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Corporate Governance

Bursa Malaysia (Company) adheres to high standards of corporate governance practices under the leadership of the Board, as guided by the Malaysian Code of Corporate Governance (Code). The Company's Corporate Governance Statement is available in the Company's Annual Report.

Governance Committees

Terms of Reference

Governance Committees

  • Audit Committee
  • Nomination and Remuneration Committee
  • Risk Management Committee

Audit Committee

Governance Committees - Audit Committee
Status The Audit Committee (AC) is a committee of the Board of Directors.
Membership





Note:

1. The AC Chairman is not the Chairman of the Board

2. Any former key audit partner must have observed a cooling-off period of at least 2 years before one is eligible for appointment as AC member

Classification
  1. Independent Non-Executive Director (Chairman of the AC)
  2. Independent Non-Executive Director
  3. Independent Non-Executive Director
  4. Independent Non-Executive Director who is a Public Interest Director

The AC shall be appointed by the Board amongst its directors and shall comprise at least three (3) members who must be non-executive directors and financially literate, the majority of whom shall be independent directors. At least one (1) member of the AC:-

  1. must be a member of the Malaysian Institute of Accountants (MIA); or
  2. if he is not a member of the MIA, he must have at least three (3) years’ working experience; and
    1. he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or
    2. he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act 1967;
  3. fulfils such other requirements as prescribed by Bursa Malaysia Securities Berhad or approved by the Securities Commission.
No alternate Director shall be appointed as a member of the AC.
Primary Purpose The AC is responsible to assist the Board of Directors in:-
  1. fulfilling its oversight responsibilities for financial reporting process, system of internal control and audit process;
  2. ensuring the adequacy of controls in the, processes and procedures undertaken in accordance with aplicable laws, rules and regulations, directives and guidelines established by the relevant regulatory bodies; and
  3. overseeing the implementation and monitoring of the Whistleblower Policy and Procedures for the Group, and ensuring effective administration thereof by the Head of Internal Audit (IA).
Responsibilities Specific responsibilities include, to:-
  • Review the Group's quarterly results and year end financial statements before submission to the Board, focusing particularly on:
    • Changes in or implementation of major accounting policy changes
    • Significant matters highlighted including financial reporting issues, significant judgements made by management, significant and unusual events or transactions, and how these matters are addressed
    • Significant adjustments arising from the audit
    • Compliance with accounting standards and other legal requirements
    • The going concern assumption
  • Review the annual performance assessment, including the suitability, objectivity and independence of the external auditors in accordance with the Auditor Independence Policy, which takes into consideration the following:-
    • The competence, audit quality and resource capacity of external auditors in relation to audit;
    • Written assurance from the external auditors confirming that they are and have been independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements, including the By-laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants
  • Recommend appointment, re-appointment or removal of external auditor, and their audit fees

  • Review with the external auditors on the following and report the same to the Board:-
    • Audit plan, which comprises audit and non-audit services
    • Nature, extent and scope of non-audit services, i.e. recurring and non-recurring to ensure that they are not likely to create conflicts of interest, so as to maintain objectivity and independence of external auditors
    • Audit report
    • Evaluations of the system of internal controls
    • Audit approach, including coordination of audit efforts with internal auditors, and assistance given by the employees to the external auditors
    • External auditors’ management letter and management’s response thereto/li>
    • Any significant audit findings, reservations, difficulties encountered or material weaknesses reported by the external auditors
  • Review with the internal auditors on the following and report the same to the Board:-
    • Effectiveness of the Group’s internal control systems, which includes amongst others, financial, operational, compliance and information technology security and control
    • Adequacy of resources for internal control and dealing with problems encountered during the audit process
    • Adequacy of the scope of work, competency, experience and resources of the IA function and that it has the necessary authority to carry out its role and responsibilities
    • The IA plan, processes, the results of the IA assessments, investigation undertaken and whether or not appropriate action is taken on the recommendations
    • Conformance with The Institute of Internal Auditors' Definition of Internal Auditing, Code of Ethics and the International Standards for Professional Practice of Internal Auditing
  • Review and approve the IA Scorecard and key performance indicators
  • Review the appraisal or assessment of the performance of the IA function and performance of the Head of IA, who is appointed to be responsible for the regular review and/or appraisal of the effectiveness of the risk management, internal control and governance processes within the Group, and submit the outcome of performance assessment of the Head of IA to the Nomination and Remuneration Committee for determination of reward allocation
  • Review the following and report the same to the Board:-
    • The Annual Statement on Internal Control and Risk Management to be published in the Annual Report
    • The findings of any examination, assessment or audit by regulators
    • Any related party transactions and conflict of interest situations that may arise including any transaction, procedure or course of conduct that raises question of management integrity
    • Any letter of resignation from the external auditors or suggestions for their dismissal
    • Whether there is reason (supported by grounds) to believe that the external auditor is not suitable for re-appointment
  • Verify the allocation of options pursuant to the Employees’ Share Option Scheme (ESOS) or the allocation of shares pursuant to any incentive plan for employees of the Group at the end of each financial year as being in compliance with the criteria which is disclosed to the employees
  • Assess processes and procedures to ensure compliance with all laws, rules and regulations, directives and guidelines established by the relevant regulatory bodies
  • Determine the remit of and decide on the budget for the internal audit function which reports directly to the AC, to ensure that the IA function is effective and is able to function independently. The IA personnel:-
    • should be independent of the activities they audit and free from any relationship or conflicts of interest which could impair their objectivity and independence;
    • should perform audit with impartiality, proficiency and due professional care
  • Exercise its powers and carry out its responsibilities as may be required from time to time under the Whistleblower Policy and Procedures for the Group
  • Report to the Board of Directors any suspected frauds or irregularities, serious internal control deficiencies or suspected infringement of laws, rules and regulations which come to its attention and are of sufficient importance to warrant the attention of the Board
  • Carry out any other function that may be mutually agreed upon by the AC and the Board
Authority The AC shall have the authority to :-
  • Review and approve the appointment, renewal of appointment, replacement or removal of the Head of IA who reports directly to the AC
  • Convene meeting with the external auditors, the internal auditors or both excluding the attendance of other directors and employees of the Group, whenever deemed necessary and such meetings with the external auditors shall be held at least twice a year
  • Obtain external professional advice or other advice and invite persons with relevant experience to attend its meetings, if necessary
  • Investigate any matter within its terms of reference, have the resources which it needs to do so, full and unrestricted access to information pertaining to the Group and the Management, and all employees of the Group are required to comply with requests made by the AC
  • Have direct communication channels with the external auditors and internal auditors, and also to engage the senior management on a continuous basis, such as the chairman, the CEO and the chief financial officer in order to be kept informed of matters affecting the Group
  • Appoint an independent party to conduct or to assist in conducting any investigation, upon the terms of appointment to be approved by the AC
  • Authorise the AC Chairman for the time being to carry out the AC’s responsibilities as required under the Whistleblower Policy and Procedures for the Group

  • Recommend to the Board of Directors any appropriate changes to the duties of the AC
Meetings The AC shall meet four (4) times each year and at such other time(s) as it deems necessary to fulfil its responsibilities.

The Quorum for the AC shall be three (3), the majority of members present must be independent directors.

Each member of the AC is entitled to one (1) vote in deciding the matters deliberated in the meeting.

The decision that gained the majority votes shall be the decision of the AC. In the event of an equality of votes, the Chairman of the AC shall be entitled to a second or casting vote.
Communication to the Board The AC shall prepare a report each year concerning its activities in compliance with these terms of reference to be tabled to the Board and for inclusion in the Group's Annual Report.

The minutes of each AC meeting shall be tabled to the Board for notation.

The AC may from time to time submit to the Board its recommendation on matters within its purview, for the Board's decision.

Where the AC is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the AC must promptly report such matter to the Securities Commission.
Circular Resolution A resolution in writing signed by a majority of all members shall be valid and effectual as if it had been passed at a meeting of the AC. All such resolutions shall be described as "Members' Circular Resolutions" and shall be forwarded or otherwise delivered to the Company Secretary without delay and shall be recorded by the Company Secretary in the minutes book. Any such resolution may consist of several documents in the like form, each signed by one (1) or more members. The expressions "in writing" or "signed" include approval by legible confirmed transmission by facsimile, telex, cable, telegram or other forms of electronic communications.
Secretariat The following persons shall be the joint secretaries to the AC:-
  1. Company Secretary;
  2. Person(s) appointed by the AC from:
    1. IA; and/or
    2. Corporate Governance & Secretarial.
The Company Secretary shall be responsible for preparation of agenda in consultation with the Chairman, and distribution to all the members the papers to be deliberated at the meeting.
Appointment Process

The review of the composition of the AC shall be conducted annually. The AC members shall be appointed by the Board of Directors for a term of one (1) year, and the AC members may be eligible for re-appointment.

The Board of Directors may revoke the appointment of a member and/or vary the term of appointment of a member at any time as it deems fit.

Nomination and Remuneration Committee

Governance Committees - Nomination and Remuneration Committee
Status The Nomination and Remuneration Committee (NRC) is a committee of the Board of Directors of Bursa Malaysia Berhad (Bursa).
Membership

Note:

* The NRC may be chaired by either an Independent Director or Senior Independent Director, with reference to Practice 4.7 of the Malaysian Code on Corporate Governance

Classification
  1. Senior Independent Non-Executive Director* (Chairman of the NRC)
  2. Independent Non-Executive Director who is a Public Interest Director
  3. Independent Non-Executive Director
  4. Independent Non-Executive Director
Primary Purpose The NRC is responsible for recommending to the Board for approval of the following appointments:-
  1. Members of the Board other than Public Interest Directors;
  2. Members of the Board Committees;
  3. Senior Independent Non-Executive Director;
  4. Chief Executive Officer (CEO); and
  5. Deputy CEO.

The NRC will review and recommend to the Board the remuneration packages for the Non-Executive Directors, Board Committees members, CEO and Deputy CEO.

The NRC is responsible for reviewing and approving the appointment of the Group's key management personnel as may be determined by the NRC from time to time.

The NRC is also responsible for recommending to the Board for approval of the appointment of Company Secretaries of Bursa, and for determining the remuneration package(s) of the said Company Secretaries.

With respect to the Share Grant Plan (SGP), the NRC shall assist the Board to ensure that the SGP is fairly and properly administered and implemented in accordance with the SGP By-Laws.
Responsibilities Specific responsibilities in relation to nomination matters include, to:-
  • Formulate the nomination, selection and succession policies for the members of the Board, Board Committees, Senior Independent Non-Executive Directors, CEO, Deputy CEO, Company Secretaries of Bursa and the Group's key management personnel as may be determined by the NRC from time to time
  • Make recommendations to the Board on new candidates for election/appointment, and re-election/re-appointment of the Director to the Board
  • Make recommendations to the Board for appointments to fill casual vacancies
  • Make recommendations to the Board on the extension of the term of appointment of the Public Interest Director
  • Make recommendations to the Board on the appointment of Nominee Directors on the functional Board of the subsidiaries of Bursa
  • Conduct rigorous review to determine whether a director can continue to be independent in character and judgement, and also to take into account the need for progressive refreshing of the Board
  • Develop and recommend to the Board action plan for improvement on areas identified in the Board effectiveness evaluation, where applicable
  • Review the required mix of skills, experience and other qualities of the Board annually
  • Review and recommend to the Board the appointment of members of Board Committees established by the Board for each term
  • Ensure that orientation and education programmes are provided for new members of the Board
  • Review the directors' continuing education programmes
  • Review the human resources plan of Bursa, including succession management framework and activities, human resource initiatives as well as annual manpower budget
  • Recommend the engagement of external professional advisors to assist and/or advise the NRC, on selection and succession policy matters, where necessary
  • Establish a set of quantitative and qualitative performance criteria to evaluate the performance of each member of the Board, the CEO, the Deputy CEO, Company Secretaries of Bursa and the Group's key management personnel as may be determined by the NRC from time to time
  • Review the Corporate Balanced Scorecard and key performance indicators (KPIs) to drive organisational performance
  • Review the application of corporate KPIs to the scorecards of the respective Strategic Business Units/Support Functional Units, to ensure alignment towards corporate objectives, including the weights distribution and specific performance criteria, which may be applicable to the divisional scorecards of Group Internal Audit and Regulation, prior to its recommendation for approval by the Audit Committee, and Regulation and Conflicts Committee respectively
  • Review the performance of the members of the Board, the CEO and the Deputy CEO
  • Review the performance of the Group's key management personnel as may be determined by the NRC for approving the renewal of their service contracts, which involve their appointment, replacement or removal
  • Review and approve the performance of the Director of Regulation (based on recommendation by Regulatory and Conflicts Committee), Head of Internal Audit (based on recommendation by Audit Committee), Company Secretaries of Bursa and the Group’s key management personnel as may be determined by the NRC from time to time
Specific responsibilities in relation to remuneration matters include, to:-
  • Formulate or review the Group remuneration policies and remuneration for the members of the Board, Board Committees, Nominee Directors on the functional Board of the subsidiaries of Bursa, the CEO, and Deputy CEO, and recommend to the Board for approval
  • Review and approve the remuneration packages of the Company Secretaries of Bursa and the Group's key management personnel as may be determined by the NRC from time to time
  • Review and determine the remuneration package of the Head of Internal Audit to ensure that the compensation offered is appropriate with the responsibilities, in line with market practice and the Group’s compensation policy
  • Approve the utilization of the provision for annual salary increment, performance bonus, and long term incentives (including share grant and bonus) in respect of each financial year
  • Review the Group's compensation policy and ensure alignment of compensation to corporate performance, and compensation offered in line with market practice
  • Recommend the engagement of external professional advisors to assist and/or advise the NRC, on remuneration matters, where necessary
  • Establish a trust to be administered by the Trustee for the purpose of subscribing for new Bursa shares and transferring them to selected employee(s) and/or selected executive(s), as and when the NRC may in its discretion deem fit, and direct the administration of the SGP in accordance with the SGP By-Laws
  • Consider and determine the selection of eligible employee(s) and/or eligible executive(s) based on the conditions of eligibility as stipulated in By-Law 4 of the SGP By-Laws
  • Consider and determine the overall share grant allocation, including the number of shares to be granted to a selected employee and/or selected executive and vested in him/her subject to the provisions of the SGP By-Laws
  • Consider and determine the allocation framework under the SGP, as well as the performance targets based on performance measures i.e. performance qualifier or key performance indicators to be achieved for the Award(s) under the SGP
  • Make an offer to selected employee(s) and/or selected executive(s) of Bursa Group, in the form and manner as may be prescribed by the NRC in accordance with the SGP By-Laws
  • Recommend to the Board for approval, where it deems necessary, any amendment, modification, addition, or deletion of the SGP By-Laws
  • Enter into any transactions, agreements, deeds, documents or arrangement, and make rules, regulations or impose terms and conditions or delegate part of its power relating to the administration of the SGP as the NRC may in its discretion deem fit, necessary and/or expedient subject to the provisions of the SGP By-Laws for the time being in force
  • Take all other actions within the purview of the NRC pursuant to the SGP By-Laws, for the necessary and effective implementation and administration of the SGP
Authority The NRC shall have the authority to make decisions on matters which fall within the purpose and responsibilities of NRC.
Meetings The NRC shall meet four (4) times each year and at such other time(s) as it deems necessary to fulfil its responsibilities.

The Quorum for the NRC shall be three (3).

Each member of the NRC is entitled to one (1) vote in deciding the matters deliberated in the meeting. The decision that gained the majority votes shall be the decision of the NRC. In the event of an equality of votes, the Chairman of the NRC shall be entitled to a second or casting vote.
Communication to the Board The minutes of each NRC meeting shall be tabled to the Board for notation.

The NRC may from time to time submit to the Board its recommendation on matters within its purview, for the Board's decision.

The NRC shall also prepare a report on the effectiveness of the Board as a whole and the individual performance of each Director.
Circular Resolution A resolution in writing signed by a majority of all members shall be valid and effectual as if it had been passed at a meeting of the NRC. All such resolutions shall be described as "Members' Circular Resolutions" and shall be forwarded or otherwise delivered to the Company Secretary without delay and shall be recorded by the Company Secretary in the minutes book. Any such resolution may consist of several documents in the like form, each signed by one (1) or more members. The expressions "in writing" or "signed" include approval by legible confirmed transmission by facsimile, telex, cable, telegram or other forms of electronic communications.

The NRC shall also prepare a report on the effectiveness of the Board as a whole and the individual performance of each Director.

Secretariat The Company Secretary shall be the secretary of the NRC.

The Company Secretary shall be responsible for preparation of agenda in consultation with the Chairman, and distribution to all the members the papers to be deliberated at the meeting.

Appointment Process

The review of the composition of NRC shall be conducted once in every two (2) years. The NRC members shall be appointed by the Board of Directors for ta term two (2) years or such other period as may be specified by the boad of Directors from time to time, and the NRC members may be eligible for re-appointment.

The Board of Directors may revoke the appointment of a member and/or vary the term of appointment of a member at any time as it deems fit.

Risk Management Committee

Governance Committees - Risk Management Committee
Status The Risk Management Committee (RMC) is a committee of the Board of Directors, established pursuant to Section 22 of the Capital Markets and Services Act 2007.
Membership Classification
  1. Independent Non-Executive Director (Chairman of the RMC)
  2. Independent Non-Executive Director who is a Public Interest Director
  3. Independent Non-Executive Director
  4. Independent Non-Executive Director
Primary Purpose

The RMC is responsible for overseeing the risk management matters relating to the activities of the exchange holding company and its subsidiaries (the Group). It assists the Board to fulfil its responsibilities with regard to risk governance and risk management in order to manage the overall risk exposure of the Group.

The RMC is also responsible for overseeing the compliance and business continuity functions of the Group.

Responsibilities Specific responsibilities include, to:-

Enterprise Risk Management

  • Oversee the risk management matters of the Group, which include identifying, managing, monitoring, treating and mitigating significant risks across the Group
  • Review and recommend the principles, frameworks and policies for managing risks within the Group, for consideration and approval by the Board
  • Review and approve the procedures and guidelines for managing risks within the Group
  • Review, monitor and assess the risk appetite and risk tolerance for the Group
  • Review and recommend the annual Corporate Risk Profile which specifies key enterprise risks, for approval by the Board
  • Review and recommend the statement on risk management which form part of the Statement on Internal Control, for approval by the Board
  • Review and deliberate the reports on significant risk findings and recommendations
  • Review, monitor and assess the effectiveness of the Group’s implementation of risk treatment/mitigation action plan(s) for the management and control of the key risks, including cyber risk and resilience
  • Review and assess the impact of cyber risk when undertaking any new activities, including but not limited to any investment decision, merger and acquisition, adoption of new technology and outsourcing arrangements
  • Review and keep updated of any new or emerging trends of threats, including cyber threats, so as to ensure that the Management continues to promote risk awareness at all levels within the Group
  • Review new product and ensure the appropriate and relevant risks have been adequately addressed before submission to the relevant authority for seeking approval-in-principle on any proposed new product launch
  • Review if necessary together with other Committees, the Management, Internal Audit and external auditors, any significant risks that could affect the Group and assess the steps that the Management has taken to manage such risks
  • Review the adequacy of resources allocated for effective management of risk within the Group
  • Benchmark risk management practices of the Group against international recognised standards

Compliance and Business Continuity Management

  • Review and deliberate reports on non-compliance findings, business continuity testing results and recommendations
  • Review the framework, the plan and the scope as well as the effectiveness of the compliance and business continuity functions
  • Monitor the overall compliance to the internal policies, statutory and regulatory requirements as well as guidelines for the Group
  • Benchmark compliance and business continuity management practices of the Group against international recognised standards
Authority
  • The RMC shall have the authority to make decision on matters which fall within the purpose and responsibilities of the RMC.
  • The RMC shall also have the authority to seek information and have unrestricted access to information pertaining to the Group and the Management, to fulfill its primary purpose and responsibilities
  • The RMC shall make recommendations to the Board in respect of risk related matters which warrants the attention of the Board.
Meetings The RMC shall meet four (4) times each year and at such other time(s) as it deems necessary to fulfil its responsibilities.

The Quorum for the RMC shall be three (3).

Each member of the RMC is entitled to one (1) vote in deciding the matters deliberated in the meeting.

The decision that gained the majority votes shall be the decision of the RMC. In the event of an equality of votes, the Chairman of the RMC shall be entitled to a second or casting vote.
Communication to the Board The minutes of each RMC meeting shall be tabled to the Board for notation.

The RMC shall from time to time provide to the Board with status updates in respect of risk related matters, which warrants the attention of the Board

The RMC shall report to the Board on key risk issues or decision made within its purview, for the Board's notation

Circular Resolution A resolution in writing signed by a majority of all members shall be valid and effectual as if it had been passed at a meeting of the RMC. All such resolutions shall be described as "Members' Circular Resolutions" and shall be forwarded or otherwise delivered to the Company Secretary without delay and shall be recorded by the Company Secretary in the minutes book. Any such resolution may consist of several documents in the like form, each signed by one (1) or more members. The expressions "in writing" or "signed" include approval by legible confirmed transmission by facsimile, telex, cable, telegram or other forms of electronic communications.
Secretariat The following persons shall be the joint secretaries to the RMC:-
  1. Company Secretary; and
  2. Person(s) appointed by the RMC from:
    1. Corporate Secretarial & Compliance; and/or
    2. Risk & Compliance.
The Company Secretary shall be responsible for preparation of agenda in consultation with the Chairman, and distribution to all the members the papers to be deliberated at the meeting.
Appointment Process

The review of the composition of the RMC shall be conducted once in every two (2) years. The RMC members shall be appointed by the Board of Directors for a term of two (2) years or such other period as may be specified by the Board of Directors from time to time, and the RMC members may be eligible for re-appointment.

The Board of Directors may revoke the appointment of a member and/or vary the term of appointment of a member at any time as it deems fit.