BIMB Integrated Annual Report 2017

INDEPENDENCE ASSESSMENT OF INDEPENDENT DIRECTORS BHB recognises the important contribution of the Independent Directors in line with the requirements under the BNM CG Policy where a majority of its Directors must be independent. The presence of majority Independent Directors within the current Board facilitates an effective and independent oversight over the Management providing the necessary checks and balances in ensuring the Company operates in a safe and sound manner. To ensure the independence of the Independent Directors are maintain at all time, all Independent Directors are required to declare their independence on a monthly basis. Through the annual evaluation and independence assessment of the Directors, the Independent Non-Executive Directors are also assessed on their ability to provide strong, valuable contributions to the Board’s deliberations, without interference and acting in the best interest of BHB. For the period under review, the NRC has considered the independence of each Independent Director in office and has concluded that each Independent Director has met the independence criteria as set out in the Listing Requirements as well as BNM CG Policy. This has been concurred by the Board. The tenure of the Director is also taken into account when assessing the independence of the Independent Director. Additional criteria that are assessed to determine such individual Directors’ ability to exercise independent judgement are: • The Director is free from any business or other relationship which can materially pose any conflict of interest or interfere with the exercise of the Director’s judgement or will be disadvantageous to BHB or BHB’s interest; • The Director’s ability to provide objective challenges and constructive feedback to Management, focusing on root cause of issues and potential actions required to rectify the issues discussed; • The Director’s readiness to challenge other Directors’ assumptions, believes or viewpoints for the good of BHB; • The ability to challenge the assumptions, beliefs or viewpoints of others with the objective of questioning and challenging constructively in the interest of the Company; • Willingness to stand up and defend his/her views, beliefs and opinions for the ultimate good of the Company; and • Has a good understanding of the Company’s business activities in order to provide appropriate responses on the various strategic and technical issues put forth and deliberated by the Board. The effective participation of Independent Directors enhances accountability in the Board’s decision making process. The responsibilities of an Independent Director include but not limited to the following:- • Provide and enhance the necessary independence and objectivity to the Board; • Ensure effective checks and balances on the Board; • Mitigate any possible conflict of interest between the policy making process and the day-to-day management of the Company; • Constructively challenge and contribute to the development of business strategy and direction of the Company; and • Ensure that adequate systems and controls to safeguard the interests of the Company are in place. In line with the above and based on the NRC’s recommendation, during the period under review, the Board has agreed that the tenure of an Independent Non-Executive Director should not exceed a cumulative term of nine (9) years. This decision was made pursuant to the new Practice 4.2 of MCCG 2017. The Company now has a policy that limits an Independent Director to a maximum tenure of nine (9) years. However, an Independent Director who has served for nine (9) years, may, subject to the Shareholder’s and BNM’s approval, continue to serve the Company as an Independent Non-Executive Director. In any event, no Independent Director will continue to serve the Board for more than 12 years. 131 Overview Value Creation Accountability Financial Statements Sustainability Performance Data Shareholders Information 21 st AGM Information Management Discussion & Analysis