CAHYA MATA SARAWAK ANNUAL REPORT 2016

www.cmsb .com.my Section 06 Governance Cahya Mata Sarawak Berhad 58 • Remuneration Function In relation to the Board of the Company and its Group - Renewal of contract for Group Chairman and Group MD. In relation to the Management - Evaluate the performance of the Group MD and Senior Management and recommend their performance contract payment (“PCP”) and annual salary increment. - Recommend the guidelines on PCP and annual salary increment for the Group after taking into consideration the Group’s financial performance, individual employee performance and market data. - Review and recommend the extension of fixed term contracts of employment for Senior Management. In accordance with Article 110 of the Company’s Articles of Association, all Directors appointed by the Board are subject to election by shareholders at the first AGM after their appointment. One-third (1/3) of the Directors, or if their number is not a multiple of three (3), the number nearest to one-third (1/3) with a minimum number of one (1), shall retire from office at each AGM and they may offer themselves for re-election. All Directors must submit themselves for re-election at least once in every three (3) years. The NRC is responsible to recommend the Directors who are eligible to stand for re-election based on the schedule of retirement by rotation. In assessing the suitability of candidates, the NRC takes into account the competencies, contribution, commitment, tenure and other attributes as well as the self/peer assessment based on the BEE. The NRC also assesses the Board structure and balance including independence criteria. Directors are requested to give their written consent on their intention to seek re-election at an AGM. The NRC’s recommendations are then submitted to the Board and shareholders respectively for approval. In February 2017, the Board approved the NRC’s recommendation that the Directors due to retire by rotation at the 42 nd AGM namely, Y A M Tan Sri Dato’ Seri Syed Anwar Jamalullail, Dato Sri Mahmud Abu Bekir Taib and Gen. Dato’ Seri DiRaja Tan Sri (Dr.) Mohd Zahidi B. Hj Zainuddin (Retired), be eligible to stand for re-election. This recommendation is based on the outcome of the 2016 BEE. Y A M Tan Sri Dato’ Seri Syed Anwar Jamalullail and Dato Sri Mahmud Abu Bekir Taib have expressed their intention via written consent to seek re-election at the 42 nd AGM. As Gen. Dato’ Seri DiRaja Tan Sri (Dr.) Mohd Zahidi B. Hj Zainuddin (Retired) will be reaching his twelve (12 th ) year of service by July 2017, he had informed the Board in February 2017 that he would retire at the conclusion of the 42 nd AGM and will not be offering himself for re-election. In February 2017, the NRC reviewed the composition of the three (3) Board Committees in accordance with its TOR and have recommended that the Board Committees composition to remain as status quo based on the results of the 2016 BEE. This was approved by the Board in February 2017. Board Diversity TheBoard recognises that diversity is oneof thekeydrivers to enhance board effectiveness. This includes diversity in terms of skills, background, knowledge, international/ local industry experience, culture, independence, age, ethnicity and gender among many other factors, which are all taken into consideration when seeking to appoint a new Director to the Board. The Board, via the NRC, continues to deliberate on its diversity targets in 2016 in conjunction with the Board succession planning exercise and overall assessment of the Board composition. The NRC had initiated efforts in 2015 to recruit suitable lady director(s) to join the Board and this initiative was pursued vigorously throughout 2016. The Board is mindful to improve gender diversity, however its view is that the leadership of the Board is critical and therefore even as it strives to comply with new regulations and/or principles, Board succession planning must be done properly in a smooth manner to ensure continuity and stability of the Board. Balance of Executive and Non-Executive Directors Board Age Diversity Board Ethnicity Executive Non-Executive Age 50 - 60 Foreigner Chinese Bumiputra Age 60 - 70 Statement on Corporate Governance Board Diversity as at March 2017