MISC BERHAD 182 INTEGRATED ANNUAL REPORT 2023 183 www.miscgroup.com GOVERNANCE SECTION 12 Board Sustainability & Risk Committee Report Dear Shareholders, The Board Sustainability & Risk Committee (BSRC), formerly known as Board Governance & Risk Committee, was established on 1 January 2021 to enhance oversight on risk management matters and enable more effective anticipation and reaction in managing events and trends that could lead to disruptive changes to MISC’s business model. The scope of the BSRC encompasses governance, compliance and ethics, sustainability as well as health, safety, security and environment (HSSE). Composition and Meeting Attendance The BSRC comprises four (4) members, all of whom are Independent Non-Executive Directors. The BSRC’s Terms of Reference requires a majority of the BSRC members to be Independent Directors, which complies with the requirements of the MCCG. At least one member of the BSRC must also be a member of the Board Audit Committee (BAC) to foster a common understanding of the risk management and internal control systems and ensure co-ordination between the two standing Board Committees of MISC in its risk, internal controls and governance oversight roles. The composition of the BSRC is as follows: Members Date of Appointment as BSRC Member DATIN NORAZAH MOHAMED RAZALI Chairperson Independent Non-Executive Director 1 January 2021 CHEW LIONG KIM Member Senior Independent Non-Executive Director 15 January 2024 MOHAMMAD SUHAIMI MOHD YASIN Member Independent Non-Executive Director 1 January 2021 DATO’ TENGKU MARINA TUNKU ANNUAR Member Independent Non-Executive Director 1 April 2022 (1) Dato’ Sekhar Krishnan retired as Senior Independent Non-Executive Director of MISC and ceased being a member of the BSRC on 15 January 2024. (2) Dato’ Ab. Halim Mohyiddin retired as Independent Non-Executive Director of MISC and ceased being a member of the BSRC on 15 January 2024. The BSRC met five (5) times in 2023, with the BSRC Chairperson and all duly appointed BSRC Members in attendance for all meetings during their respective tenure. The President/Group CEO attends the BSRC meetings to facilitate discussions, as well as to provide the appropriate information and advice on relevant matters for the BSRC. BSRC meetings together with the tentative agendas, are scheduled in advance of any new financial year to allow the BSRC members to plan ahead and incorporate the year’s meetings into their respective schedules. The agenda and meeting papers are distributed to the BSRC members via a secured collaborative software, which eases the process of distribution of meeting papers and minimises leakage of sensitive information, as well as enabling the Directors to have full and timely access to the papers electronically at any given time. This practice is also consistent with the Board’s and Company’s commitment to sustainable practices. All proceedings of the BSRC meetings are duly recorded in the minutes and properly kept by the Company Secretary. Board Sustainability & Risk Committee Report Terms of Reference The BSRC is governed by its own Terms of Reference (TOR), which is consistent with the requirements of the MMLR and best practices of the MCCG. Functions of the BSRC BSRC Functions To review, evaluate, report and make appropriate recommendations to the MISC Board on the following matters: Risk Management Provide oversight on the risk management policies, framework and process. Sustainability Provide oversight on the sustainability strategy and initiatives. Compliance and Ethics Ensure effectiveness of the compliance and ethics programmes. Governance Determine the governance structure and monitor good governance practices. i. Risk Management Matters pertaining to risk management fall within the scope of the BSRC, which will act as a sounding board to Management and perform a deep dive and challenge on risk matters. The BSRC shall review, evaluate, report and make the appropriate recommendations to the Board on the following matters: (a) Adequacy and effectiveness of MISC’s Risk Management Framework and the ongoing activities (including reports on key strategic and business risks as well as environmental, social and governance risks) in identifying, evaluating, monitoring and mitigating risks; (b) Enterprise Risk Management Risk Register, to ensure that appropriate systems and processes are in place to effectively monitor and manage the identified risks; (c) Risk assessments conducted by the Project Risk Assessment Sub-Committee, on business proposals and new initiatives; (d) Determination of MISC’s level of risk tolerance; and (e) Any other matters as determined by the Board. ii. Sustainability As sustainability is a key feature of MISC’s strategy, the Board considers sustainability to be of paramount importance when determining the Board agenda. Hence, the BSRC has been identified as the custodian for MISC’s sustainability initiatives. The BSRC has oversight on Environmental, Social and Governance (ESG) matters, including climate change, health and safety, security and cybersecurity. The BSRC reviews, evaluates, reports and makes appropriate recommendations to the Board not only in regard to the determination of MISC’s sustainability strategy but also to ensure alignment with MISC’s business strategy. iii. Compliance and Ethics The BSRC reviews and makes the appropriate recommendations to the Board on the adequacy and effectiveness of MISC’s Compliance and Ethics strategy and objectives to continuously embed a compliance culture of strong corporate governance, business ethics and conduct within the organisation, through a management framework for business and operations to develop, manage and maintain the governance required, including continuous enhancement and monitoring to meet and sustain the compliance strategy and objectives across the MISC Group. iv. Governance The BSRC reviews, evaluates, reports and makes appropriate recommendations to the Board on the determination of MISC’s governance structure in alignment with MISC’s business strategy. The BSRC also monitors good governance practices across the Group to ensure consistency with the Board’s risk appetite, guided by applicable laws and regulations. For more information on the BSRC’s TOR, please refer to MISC’s corporate website at www.miscgroup.com
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