Nomination and Remuneration Committee – Terms of Reference
The Nomination and Remuneration Committee (“Committee”) shall be appointed by the Board of Directors (“Board”) of Oxford Innotech Berhad (“Company”) amongst the Directors of the Company, subject to the following requirements:-
(1) the Committee must be composed of not fewer than three (3) members;
(2) all the Committee members must be non-executive directors with a majority of them being independent directors; and
(3) The Chairman of the Committee shall be appointed by the Board, whom shall be an Independent Non-Executive Director and shall not be the Chairman of the Board.
No alternate director of the Board members shall be appointed as a member of the Committee.
In the event of any vacancy in the Committee, the Board shall fill the vacancy within three (3) months of such vacancy.
The terms of office and performance of the Committee and each of its members must be reviewed by the Board annually to determine whether the Committee and its members have carried out their duties effectively in accordance with their terms of reference herein.
Frequency
Meetings of the Committee shall be held not less than once a year, with additional meetings being convened as and when necessary at the discretion of the Chairman of the Committee.
For any matter requiring urgent decision, the Committee’s approval may be sought via a circular written resolutions to be signed by a majority of the Committee members and such resolution shall be accompanied with sufficient information for an informed decision by the Committee members.
Quorum
Any two (2) members shall form a quorum for a meeting of the Committee provided that both members present are Independent Non-Executive Directors.
In the absence of the Chairman of the Committee, the members present shall elect any one of the members present as the chairman of the Committee meeting.
Any member of the Committee may participate in any meeting of the Committee via telephone conferencing, video conferencing or by means of any communication equipment/media which allows all persons participating in the meeting to hear one another. A person so participating shall be deemed to be present in person at the meeting and shall be entitled to vote or be counted in a quorum accordingly.
Secretary
The Company Secretary or in his/her absence, another person appointed by the Chairman of the Committee shall be the Secretary of the Committee. The Secretary of the Committee shall be responsible for issuing the notice of a Committee meeting containing agenda of the meeting as approved by the Chairman before circulating it together with explanatory statements and other supporting documents to the Committee members prior to each meeting. The Secretary is also responsible for keeping the minutes of meetings of the Committee, circulating them to the Committee members the Board members and any other person(s) as instructed by the Committee for following up on outstanding matters. The Secretary shall keep the minutes of meetings properly filed and shall produce the minutes of meetings for inspection when necessary.
Reporting Procedure
The minutes of each Committee meeting and any circular written resolutions approved by the Committee shall be circulated by the Secretary to the Board for information.
Attendance
Other Directors and employees, including the Head of Human Resources, may be invited by the Committee to attend any particular meeting of the Committee.
(1) The Committee is authorised by the Board to carry out its duties and responsibilities within its terms of reference. It is authorised to seek any information it requires from any employee and all employees shall be directed to cooperate on any request made by the Committee.
(2) The Committee is authorised by the Board to obtain legal advice or other independent professional advice if it deems or considers necessary.
The functions, duties and responsibilities of the Committee shall include the following:-
(a) to determine the criteria for Board membership, including qualities, experience, skills, expertise, education background, qualifications, competencies, integrity, contribution, level of commitment in terms of time and other qualities that will best qualify a candidate to serve on the Board as provided under the Company’s Directors’ Fit and Proper Policy;
(b) to review annually and recommend to the Board with regard to the structure, size, tenure, directorships, balance and composition of the Board (including the number of Independent Non-Executive Directors) and Board Committees including the required mix of skills and experience, core competencies which the Directors should bring to the Board and other qualities to function effectively and efficiently;
(c) to identify, consider, review, evaluate and recommend to the Board any new Board appointment, whether of executive or non-executive position, to fill board vacancies as and when they arise. The Committee shall recommend to the Board with regard to the candidate for directorship, based on the criteria as provided under the Company’s Directors’ Fit and Proper Policy, which include the following:
• skills, knowledge, expertise and experience;
• education background, qualifications and professionalism;
• competency;
• integrity and objectivity;
• in the case of candidates for the position of independent non-executive directors, the candidates’ ability to discharge such responsibilities/functions as expected from an independent non-executive director;
• Diversity targets in the boardroom to include diversity in gender, ethnicity and age;
• Level of commitment, resources and time that the recommended candidate can contribute to the existing Board and our Group; and
• Ability to work together with other members of the Board for the best interest of the Company.
(d) to consider and recommend to the Board the candidates for principal officer(s) and/or key senior management, taking into consideration the candidates’ skills, knowledge, expertise and experience, time commitment, character, professionalism, integrity and diversity in key senior management;
(e) to recommend to the Board the duties and responsibilities of the Directors, including membership and Chairmanship of the Board Committees;
(f) to annually review the term of office and performance of the Audit Committee and each of its members to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference;
(g) to review the annual performance assessment of the Board, the Board Committees and Directors including but not limited to the following:
• Reviewing the required mix of skills, experience, diversity and other qualities, including core competencies and effectiveness of the Board, as a whole, the Board committees and the contribution of each individual Directors annually;
• Reviewing the time required to be spent by non-executive directors and independent non-executive directors annually. Performance assessments should be undertaken to assess whether the directors are spending enough time to fulfil their duties;
• Evaluating and appraising the performance of the Chairman of our Board;
• Reviewing the independence of the independent directors annually and recommend to the Board whether any independent director who has exceeded the cumulative term of 9 years should remain as an independent non-executive director or re-designated as a non-independent non-executive director.
All assessments and evaluations carried out by the Committee in the discharge of all its functions shall be properly documented and conducted at least once a year either internally or by an independent party;
(h) to review the results of the evaluation and recommend to the Board the initiatives/improvements moving forward, to enhance the effectiveness of the Board;
(i) to ensure continuous education/ professional development of the Board members by:
• identifying suitable orientation, educational and training programmes for continuous development of Directors;
• ensuring all Directors receive appropriate continuous training programmes in order to keep abreast with developments in the industry and with changes in the relevant statutory and regulatory requirements; and
• assessing the Audit Committee members’ knowledge on financial literacy.
(j) To consider and recommend to the Board:
• candidates for re-election of retiring Directors to be approved by shareholders under the annual retirement and re-election provisions;
• whether the Independent Director(s) should remain independent or be re-designated;
• matters relating to the continuation in office of any Director at any time, including the suspension or termination of service of the Executive Director as an employee of the company or the Group subject to the provisions of the law and his/her service contract; and
• the re-appointment of any Non-Executive Director at the conclusion of his/her term of office having given due regard to his/her performance and the ability to continue to contribute to the Board in terms of knowledge, skills and experience required.
(k) to establish appropriate frameworks and plans for succession at the Board level to ensure that the Board is composed of Directors with the required skills and experience relevant to the Company’s strategic direction and objectives;
(i) to establish appropriate frameworks and plans for succession at the Key Senior Management level including the Managing Director and Executive Directors to ensure that the Key Senior Management consist of individuals with the required skills and experience relevant to the Company’s strategic direction and objectives;
(m) to ensure the performance evaluations of the Board and key senior management include a review of their performance in addressing the Group’s material sustainability risks and opportunities; and
(n) to carry out such other functions as may be delegated by the Board from time to time.
(a) to recommend and advise our Board on the remuneration and terms of conditions (and where appropriate, severance payments) of the executive directors, ensuring that remuneration is set at a competitive level for similar roles within comparable markets to recruit, attract, retain and motivate high calibre individuals and structured so as to align their interest with those of our Group and the shareholders;
(b) to establish formal and transparent procedures for developing a framework or policy on remuneration packages of individual directors, taking into consideration of the following:
(i) in the case of executive directors, the component parts of remuneration should be structured so as to link rewards to corporate and individual performance; and
(ii) in the case of non-executive directors, the level of remuneration should reflect the experience and level of responsibility undertaken by the non-executive director concerned;
(c) to monitor structures and levels of remuneration for other key senior management and make recommendations, if appropriate, to ensure consistency with our Group’s remuneration objectives;
(d) to approve any major changes to employee compensation and benefits arrangements applicable to the executive directors and key senior management;
(e) to approve incentive plans for the executive directors and key senior management, and any amendments to such plans;
(f) to establish and review the benefits in all its form for the executive directors, non-executive directors and key senior management positions of the Group;
(g) to review and approve annual salary increments and bonuses for the executive directors and key senior management of the Group;
(h) to obtain external advice, where necessary, on benefits for the executive directors, non-executive directors and key senior management of the Group;
(i) to review and recommend to our Board for approving the annual remuneration packages (guaranteed pay, short and long-term incentives and any compensation payable for loss or termination of office or appointment) of individual executive directors and key senior management;
(j) to review the directors’ fees and allowance payable to our Directors; and
(k) to carry out such other functions as may be delegated by the Board from time to time.
The final decision on the appointment of any Director to the Board shall be the responsibility of the Board after considering the recommendations made by the Committee.
The determination of the Directors’ fees and benefits-in-kind shall be a matter to be considered and approved by the Board as a whole and thereafter to be put forth to the shareholders for approval, where required. Each Director shall abstain from deliberating and participating in decision relating to his/her own remuneration package, Directors’ fees and/or benefits-in-kind.
When considering any severance payment, the Committee shall bear in mind that it must represent the public interest and avoid any inappropriate use of Company’s funds and care should be taken to avoid determining a severance package which might be perceived to be excessive.
V. REVIEW AND AMENDMENTS
The Term of Reference of the Nomination and Remuneration Committee shall be reviewed by the Committee periodically or where necessary to take into consideration the prevailing laws and regulations from time to time. Any amendments to Terms of Reference of the Nomination and Remuneration Committee shall be subject to the approval by the Board.