61 STATEMENT ON CORPORATE GOVERNANCE THE BOARD OF DIRECTORS (“THE BOARD”) OF TH of professional standards and business performance, PLANTATIONS BERHAD (“THP” OR “THE COMPANY”) its review of the adequacy and integrity of the Group’s REMAINS COMMITTED IN ITS EFFORTS TO internal control systems, including the identi fi cati on IMPLEMENT THE PRINCIPLES AND BEST PRACTICES of principal risks and ensuring the implementati on of SET OUT IN THE MALAYSIAN CODE ON CORPORATE appropriate systems to manage those risks, and the GOVERNANCE. THE ADOPTION OF GOOD acceptance of its underlying duty to ensure that THP CORPORATE GOVERNANCE IS A FUNDAMENTAL Group meets its responsibiliti es to its shareholders. PART OF THE BOARD’S RESPONSIBILITY TO PROTECT AND ENHANCE SHAREHOLDERS’ VALUE AND THE PERFORMANCE OF THP AND ITS SUBSIDIARIES THE BOARD OF DIRECTORS (“THP GROUP”). Compositi on, Size and Eff ecti veness of the Board As one of the Government-Linked Companies (“GLCs”) in Malaysia, THP not only abides by the For the fi rst six months of 2009, the operati ons of principles and best practi ces as set out in the THP Group were steered by Dato’ Che Abdullah @ Malaysian Code on Corporate Governance (“the Rashidi bin Che Omar as the Managing Director of Code”), but also subscribes to the principles THP, a positi on he had held since 2003. introduced by the Putrajaya Committ ee on GLCs High Performance (“PCG”). PCG’s Guidelines to Enhance In July 2009, Dato’ Rashidi bin Omar had opted Board Eff ecti veness, as codifi ed in the “Green for early reti rement and the leadership baton was Book” launched on 26 April 2006, reinforced the passed to Dato’ Zainal Azwar bin Zainal Aminuddin as recommendati ons contained in the Code. the Chief Executi ve Offi cer of THP. Prior to July 2009, Dato’ Zainal Azwar bin Zainal Aminuddin had been The Board of Directors plays a key role in the the Deputy Managing Director of THP since February governance process through its review and approval 2007. of the Group’s directi on and strategy, its monitoring TH PLANTATIONS BERHAD 2009 ANNUAL REPORT 62 STATEMENT ON CORPORATE GOVERNANCE Eventhough he had reti red as the Managing Director Datuk Ismee bin Haji Ismail, who is the Group of THP, Dato’ Rashidi bin Omar had sti ll graciously Managing Director and Chief Executi ve Offi cer of remained on the THP Board as a Non-Executi ve Lembaga Tabung Haji, is the Non-Independent Non- Director in order to ensure the smooth transiti on of Executi ve Director who represents Lembaga Tabung leadership from him to Dato’ Zainal Azwar bin Zainal Haji, the majority shareholder of the Company, Aminuddin. brings with him the relevant business, fi nancial and professional backgrounds relevant to the policy In September 2009, Dato’ Rashidi bin Omar resigned formulati ons and directi on of THP Group. as a Non-Executi ve Director of THP and paved the way for Dato’ Zainal Azwar bin Zainal Aminuddin to The other seven (7) Independent Non-Executi ve be appointed as the Executi ve Director of THP. Directors do not engage in the day-to-day management of the Company and do not parti cipate With this, the Board remains nine (9) members in any business dealings and are not involved in any comprising one (1) Executi ve Director, one (1) Non- other relati onship with the Company. This ensures Independent Non-Executi ve Director and seven (7) that the Independent Non-Executi ve Directors remain Independent Non-Executi ve Directors. THP is led free of confl ict of interest situati ons which facilitate by an eff ecti ve Board of Directors where seven (7) them to carry out their roles and responsibiliti es as of the Non-Executi ve Directors fulfi ll the criteria Independent Directors eff ecti vely. of independence as defi ned in the Bursa Malaysia Main Market Listi ng Requirements (“Listi ng Although all Directors shoulder equal responsibiliti es Requirements”). for THP Group’s operati ons, the roles of these Independent Non-Executi ve Directors have proven to The Board views that the number and compositi on be parti cularly important in ensuring that all business of the current Board members is suffi cient and well- strategies proposed by the management are fully balanced for the Company, taking into considerati on discussed and examined, and taking into account the its present acti viti es and size in carrying out its duti es long-term interests, not only of shareholders, but eff ecti vely, whilst providing greater assurance that no also the employees, customers, suppliers and other individual or small group of individuals can dominate stakeholders in which the THP Group operates. the Board’s decision making. The profi le of each Board member are contained in The positi on of Chairman and Chief Executi ve Offi cer page 42 to page 51 of this Annual Report. are held by Tan Sri Datuk Dr Yusof bin Basiran and Dato’ Zainal Azwar bin Zainal Aminuddin respecti vely. The Duti es and Responsibiliti es of the Board Chairman has never held the post of Chief Executi ve Offi cer of the Company. There is a disti nct and clear The Board members, in discharging their duti es, division of responsibility between the Chairman and are constantly mindful that the interests of the the Chief Executi ve Offi cer to ensure that there is THP Group’s customers, investors and all other a balance of power and authority. The roles of the stakeholders are well safeguarded. Chairman and Chief Executi ve Offi cer are separated and clearly defi ned. The six (6) principle responsibiliti es of the Board include the following: TH PLANTATIONS BERHAD 2009 ANNUAL REPORT 63 STATEMENT ON CORPORATE GOVERNANCE a. Reviewing and adopti ng a strategic plan for the The Board’s responsibility in this aspect Company. The Board will review and approve is being closely supported by the Human the fi ve-year rolling strategic plan for THP Resource Department. Due to the importance Group. of succession planning, this subject has now become an ongoing agenda being reviewed On an ongoing basis as need arises, the at various high-level management and Board assesses whether projects, acquisiti ons operati onal meeti ngs of THP Group. and disposals as well as other strategic considerati ons being proposed at Board e. Developing and implementi ng an investor meeti ngs during the year under review are in relati ons programme or shareholder line with the objecti ves and broad outline of communicati ons policy for the Company. the adopted strategic plans. The Board has approved the Company’s b. Overseeing the conduct of the Company’s Investor Relati ons Policy (“IR Policy”) on 9 business to evaluate whether the business is August 2007. In the IR Policy, the Company being properly managed. At Board meeti ngs, has authorised selected spokepersons from all operati on matt ers are discussed and expert the senior management together with the advice are sought where necessary. Chairman and the Chief Executi ve Offi cer to communicate with fi nancial analysts, The performances of the various operati ng units shareholders and investors in relati on to of THP Group represent the major element of industry overview including press interviews, Board agenda. When and where available, investor analyst briefi ngs together with THP’s data are compared against nati onal trends and yearly and quarterly results announcements, performances of similar companies. so as to ensure that investors and shareholders are well-informed about THP Group’s aff airs THP Group uses Key Performance Indicators and developments. (KPI’s) as the primary driver and anchor to its performance management system, of which f. Reviewing the adequacy and the integrity is conti nually refi ned and enhanced to refl ect of the Company’s internal controls and the changing business circumstances. management informati on systems, including compliance with applicable laws, regulati ons, c. Identi fying principal risks and ensure the rules, directi ves and guidelines. implementati on of appropriate systems to manage these risks. The THP Group has set The Board’s functi on with regards to fulfi lling up a Risk Management Committ ee comprising this responsibility is supported and reinforced senior members of the Management team for through the various committ ees established this purpose to assist the Board. at both the Board and management levels. Aided by the Internal Audit Department, the d. Implementi ng succession planning, including acti ve functi on of these committ ees through the appointment and recruitment of senior their regular meeti ngs and discussions would management team members. provide a strong check and balance and TH PLANTATIONS BERHAD 2009 ANNUAL REPORT 64 STATEMENT ON CORPORATE GOVERNANCE reasonable assurance on the adequacy of the Board Meeti ngs and Supply of Informati on to the Company’s internal controls. Board Details on the Internal Audit functi ons are Board meeti ngs for the ensuing fi nancial year are further discussed in the Audit Committ ee scheduled in advance before the end of the current Report as menti oned on page 99 of this fi nancial year to facilitate the Directors to plan ahead Annual Report. and organise the next year’s Board meeti ngs into their respecti ve schedules. As menti oned earlier, the Company subscribes to the principles in the Green Book as the The Board received the Board Papers prior to each Policy Manual of the Board to assist the Board meeti ng. The Board papers provide informati on on in discharging its duti es eff ecti vely. Thus, THP Group’s performance and major operati onal, the Board is guided by the Green Book in the fi nancial and corporate issues.