MISC BERHAD 168 INTEGRATED ANNUAL REPORT 2023 169 www.miscgroup.com GOVERNANCE SECTION 12 Board Nomination & Remuneration Committee Report Directors retiring pursuant to Rule 21.8 • Datuk Abu Huraira Abu Yazid • Dato’ Tengku Marina Tunku Annuar • Chew Liong Kim ii. Board Performance Evaluation – Board, Board Committees and Individual Directors’ Assessment The performance of the Board and the Board Committees is tracked annually against the Board KPIs, using a Performance Evaluation Sheet as a tool. The Board KPIs focus on achievements based on three (3) criteria, i.e. Board Structure, Board Operations and Board Roles & Responsibilities. Each Director is required to give Rating ‘1’ for Best Practice, Rating ‘2’ for Meets Requirement or Rating ‘3’ for Areas of Improvement. The final ratings are then reviewed by the BNRC and the Board. The Board evaluation process and the Board Committees’ assessment for FY2023 was performed through self-assessment and peer review based on the following areas: Board Performance Evaluation Board and Board Committees Structure • Composition • Orientation, training and development • Evaluation of the Board Audit Committee (BAC), Board Nomination & Remuneration Committee (BNRC) and Board Sustainability & Risk Committee Board Operations • Timeliness • Adequacy of information • Access to Management Board Roles and Responsibilities • Strategic vision • Succession planning • Risk management and internal controls • Investor relations Board Committees Performance Evaluation • Effectiveness • Discharge of functions, duties and responsibilities in accordance with the TORs. The BNRC is also responsible for recommending to the Board, Directors who are standing for re-appointment or re-election at the Annual General Meeting (AGM) pursuant to Rule 21.8 of MISC’s Constitution. At the forthcoming 55th AGM of the Company, the following Directors will be retiring from the Board and being eligible, have offered themselves for re-election: In sourcing for suitable candidates, the Company utilises a variety of approaches and sources, including referrals from existing Board members and independent search firms. The nomination of Non-Independent Non-Executive Directors (NINEDs) to the Board is made by PETRONAS, being the majority shareholder of the Company. The potential candidates to assume the role of INEDs are first tabled to the BNRC for consideration and evaluated based on merit as well as suitability with the Company’s objectives and required attributes. Pursuant to the MISC Directors’ Fit and Proper Policy, all Board members are required to have the necessary qualities, competencies and experience that allows them to perform their duties and carry out the responsibilities required of the position in the most effective manner. Prior to the initial appointment or proposed re-election/re-appointment of a director, the individual concerned is required to complete a Directors’ Fit and Proper Declaration Form, which sets out the following overarching criteria: (a) Character and Integrity; (b) Experience and Competence; and (c) Time and Commitment. Diversity in terms of age, gender and ethnicity is also considered during the selection process. For more information on the MISC Directors’ Fit and Proper Policy, please refer to MISC’s corporate website at www.miscgroup.com Based on the latest Board performance evaluation and the BNRC’s review of the respective Directors’ Fit and Proper Declaration Forms, the BNRC is satisfied with the performance of the abovementioned Directors and agreed to endorse their proposed re-elections and recommended the same to the Board for further endorsement and recommendation to the shareholders for approval at the forthcoming AGM. Dato’ Tengku Marina Tunku Annuar abstained from deliberation and voting in respect of her re-election. In line with the MCCG, the Board Charter includes a policy which limits the tenure of INEDs to nine (9) years (without further extension) as well as the Board Diversity Policy. There are currently four (4) female directors in the Company which equates to 50% of the overall Board composition. For more information on the MISC Board Charter and Board Diversity Policy, please visit www.miscgroup.com Board Nomination & Remuneration Committee Report The BNRC also completed the Individual Directors Performance Assessment (IDPA) for self and peer assessment, which focused on the following areas: (i) Fit and proper; (ii) Contribution and performance; and (iii) Calibre and personality. There were no adverse findings arising from the Board performance evaluation and IDPA for FY2023. iii. Senior Management - Appointment and Succession Planning The BNRC is tasked with making appropriate recommendations to the Board for the appointment or renewal of contracts of employment of the President/Group CEO and MC members of the Company, taking into account the strategy and long-term succession planning of the MC composition. During the year under review, having conducted all relevant reviews and assessments, the BNRC deliberated and recommended the following changes to the MC composition: Zahid Osman Appointment as President/CEO of AET Pte. Ltd. Captain Raja Sager Muniandy Re-appointment as Vice President, Group Health, Safety, Security & Environment Afendy Mohamed Ali Appointment as Vice President, Group Finance Raja Azlan Shah Raja Azwa Appointment as Vice President, Corporate Planning The BNRC also has the responsibility of ensuring appropriate succession planning for MC members. Below is a brief illustration of the succession planning approach and process adopted by the MISC Group: 1. Identification of critical positions within the Group based on three criteria • Impact on business results • Sustaining the business • Uniqueness of positions 2. Identification of potential successors from pool of staff at General Manager and Senior Manager levels, nominated and assessed by the Leadership Team based on four criteria • Achievement: Sustainability of performance • Ability: Competence to deliver successfully • Agility: Traits and values which help adaptability • Aspiration: Passion, tenacity and commitment for self and the organisation 3. Deliberation and identification of successors of the MC based on three criteria, followed by mapping of shortlisted individuals to a maximum of three critical positions and rating of readiness levels: R1-Ready now R2-Ready within 12 months R3-Ready between 12 and 24 months R4-Ready within 36 months • Capabilities: Leadership and functional competencies • Contribution: Results orientation based on performance ratings and key highlights during the year • Cultural Fit: Demonstration of cultural beliefs and own career and personal aspirations 4. Formulation of an Individual Development Plan for each individual
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