Page 66 - HRC_Annual_Report_2023

64 About HRC Value Creation Management Discussion Leadership
& Analysis

CORPORATE GOVERNANCE OVERVIEW STATEMENT

The Sustainability Working Group comprises of representatives II. BOARD COMPOSITION
from each department, such as Financial & Management As at 31 December 2023, the Board consists of six (6) directors,
st
Accounting, Government Relations, Contracts & Procurement, comprising two (2) Non-Independent Non-Executive Directors
Commercial, Economics & Scheduling, Operations, Corporate and four (4) Independent Non-Executive Directors (INEDs),
Affairs, Engineering, Quality, Health, Safety, Security & to ensure balance of power and authority within the Board.
Environment (QHSSE) and Technology to improve sustainability
performance and monitor sustainability management and HRC’s Board composition, consists of 66.66% INEDs,
performance. complies with the MMLR and adopts the Practice of the MCCG,
wherein the INEDs constitute more than half of the Board,
Risks arising from sustainability issues, such as emissions and and surpassing the minimum requirement of 1/3 independent
waste management, QHSSE, product quality, fraud, bribery, directors.
and breach of code of conduct, succession planning and
talent retention, and their mitigative actions, are identified and To uphold corporate governance standards, Paragraph 3.1 of
tracked in a risk register, which will be updated to the BRMC the Company’s Board Charter stipulates that at any given time,
and the Board quarterly. the majority of Board members shall be INEDs to ensure a
balance of power and authority within the Board.
Opportunities for sustainability improvement to enhance the
Company’s environmental and social responsibility, employee In FY2023, the BNRC reviewed the current Board composition
health improvement programmes and energy optimisation, of HRC and recommended the new appointment of
are captured in opportunities register. Both risk and opportunities Ms Li, XiaoXia (Ms Li) as the Independent Non-Executive Director
registers are monitored by the Risk & Integrity Department, of HRC for the Board’s consideration. The new appointment
tracked quarterly and presented to the BRMC at its meetings. has taken into account the criteria set out in the TOR of the
BNRC, the Board Diversity Policy, and the Directors’ Fit and
The performance evaluation of the Board and Senior Proper Policy, requiring Ms Li to complete a Fit and Proper
Management takes into consideration the Company’s scorecard Declaration Form for evaluation by the BNRC and the Board.
and results, including material sustainability risks and
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opportunities in the areas of HSSE and compliance, operational On 8 December 2023, upon recommendation by the BNRC,
excellence, financial performance and stakeholder value. the Board reviewed and approved the appointment of Ms Li
as the Independent Non-Executive Director of HRC with
In the Board Evaluation Assessment for the financial year 2023 immediate effect, after assessing her character, integrity,
(BEA FY2023), the Board was satisfied that the Company experience, competence, time commitment, and independence
had carried out its duties satisfactorily in regard of addressing criteria as set out in MMLR.
material sustainability risks and opportunities. The Board agreed
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that sustainability factors have been taken into consideration On 8 December 2023, the Company announced the
when exercising their duties, including the development and resignation of Puan Fauziah Hisham who had served as the
implementation of strategies, business plans, major plans of Independent Non-Executive Director of HRC for 6 years and
action and risk management of the Company. The Board also 4 months, effective immediately on the same date. Consequently,
agreed that the sustainability matters for the year are adequately Ms Li has been appointed as Independent Non-Executive
reported in the Board materials and discussed at Board or Director of HRC effective from 8 December 2023.
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Board Committee meetings.
None of the Company’s Independent Non-Executive
The Board was of the view that ESG-related training is needed Directors have served beyond nine (9) years on the Board.
for the Board and Senior Management as it is a relatively Paragraph 3.4 of the Company’s Board Charter specifies that
new emerging industrial agenda to the Company. The Board the tenure of an Independent Non-Executive Director should
recognised the need for long-term plans and strategies for not exceed a cumulative term limit of nine (9) years.
refinery industry in light of ESG requirements. The Company had The BNRC had on 22 February 2024, reviewed the results of
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therefore implemented an Operational Excellence Framework, the annual BEA 2023 to assess the current Board composition
of which ESG is one of its focus areas.
and to determine the effectiveness of the Board,
The Company’s sustainability governance, targets, performance Board Committees, and each individual Director. The results
and initiatives are set out in the annual Sustainability Report of BEA FY2023 indicate that the BNRC and the Board are
and is publicly available to all internal and external stakeholders satisfied that the current composition of the Board provides
on the Company’s website at www.hrc.com.my. The website an appropriate size, diversity, mix of skills and qualifications,
also sets out the Company’s practices towards climate change, knowledge and experience to discharge their duties effectively.
pollution and resources management, and water consumption
and management.