cont’d The SC presented updates to the Board on sustainability performance review of the Group related to climate protection, water stewardship, waste management, occupational health and safety, and gender diversity at the quarterly Board meetings as well as keeps the Board updated on any latest ESG development and initiatives of the Group. The Board had undertaken relevant trainings to stay abreast and understand the latest sustainability issues. The relevant training and programs in relation to Sustainability are shown in the following: (a) Climate governance – a standing item in board agendas (b) Update Brief on climate risk and ESG initiatives (c) Exercising Sustainability Governance and Oversight – What is next for Press Metal (d) ESG Frameworks: Understanding the Alphabet Soup (e) Understanding Task Force on Climate-Related Financial Disclosures (“TCFD”) (f) Materiality: Determining ESG Topics That Matter (g) JC3 Upskilling Sustainability Training (JUST) Series 3 – A Passion for Purpose, Delivering a Just Transition to Net Zero (h) TCFD 101 - Climate Disclosure Training (i) Climate Risk Management and Scenario Analysis (j) Developing Malaysia’s Roadmap to Net Zero (k) Understanding the Requirements in Bursa Malaysia’s Enhanced Sustainability Reporting Framework During the financial year under review, the Company engaged an independent consultant to facilitate the formulation of ESG linked incentive-based compensation policy for Senior Management personnel (covering C-Suite members and Heads of Divisions/Departments) of the Group. The policy defines how remuneration components should be linked to the ESG metrics, particularly the material matters that are considered most important to the Group’s business and stakeholders as well as approaches on how ESG metrics may be incorporated into various incentive plans. The engagement includes a review of existing ESG metrics linked to the incentive portion of the Group CEO’s compensation and the provision of a payout formula which is considered independently when establishing the overall incentive payout for the Group CEO. The ESG-linked Executive Incentive Remuneration Framework for Key Senior Management Personnel who are in charge of the Group’s ESG performance was adopted by the Board in February 2023. Malus and Clawback procedures are part of the ESG-linked Executive Incentive Remuneration Framework. Full details of the Group’s Sustainability efforts can be found in the Sustainability Report on pages 78 to 194 of this Annual Report. II. Board Composition Board Size, Composition and Diversity During the financial year under review, the Board comprises ten (10) members, of whom five (5) are Executive Directors and five (5) are Independent Non-Executive Directors. The composition of the Board complies with Paragraph 15.02 of the MMLR which requires at least two (2) directors or one-third (1/3) of the Board, whichever is higher, must be independent. The size and composition of the Board are reviewed periodically by the NCGC to ensure that the size of the Board is appropriate and conducive for effective discussion and decision-making, with a strong element of independence. No individual or small group of individuals dominates the Board’s decision-making process. The Independent Non-Executive Directors have conducted themselves professionally, are clear with the objectives and their fiduciary role, with independent insights in doing what is right for the Company and all stakeholders. The NCGC, with the concurrence of the Board, is of the view that the current Board size is optimal based on the Group’s operation and that it reflects a fair mix of financial, technical and business experiences that are important to the stewardship of the Group. ANNUAL REPORT 2022 48
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