DIRECTORS’ FIT AND PROPER POLICY

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  1. INTRODUCTION

    Engtex Group Berhad (“Company”) adopts the Directors’ Fit and Proper Policy (“Policy”) to formalise a rigorous and transparent process for the appointment and re-election of directors of the Company and its subsidiaries based on objective criteria and strives to ensure they are fit and proper in managing their duties and responsibilities in relation to their respective appointments and roles.  

     
  2. POLICY OBJECTIVES
     

    This Policy:

    a) sets out the fit and proper criteria for the appointment and re-election of directors of the Company and its subsidiaries.

    b) guides the Board of the Directors (“Board”) of the Company and its Nomination Committee (“NC”) in their evaluation of candidates who are being considered for new appointment onto the Board or are seeking for re-election.

     

  3. REFERENCES

    a) Malaysia Code on Corporate Governance (“MCCG”);
    b) Corporate Governance Guide (“CG Guide”) by Bursa Malaysia Securities Berhad (“Bursa Securities”); and
    c) Main Market Listing Requirements (“MMLR”) of Bursa Securities.
     

  4. ROLES AND RESPONSIBILITIES

    The Board, and the NC are responsible in the application of this Policy and for conducting the fit and proper assessments.
     

    Body/Function/Individuals

    Roles and Responsibilities

    Board of Directors

    • Consider and approve the appointment of new director recommended by its NC.
    • Evaluate the performance of directors who are members of the NC.
    • Ensure proper governance are in place for the appointment, performance evaluation and re-election of directors.

    Nomination Committee

    • Lead the selection and evaluation of candidates for new appointment onto the Board.
    • Lead the evaluation of retiring directors and advise the Board on their re-election.
    • Review and formalise the Board Skill Matrix to determine the desired skills, experience, qualifications, personal attributes and diversity required by the Board and the Company.

     

  5. FIT AND PROPER CRITERIA

     

    5.1    Character and Integrity

    In assessing the personal qualities such as honesty, integrity, diligence, independence of mind and fairness of Directors, the NC should consider matters including, but not limited to the following:

    a)    Probity
    i.    The individual is compliant with legal obligations, regulatory requirements and professional standards; and

    ii.    The individual has not been a subject of any adverse findings including being obstructive, misleading or untruthful in dealings with regulatory authorities or a court.
     
    b)    Personal Integrity
    i.    The individual has not perpetrated or participated in any business practices which are deceitful, oppressive improper (whether unlawful or not), or which otherwise reflect discredit on his professional conduct;

    ii.    The individual’s service contract in the capacity of Director or Management, had not been terminated in the past due to concerns on personal integrity; and

    iii.    The individual has not abused other positions (e.g. political appointment) to facilitate government relations for the Company and/or its subsidiaries (“Group”) in manners that contravene the principles of good governance.


    c)    Financial Integrity
    i.    The individual has demonstrated prudent management of personal financial affairs including managing debts satisfactorily; and

    ii.    The individual has been and will be able to fulfill his personal financial obligations as and when they fall due.


    d)    Reputation
    i.    The individual is of good repute in the financial and business community;

    ii.    The individual has not been the subject of criminal proceedings or enforcement action, in managing or governing an entity in the last 10 years;


    iii.    The individual has not been substantially involved in the management of a business or company which has failed, where that failure has been occasioned in part by deficiencies in that management.

     

    business or company which has failed, where that failure has been occasioned in part by deficiencies in that management.


    5.2    Experience and Competence

    In order to perform his role in an effective capacity, Board members must demonstrate the experience and competence requirements to understand the Company’s nature of business, inherent risks and the management process. The Board together with the NC should consider matters including, but not limited to the following:

    a)    Qualifications, Training And Skills
    i.    The individual possesses the appropriate education qualification, experience and expertise that is relevant to effectively fulfill the role and responsibilities of their respective positions and match the skill sets required by the Board Skill Matrix;

    ii.    The individual keeps knowledge current based on continuous professional development; and

    iii.    The individual possesses general management skills as well as understanding of corporate governance and sustainability issues.

    iv.    The individual possesses considerable understanding on the workings of a corporation; and

    v.    The individual possesses leadership qualities and high level of emotional intelligence. 


    b)    Relevant Experience and Expertise
    i.    The individual possesses relevant experience and expertise with due consideration given to past length of service, nature and size of business, responsibilities held, number of subordinates as well as reporting lines and delegated responsibilities;

    ii.    The individual had a career of occupying a high-level position in a comparable organisation and was accountable for driving or leading the organisation’s governance, business performance or operations; and

    iii.    The individual possesses commendable past performance records as gathered from the Board effectiveness evaluation. 


    5.3    Time and Commitment

    a)    Ability To Discharge Role Having Regard To Other Commitments
    i.    The individual is able to devote time as a Board members, having factored other outside obligations including concurrent board positions held by the director across listed issuers and non-listed entities (including not for profit and charitable organisations).

    b)    Participation And Contribution In The Board
    i.    The Director exhibits open mindedness to the views of others and ability to make considered judgment after hearing the views of others;

    ii.    The Director demonstrates willingness to devote time and effort to understand the businesses and exemplifies readiness to participate in events outside the boardroom;

    iii.    The Director manifests passion in the vocation of a Director; 

    iv.    The Director exhibits ability to articulate views independently, objectively and constructively; and 

    v.    The Director demonstrates willingness to participate actively in Board activities.

     

  6. FIT AND PROPER ASSESSMENT PROCESS
     

    The Board and/or its NC shall assess candidates/director individually and collectively, with due regard to the fit and proper criteria outlined in Section 5 of this Policy, prior to initial appointment and subsequent re-election or whenever the Board becomes aware of information that may materially compromise a director’s fitness and propriety.

    The Board shall perform the assessment objectively in the best interest of the Company and the sound conduct of the Company’s businesses.  Failure to meet certain criteria on their own may not necessarily mean failure to meet the fit and proper criteria.

    a)    Initial appointment - The assessment of fit and proper criteria for a candidate during the appointment stage shall be performed via diligence or screening (i.e. using established search databases or agencies) as well as obtaining declarations and relevant official documents from the candidate.  Assessment should also include consideration of the requirements of the established Board Skill Matrix for Board composition and diversity. If the assessment results are satisfactory, the NC will recommend the candidate to the Board for further deliberation and approval for the casual appointment. 

    b)    Re-election of Directors - The assessment of fit and proper criteria for a retiring director seeking for re-election shall be performed by way of obtaining declarations and relevant official documents from the candidate.  Assessment should also include consideration of the requirements of the established Board Skill Matrix for Board composition and diversity. If the assessment results are satisfactory, the NC will recommend the candidate to the Board for further deliberation and onward recommendation to the shareholders for their re-election at the Company’s next Annual General Meeting. 

     

  7. ADMINISTRATION

     

    The NC is the custodian of this Policy and shall recommend any change to the Policy to the Board for approval. This Policy shall be reviewed and updated as and when required.