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Financial Reports &
Governance Other Information HENGYUAN REFINING COMPANY BERHAD l ANNUAL REPORT 2023 61

No Principal Responsibilities Explanation and updates for FY2023
iii. Overseeing the conduct of The Board oversees the Company’s business and assesses the performance of the
the Company’s business Management to determine whether the business is properly managed in accordance
with the Company’s objectives. This includes the Company’s financial management
and performance, operational excellence, control and accountability systems,
corporate governance, risk management practices, compliance with laws and
regulations (including HSSE compliance) and human capital management.
With the assistance of the various Board Committees, the Board reviews, challenges
and deliberates on proposals tabled by the Management and discusses the
Company’s performance during Board and Board Committees meetings.
These meetings are held in accordance with the frequency specified in the Board
Charter and the Terms of Reference (TOR) of the respective Board Committees,
with additional meetings to be convened where necessary.

The performance and effectiveness of the Company are assessed and measured in a
scorecard based on Key Performance Indicators (KPIs) set for the Management.

iv. Identifying principal risks and The Board understands that business decisions involve taking appropriate risks and
ensuring the implementation sets the risk appetite for the Company. To ensure appropriate internal controls and
of appropriate internal controls mitigation measures are in place, the BAC and BRMC assist the Board in assessing and
and mitigation measures anticipating potential risks to the Company and recommend appropriate actions to be
taken to mitigate the risks.
The BAC oversees the internal controls system of the Company while the BRMC
ensures that an effective risk management framework is in place. The Committees
also ensure that the Company’s internal controls and risk management framework are
periodically tested for its effectiveness and integrity.

v. Succession planning The BNRC assists the Board to oversee the nomination function to ensure that key
members of senior management have the necessary skills and experience, and that
orderly succession planning for directors and senior management is in place.
The appointments, discipline, and termination of key positions in senior management,
such as the Chief Executive Officer (CEO), Chief Financial Officer (CFO) or Financial
Controller (in the absence of CFO) and Head of Human Resource (HR) or HR Manager
(in the absence of Head of HR), are evaluated by the BNRC before recommendations
are made to the Board for approval.
The BNRC also reviews the leadership needs of the Company on a regular basis
and ensures that an appropriate succession planning framework, management &
development talent, and human capital development programme are in place for
senior management as well as employees, taking into account the skills required and
the challenges and opportunities faced by the Company. The succession plans are
discussed in the quarterly BNRC meetings.
The BNRC recommends nominations to the Board and Board Committees,
based on objective criteria, merit and with due regard to diversity of gender,
nationality, age, culture, socio-economic background, skills, experience and
independence. The Committee also reviews the annual assessment of the
effectiveness of the Board, the Board Committees and individual directors,
and evaluates the Board’s composition to ensure that the composition of the Board
and Board Committee are able to discharge their duties effectively.