CAHYA MATA SARAWAK ANNUAL REPORT 2016

A N N U A L R E P O R T 2 0 1 6 Section 06 Governance 57 Cahya Mata Sarawak Berhad In February 2017, the Board approved the NRC’s recommendation to carry out the Board Effectiveness Evaluation (“BEE”) annually instead of once every two (2) years. The Board carried out the BEE for the year 2016 via an in-house BEE survey questionnaire, comprising a Board and Board Committee Effectiveness Self/ Peer Assessment. The BEE was facilitated by the Group Company Secretary and there was 100% participation in the said BEE exercise. The NRC reviewed the outcome of the BEE and recommended to the Board the areas identified for continuous improvement. The Board’s effectiveness was assessed in the areas of Board composition, meeting process, administration and conduct, interaction and communication with Management, Board and stakeholders, roles and responsibilities, training and financial reporting. The Board Committees’ effectiveness was assessed in the areas of composition, process and interaction, duties, roles and responsibilities, as well as effectiveness of the Chairmen of the respective Board Committees. The self/peer assessment examines the Board and Board Committees’ dynamics and participation, competency and capability, exercise of independent judgement and objectivity, as well as skills and other qualities. In regard to the assessment for 2016, the NRC noted the results of the BEE conducted on the Board and Board Committees with an average overall rating of 4.37 out of 5 (excellent performance). This was adopted by the Board in February 2017 as recommended by the NRC. The results generally reflected the Board’s consensus that each director had performed above expectations and had met the performance criteria in the BEE. Where the areas/questions had scored below a rating of 4 (good performance), these are areas which will be the focus for the NRC for the ensuing year to ensure further discussion amongst Board members which warrant their attention and/or action. The results of the BEE form the basis of the NRC’s recommendations to the Board for the re-election and retention of Directors at the 42 nd Annual General Meeting (“AGM”). The NRC was satisfied that, presently, the Board is at an optimum size and that there is an appropriate mix of knowledge, skills, attributes and core competencies in the Board’s composition. The NRC was also satisfied that all the Board members and key officers are suitably qualified to hold their positions as Directors and/or key officers of CMS in view of their respective academic and professional qualifications, experience, industry knowledge and qualities. The Company adopts a transparent and formal procedure for the selection, nomination and appointment process of new Directors as follows: The Group Company Secretary ensures that all appointments are properly made, that all necessary information is obtained from the Directors, both for the Company’s own records and for the purposes of meeting statutoryobligations,aswell asobligations arising fromthe MMLR or other regulatory requirements. The recruitment process concludes with the Board Induction Programme and related training programme(s) to equip the Director with the required knowledge and understanding of the Group’s businesses and operations. The key activities of the NRC carried out and/or fulfilled in 2016 are summarised as follows: • Nominating Function In relation to the Board of the Company and its Group - Review of Board and Board Committees Succession Planning. - Review and recommend the re-election of Directors and retention of Independent Non- Executive Directors at the 41 st AGM. - Evaluate and recommend suitable candidates for appointment to the Boards and Board Committees of the Company and appointment to the Boards of subsidiary and/or associate companies of the Group. - Review and assess the terms of office and performance of the Group AC. - Oversee the assessment of independent directors. - Carried out a Board skills assessment matrix. - Review and recommend training for Directors. In relation to the Management - Review of Senior Management Succession Planning. - Review the organisational changes to be made at the Group and recommending to the Board. - Review of Strategic Performance Management/ KPI for Senior Management. Statement on Corporate Governance Board approves the appointment of Director NRC makes a final recommendation to Board Chairman or Executive Directors interviews/meets with potential candidates and reports back to NRC NRC identifies gaps/desired skills or competencies following an annual assessment NRC identifies and evaluates potential candidates NRC recommends to Board to invite the potential candidate for interview(s)