Corporate Governance Overview Statement

Board Responsibilities

The board charter sets out matters reserved for the Board’s decision and outlines the Board’s roles and responsibilities. The schedule of matters for the Board’s decision includes amongst others, the overall Group strategy and direction; major policies, board and board committee appointments; approval of financial statements, corporate plans and budgets, material acquisitions and disposals of assets, and major investments. The Board charter includes the Board’s responsibilities on environmental, social and governance (“ESG”) matters which are pertinent and material to the Group and its stakeholders; as well as effective stakeholder communication and engagement.

The Board has oversight of the overall performance and control of the Group, setting and reviewing the strategic direction of the Group, and monitoring the implementation by management of that strategy. Specific responsibilities are delegated to several committees. These committees operate within Board-approved terms of reference, and have authority to examine issues and report to the Board with their findings and recommendations.

The roles of the Chairman and Managing Director are separate. The non-executive Chairman’s responsibilities include overseeing the governance process, provide board leadership on policy formation and decision-making, as well as ensuring that appropriate steps are taken to provide effective communication with stakeholders. The Managing Director is responsible for overseeing the development and operations of the Group’s businesses, and implementing corporate strategies and objectives adopted by the Board.

The Board sets the minimum standards of conduct and personal behaviour to maintain a uniform set of values and ethics within the Group. An updated Group-wide code of ethics and conduct was adopted by the Board in 2018, which is embedded in the respective Group employee handbooks. This was further updated and approved by the Board in March 2024. A set of ‘Whistleblowing Policy and Procedures’ has been adopted by the respective business units throughout the Group, and is incorporated in the employee handbook. It is also available on the Company’s website: https://www.ppbgroup.com/index.php/governance-sustainability/ code-policies/whistleblowing-policy-and-procedures

Anti-bribery and corruption

The Board is committed to complying with anti-bribery and corruption laws in Malaysia and other countries in which the Group operates. The ‘Group Anti-Bribery and Corruption (“ABAC”) Policy and Procedures’ (“ABAC P&Ps”) applies to all directors and employees of PPB Group as well as business associates. The ABAC P&Ps is communicated to all parties with whom the Group has business dealings, and is accessible to the public via publication on the Group entities’ corporate websites. It may be viewed at the Company’s website:: https://www.ppbgroup.com/index.php/governance-sustainability/ code-policies/anti-bribery-and-corruption-policy-and-procedures

The ABAC P&Ps sets out PPB’s stance against bribery and corruption, managing conflicts of interest, policy on gifts, hospitality and entertainment, donations and sponsorship, handling facilitation payment requests and whistleblowing. The Board is responsible for the oversight of the ABAC/ Integrity programme, and has delegated authority and day-to-day decisions to the Group Integrity Steering Committee.

All Directors and employees attended the annual ABAC training session conducted by the Company’s Risk Management and Integrity Department during the year.

Governing Sustainability

The Board has oversight responsibility to deliver sustainable value to stakeholders through the principles, policies, objectives and strategies of the Group. In carrying out this responsibility, the Board is supported by the Sustainability Steering Committee (“SSC”) which was formed in 2017. The SSC is chaired by the Managing Director of PPB and presently comprises the Group Head of Sustainability, PPB’s department heads, as well as the chief executive and sustainability officers of the business units. The respective business units set, monitor and review ESG/sustainability targets, and report the performance/results achieved to the board through the SSC.

Our updated Group Strategic Plan (2024-2028) includes sustainability goals, strategies and plans of the various business units. The Board adopted a 5-year sustainability roadmap in 2022 for the period from 2022 to 2026, which translates the Group’s vision and strategy into targets and initiatives to be achieved within the set timelines. The roadmap and plans are under the purview of the Board and the SSC.

Further details of the Group’s sustainability-related matters are set out in the 2023 Sustainability Report which is available on the websites of Bursa Malaysia (http://www.bursamalaysia.com) and PPB (https://www.ppbgroup.com).

Board and Committee meetings

The meetings of the Board and Board Committees held in FY2023 and attendance record are set out below:

In exercising their duties, directors have access to Company information and the support of the company secretary. The company secretary also updates directors on statutory, regulatory and related governance requirements relating to the discharge of their duties and responsibilities.

Board Composition

The Board comprises a majority of independent directors; of the eight Board members in FY2023, five are independent. The remainder of the Board comprised the Chairman, a non-independent non-executive director, and the Managing Director.

The independent directors are able to carry out their duties and express their views unfettered by familiarity, or business or other relationships. They provide skills, competencies as well as broader views to enhance the Board’s effectiveness.

The Board has agreed that annual shareholders’ approval be sought to extend the tenure of any director who has served for more than nine years as an independent director. Dato’ Capt Ahmad Sufian @ Qurnain bin Abdul Rashid, Mr Soh Chin Teck and En Ahmad Riza bin Basir’s tenures as independent directors were further extended at the 54th Annual General Meeting (“AGM”) of the Company in 2023 for the respective further terms. The Nomination Committee (“NC”) and the Board were satisfied that Dato’ Sufian, Mr Soh and En Riza are able to exercise independent judgment and act in the best interests of the Company, and recommended the continuation of Dato’ Sufian, Mr Soh and En Riza’s tenures as independent directors beyond nine years for shareholders’ approval at the 54th AGM.

The Board strives to achieve a balance and mix of skills, experience and perspectives amongst its directors, to collectively bring a range of experience, business, financial and technical expertise for effective oversight of the Group’s businesses, and fulfil the Board’s duties and responsibilities.

Annual re-election of directors

In accordance with the Company’s Constitution, one third of the directors retire by rotation at the AGM every year, and are subject to re-election by members. No director shall serve for more than three years from his/her last election.

The NC also reviews annually the training undertaken by Directors and recommends topics which are relevant or of interest to the Board to keep abreast with business and regulatory developments. The Company organised several in-house training sessions in 2023 which directors attended, and the topics included the following:

• The annual integrity training pursuant to the group’s anti-bribery and corruption framework, which focused on various aspects of integrity such as ethics, honesty, trustworthiness, etc.
• IT security awareness training aimed to better recognise and understand organisational and personal cyber-threats, protect information assets, defence recommendations etc.
• An overview of the regulatory framework on conflict-ofinterest issues; and directors’ duties and responsibilities relating thereto.

Directors are also progressively attending Bursa Malaysia’s mandatory programme on sustainability. The programme came into effect in August 2023 and directors have 24 months (ie until August 2025) to complete the programme. To-date, seven directors have attended the programme.

In addition, the following Directors attended other training sessions during the year, and the topics included:

The criteria for evaluation of candidates for appointment as directors (and senior management positions) include their qualification, occupation, professional and business experience, and is subject to the Company/Group’s requirements and operating environment. Prospective candidates are not discriminated based on gender, age, cultural background etc.

The Group recognises the importance of identifying and developing potential leaders and managers to fill key positions (whether on the board or senior management) in the Company and Group, from both internal and external sources. This is an on-going process based on the Group’s immediate and longer-term needs in terms of skills, expertise, knowledge and experience.

Board evaluation

Candidates for board appointments are reviewed by the NC before recommendation to the Board. The NC is chaired by Encik Ahmad Riza bin Basir, an independent director. During the year, the NC reviewed and recommended the appointment of Ms Yip Jian Lee as an Independent Director. The NC assessed the proposed candidate’s character, experience, integrity, competence and time commitment to discharge her role effectively as a director.

The NC reviews annually the Board size and composition, gender diversity, as well as the mix of Directors necessary for the successful direction of the Company and Group’s businesses. The NC also conducted an assessment of the Board and independent directors for 2023 which covered their experience and expertise/knowledge in the following areas:

• Business knowledge
• Accounting and financials
• Corporate governance, risk management and internal controls
• Legal and regulatory
• Human capital
• Information technology knowledge
• ESG/sustainability matters

The assessment included a review of the directorships of each board member, and their performance and contribution to the Board and respective Board Committees during the year. The NC also assessed the performance of the Audit and Risk Committee for FY2023. Based on the NC’s review and recommendation, the Board is satisfied with the number and composition of its members, and is of the view that the Board and the Board Committees have discharged their respective duties and responsibilities effectively.

Gender diversity

There is presently no formal gender diversity policy. The Board is of the opinion that it is important to recruit and retain the best available talent, taking into account the mix of skills, experience, knowledge and independence, and based on the Group’s needs and operating environment. Nonetheless, the Board continues to review board gender diversity, and it will continue to be one of the factors to be considered in evaluating prospective candidates when a board vacancy arises.

Remuneration

The Board reviews the overall remuneration of executive and non-executive directors at intervals to attract and retain directors with the relevant experience and expertise.

The Managing Director’s remuneration is determined after taking into account his duties and responsibilities as Managing Director of PPB, his roles in various capacities in the main business units, and the Group’s performance for the year. For non-executive directors, the remuneration reflects their roles and responsibilities, and the recommendation thereof is a matter for the Board as a whole subject to shareholders’ approval.

The individual directors’ remuneration paid/payable for FY2023 on a Group and Company basis are set out below:

The remuneration of the top five senior management of the PPB Group (excluding those who are also Directors of PPB) paid/payable for FY2023 on an aggregated basis in RM50,000 bands is as follows:

The Group senior management remuneration is commensurate with their duties and responsibilities, their work performance, and the performance of the respective business entity. The Board is of the opinion that the disclosure of the senior management’s names and remuneration components would not be in the best interest of the Group due to confidentiality, business and personal security concerns. The above disclosure is deemed sufficient to enable stakeholders to assess senior management remuneration vis-a-vis the Group’s performance.

Audit Committee

The Audit and Risk Committee (“A&RC”) comprises entirely of independent directors; the A&RC Chairman is also separate from the Chairman of the Board.

The principal functions of the A&RC include the following:

• Ensure that the financial statements comply with applicable financial reporting standards, and assess the suitability and independence of external auditors.
• Assess the adequacy and effectiveness of the Group’s enterprise-wide risk management and internal control framework.

The members of the A&RC possess a mix of skills, knowledge and experience to enable them to discharge their duties and responsibilities pursuant to the A&RC’s terms of reference, which are available on the Company’s website. An annual self and peer evaluation of the A&RC is carried out and reviewed by the NC. The Audit and Risk Committee Report on pages 59 to 61 of this annual report provides more details on the A&RC’s functions during the year.

Risk management and internal control framework

Responsibility for ensuring a sound internal control system and reviewing the effectiveness of the system lies with the Board. The Group’s system of risk management and internal control is designed to manage, rather than eliminate, the risk of failure to achieve the Company’s corporate objectives and safeguard the Group’s assets. It therefore provides reasonable but not absolute assurance against material misstatement, fraud or loss.

A risk management and internal control framework has been established which covers the Group’s risk assessment process and internal controls, with oversight and reporting on the effectiveness of this function. There were no significant risk management and internal control failings or weaknesses which resulted in material losses or contingencies during the financial year.

The Statement on Risk Management and Internal Control set out on pages 57 and 58 of this annual report provides a more detailed description of the state of risk management and internal controls.

Communication with stakeholders

PPB’s Corporate Disclosure Policy (“CDP”) sets out the disclosure policies and procedures, and provides a framework to communicate effectively with stakeholders and the public generally. The policy may be viewed at the Company’s website: https://www.ppbgroup.com/index.php/governance-sustainability/ code-policies/corporate-disclosure-policy

The Company seeks to provide stakeholders with timely, accurate, clear and equal access to material information on the Company’s performance and operations. The principal sources of information disseminated by the Company during the year include the annual report, quarterly investor updates, news releases and company website.

PPB’s investor relations programme is directed at both individual and institutional investors, with the objective to maintain ongoing awareness of the Company’s performance amongst shareholders, media and the investing community. This includes twice-yearly analyst briefings after the release of the half-yearly and final results together with media conferences. The Company makes every attempt to meet requests for meetings or information from the investing community.

PPB’s 2023 Sustainability Report is guided by the Bursa Securities Malaysia Main Market Listing Requirements, Sustainability Reporting Guide (3rd Edition) and Illustrative Sustainability Reporting Guide. PPB has referenced the Global Reporting Initiative (“GRI”) Standards since 2016 and transitioned to reporting against the new GRI Standards 2021. The Company continues to support the United Nations Sustainable Development Goals (“SDGs”), and has aligned our sustainability priorities with the relevant SDGs. We have also included climate change-related disclosures as per the Task Force on Climate-related Financial Disclosures (“TCFD”) framework.

Conduct of general meetings

The 54th Annual General Meeting (“AGM”) held on 17 May 2023 was convened as a fully physical meeting. Notwithstanding this, shareholders were able to submit questions and their proxy votes prior to the meeting.

The notice of the 54th AGM was sent to members 28 days before the meeting together with the annual report. The AGM notice sets out the resolutions to be tabled and includes explanatory notes and other relevant information on the matters to be discussed and decided at the AGM. Shareholders were able to exercise their votes either in person, or appoint a representative or proxy to attend and vote on their behalf. Voting was by poll, conducted electronically and verified by an independent scrutineer.

It is the Company’s practice that all Board members, including the respective chairs of the various committees attend AGMs and are available to deal with any questions on matters under their purview. At the meetings, shareholders can express their views or raise questions relating to the Group’s financial performance and business operations. Questions from shareholders relating to the Company’s financial and business operations were dealt with by the Chairman, the Managing Director and Group Chief Financial Officer of the Company.

The minutes of the 54th AGM were also uploaded to PPB’s website and can be read via the link below: https://www.ppbgroup.com/images/pages/investor-relations/annual_general_meeting/53rd_agm/53rd_AGM_minutes.pdf

Focus Areas on Corporate Governance

The Group Strategic Plan was reviewed and adopted during the year, which covers the various business units, and takes into consideration inter alia, new trends and developments, and enhanced ESG considerations. The continuing focus in 2024 will be to enhance directors’ and senior management’s awareness, knowledge and application of ESG considerations in the Group’s business operations and activities.

This statement was approved by the Board on 21 March 2024.