SOLUTION GROUP BERHAD (“SOLUTN”)

 

Nomination and Remuneration Committee

Terms of Reference

1.                 OBJECTIVE

                                                                                           

 The Nomination and Remuneration Committee (“NRC”) of Solution Group Berhad (“SOLUTN”) is established with the following primary objectives:

 

Nomination Function

 

To assist the Board of Directors  (“the Board”) in reviewing on an annual basis the appropriate size and balance of the Board, including appropriateness of non-executive participation.

 

To review the required mix of skills, experience, knowledge and responsibilities of the Board.

 

To recommend members for appointments to the Board and Board Committees and to ensure appropriate assessment of the Directors on an ongoing basis.

 

To ensure there is sufficient succession planning and human capital development focus in the SOLUTN group of companies (“Group”).

 

 

Remuneration Function

 

To recommend to the Board the remuneration framework for the Non- Executive Directors including the Non-Executive Chairman.

 

To set the policy and remuneration framework, and to make recommendations to the Board on all elements of remuneration, terms of employment, reward structure and fringe benefits for Executive Directors and key positions.

 

To set the policy and remuneration framework for employees of the Group.

 

 

 

2.                 COMPOSITION AND APPOINTMENT

 

The NRC members shall be appointed by the Board from amongst their number and  shall consist of not less than three (3) members, all of whom shall be Non- Executive Directors, and a majority of whom shall be Independent Directors.

 

 No alternate Director shall be appointed as a member of the NRC.

 

 The Chairman of the NRC shall be an Independent Non-Executive Director appointed by the Board.

 

 The NRC members may relinquish their membership in the NRC with prior written notice to the SOLUTN Secretary. In the event of any vacancy arising in the NRC resulting in the number of members of the NRC falling below three (3), the vacancy shall be filled as soon as possible, but not later than three (3) months from any arising vacancy.

 

 

3.                 AUTHORITY

 

 The NRC is authorised by the Board and at the expense of the Group to perform the following:

 

 Secure the resources in order to perform its duties as set out in its terms of reference.

 

 Have full and unrestricted access to Group Human Resources, including without limitation, its information, records, properties and personnel.

 

 Obtain  independent  professional  advice  and  expertise  to  perform  its duties, or obtain the assistance of Management where necessary.

 

 

4.                 FUNCTIONS AND DUTIES

 

The main functions and duties of the NRC shall include, but are not limited to the following:

 

Nomination Functions and Duties

 

 

i) Assessment of Board Composition

 

(a)  Establish a policy formalising the Group’s approach to Boardroom diversity (including diversity in gender, nationality, age, culture and socio-economic backgrounds).

(b)  Annually review and recommend to the Board the appropriate size of the Board, required mix of skills, experience and other qualities, including  core competencies which Non-Executive Directors shall bring to the Board to ensure that they are in line with SOLUTN’s and the Group’s requirements.

(c)  Consider and recommend any policy regarding the period of service of Non-Executive Directors, and the term of office of Board Committee members, including Chairmen of Board Committees.

(d)  Ensure periodic reviews of the term of office, and terms of reference of all Board Committees, assisted by the SOLUTN Secretary.

 

 

ii) Appointments

 

 

(a) Consider and recommend to the Board the selection criteria for new appointment as Directors of SOLUTN and the Group which may include:

•      Required skills, knowledge, expertise and experience;

 

•      Time commitment, character, professionalism and integrity;

 

•      Ability to work cohesively with other members of the Board;

 

•      Specialist knowledge or technical skills in line with the Group’s strategy;

 

•      Diversity in age, gender and experience/background; and

 

•      Number of directorships in companies outside the Group.

 

NRC shall also consider and recommend to the Board the composition of the Board which must comprise a majority of Independent Directors.

 

(b)  Ensure that a formal letter of appointment setting out clearly the expected time commitment, Board Committee involvement, involvement outside Board meetings and protocol for accepting new Directorships is provided to the Non-Executive Directors upon appointment to the Board.

 

(c)  Consider and recommend suitable persons for appointment as Directors of SOLUTN, its Group and members of the Board Committees.

 

(d)  Appointment of Key Management Positions:

 

•      Review and if deemed appropriate, endorse for the Board’s approval, the recommendations of the Group Managing Director (“GMD”) on the appointment, evaluation, promotion, resignation, disciplinary actions and termination of the key positions of SOLUTN and the Group. The key positions are set out in the schedule of direct reports to GMD enclosed as Appendix 1.

•      In the case of the Group Chief Operating Officer and Group Chief Financial Officer positions, the NRC shall interview the candidate(s) as part of the review process. The NRC reserves the right to interview any key position candidate recommended by the GMD.

 

 

iii) Retirement, Re-election and Re-appointment

 

(a)  Ensure that every Director, including the Executive Directors, shall be subject to retirement at least once every three (3) years. The NRC shall also ensure that Directors above the age of 70 submit themselves for re-appointment on an annual basis. A retiring Director shall be eligible for re- appointment.

(b)  Recommend to the Board, candidates for re-election or re- appointment of Directors by shareholders. In instances where an Independent Non-Executive Directors is to be retained beyond nine (9) years, the NRC shall conduct an assessment of the Independent Non-Executive Director(s) and recommend to the Board whether they shall remain Independent or be re-designated as a Non-Independent Non- Executive Director.

 

iv) Succession Planning

 

(a)  The GMD shall assist the NRC in ensuring that an appropriate succession planning framework, talent management and human capital development programme is in place for the position of the GMD and key positions, and be appraised of the progress of the programme on a regular basis, and at least once a year.

 

(b)  Oversee succession planning for the Board Chairman and Directors.

 

 

v) Annual Performance Assessment

 

(a)  Assist the Board in establishing procedures and processes towards an annual assessment of the effectiveness of the Board as a whole and each Board Committee (including its size and composition), as well as the contribution of each individual Director. Results of evaluation shall be documented.

(b)  Consider and recommend to the Board an annual assessment of the Independent Directors of SOLUTN.

(c)  Develop, maintain and review the criteria for evaluating Board and Board Committees’ performance.

(d)  Ensure that appropriate actions are taken based on the results of the annual assessments, to continuously enhance the Board’s overall performance.

 

 

vi) Training and Development

 

(a)  Recommend suitable orientation and training programmes to continuously train and equip new and existing Directors

 

(b)  Ensure a statement is made by the Board in the Annual Report of SOLUTN, containing a brief description on the type of training attended by Directors during the financial year.

 

 

Remuneration Functions and Duties

 

Review and recommend to the Board  a formal and  transparent remuneration policy and framework for Non-Executive Directors of SOLUTN and the Group drawing on external consultants’ advice as necessary. In doing so, the NRC should perform the following:

 

(a)  Ensure that compensation policies and packages of Senior Management are reflective of the Group’s performance as a whole, and in line with corporate objectives.

 

(b)  Ensure performance targets are in line with shareholders’ interests, and with an appropriate balance between long term and short term goals;

 

(c)  Ensure alignment of the compensation scale to corporate performance, and that compensation offered is in line with current market practices by comparable companies, time commitment, responsibilities and employment conditions elsewhere  within  the Group and in the market.

 

Review and if deemed appropriate, endorse for the Board’s approval, the annual bonus and salary increment framework for the Group, as recommended by the GMD, including the total quantum of payment.

 

Review and recommend to the Board the terms and conditions of service, remuneration, compensation and benefits package (including bonus and salary increment) of the GMD position.

 

Review and if deemed appropriate, endorse for the Board’s approval, the recommendations of the GMD on the terms and conditions of service, remuneration, compensation and benefits package (including bonus and salary increment) of the key positions.

 

Review and recommend the extension of service, and compensation and benefits packages of Managing Director (MD) in the SOLUTN Group, and other key positions, who have reached the age of retirement.

 

Disclosure and Reporting

 

Ensure that a statement on its activities in the discharge of its nomination duties for the financial year is included in the Company’s annual report.

 

 

5.                 MEETINGS

 

Frequency

 

The NRC shall meet as and when necessary and at such other time(s) as it deems necessary to fulfil its responsibilities.

 

Other members of the Board and Management may attend meetings upon the invitation of the NRC.

 

 

Notice and Agenda

 

The SOLUTN Secretary shall issue and circulate the notice of the NRC meetings confirming the venue, time and date at least five (5) working days before each meeting to the committee members and all those who are required to attend the meeting.

 

 

The agenda for each meeting  including relevant documents and information requested by the NRC shall be circulated at least five (5) working days before each meeting to the NRC members and all those who are required to attend the meeting.

 

 

The NRC meeting agendas shall be the responsibility of the Chairman with input from the NRC members, and assisted by the SOLUTN Secretary. Where necessary, the agenda shall include input from Management or other persons deemed appropriate to participate in this process.

 

Quorum

 

The quorum for a meeting of the NRC shall be two (2) members. In the absence of the Chairman, the members present shall elect a Chairman from amongst them to Chair the meeting.

 

 

Meeting Mode

 

A meeting of the NRC shall normally be conducted face-to-face to enable effective discussion; however, meetings may also be conducted via telephone conferencing, video conferencing or other appropriate means as determined by the NRC.

 

The NRC may from time to time and if deemed appropriate, consider and approve and/or recommend relevant matters via a Circular Resolution in writing, in lieu of formally convening a meeting. The Circular Resolution shall be as valid and effectual as if it has been passed by a meeting of the NRC duly convened. Approval of NRC obtained by a NRC Circular Resolution must be signed or approved by all NRC members.

Voting

 

All resolutions of the NRC shall be adopted by a simple majority vote, each member having one vote. In case of equality of votes, the Chairman shall have a second or casting vote.

 

A NRC member is required to abstain from deliberations and voting in respect of any matter which may give rise to an actual or perceived conflict of interest situation.

 

 

Meeting Minutes

 

The minutes of the meeting shall be action oriented, and record the deliberations and decisions of the NRC. Minutes shall include compiled Board instructions as Matters Arising for discussion at each NRC meeting to ensure proper follow through.

 

Minutes shall be distributed to NRC members and shall be approved by the Chairman of the meeting at which the proceedings are held or by the Chairman of the next succeeding meeting.

 

Copies of minutes of each meeting shall be distributed to all members of the Board.

 

The NRC, through its Chairman, shall update the Board on the activities undertaken by the NRC at each Board meeting.

 

Relevant members of Management shall be provided with the minutes and Matters Arising for follow up on key actions required.

 

 

Secretary

 

The Secretary to the NRC shall be the SOLUTN Secretary.

 

The Secretary shall organise and provide assistance at NRC meetings and have the following key responsibilities:

 

•    ensure meetings are arranged and held accordingly;

 

•    assist the Chairman in planning the NRC’s activities;

 

•    draw up meeting agendas in consultation with the NRC Chairman and maintain the minutes and draft its scheduled activities for the financial year;

 

•    ensure structured communication channels between the Board and the NRC;

 

•    ensure proceedings of meetings are recorded and the minutes circulated in a timely manner, and reviewed by the NRC before disseminating them to the Board; and

 

•    ensure NRC recommendations presented to the Board are supported by papers that explain the rationale for the NRC’s recommendations.

 

 

6.                 ANNUAL PERFORMANCE ASSESSMENT

 

 The NRC shall perform a self-assessment annually to assess its effectiveness in carrying out the duties as set out in this Terms of Reference.

 

 The Board shall review the composition, performance and effectiveness of the NRC and each of its members annually to determine the effectiveness of the NRC and each of  its members in carrying out the duties as set out in this Terms of Reference.

 

 All such assessments shall be properly documented.

 

 

7.                 REVIEW OF THE TERMS OF REFERENCE

 

    The NRC shall recommend any changes to its terms of reference in such manner as the NRC deems appropriate to the Board for approval. The terms of reference shall be assessed, reviewed and updated where necessary i.e. when there any change to the code, Listing Requirements or any other regulatory requirements. It shall also be reviewed and updated when there any change to the direction or strategies of the Group that may affect the NRC’s role.

 

 

This terms of reference has been approved by the Board on 5 January 2017.