The purpose of this statement is to provide investors with an insight into the CG practices of
the Company in addition to compliance with paragraph 15.25 of the MMLR under the principled
leadership of the Board. This statement serves as a testament of the Board's commitment to keep
the corporate conscience alive in its continuous effort to strive for the highest standards of CG
practice in Bursa Malaysia.
The Board of Directors
Principal Responsibilities of the Board
The Board has six specific responsibilities, as described below, which
are discharged in the best interests of the Company, in pursuance of
an integrated regulatory and commercial objective:
Reviewing and adopting a strategic plan for the Company
The Board plays an active role in the strategy development and
planning process. At the end of each year, the management
presents to the Board for approval the proposed strategy for
the ensuing year. The process includes review and suggestion
by the Board, leading to approval of the annual business
plan and budget as well as the setting of corporate KPIs. The
corresponding targets are used by the Board for evaluating the
Company's actual performance.
At an offsite meeting in October 2009, the NEDs reviewed and
challenged the management in the light of current market
issues, gave their input to modify the approach in line with the
strategic objectives set for 2009-2011. In doing so, the Board
considered the proposed priorities and initiatives aimed at
developing a differentiated value proposition for Bursa Malaysia
to enhance its competitiveness and to achieve its regulatory
goals. This served as guidance in formulating and mapping the
strategies into the 2010 Business and Regulatory Plans which
were subsequently approved in November 2009.
A mid-year review of the 2010 Plans was conducted by the Board
in June 2010. The management presented the status of strategy
implementation together with key initiatives undertaken in the
first half of the year as indicated in the strategy dashboard and
the CBS. The management also reported on the year-to-date
financial performance for comparison against budget.
The Board continuously focused its deliberations on business
strategy, product development and market infrastructure for the
securities, derivatives and Islamic markets.
A similar process was adopted in November 2010 for the
development of the 2011 Business and Regulatory Plans.
The Board reviewed the sustainability, value and effectiveness
of the implementation of the strategic plan in 2010, and
discussed substantively the potential development areas for
improving Bursa Malaysia's positioning as an investment and
listing destination of choice.
Overseeing the conduct of the Company's business to
evaluate whether the business is being properly managed
The Governance Model for the Group which is supported by the
ALD was revised to reflect the flow of authority and functions of the
CEO and management, including relevant business governance
and rules committees, in accordance with the approved financial
limits as set out in the ALD to facilitate an efficient approval
process. The OC was removed from the Governance Model upon
the expiry of the ESOS on 8 March 2010.
The ALD sets out clearly the relevant matters which are
reserved for the Board's approval, as well as those matters
which the Board may delegate to the Board Committees1,
the CEO and management to ensure an optimum structure
and efficient decision-making in the organisation. The Group
management governance framework is put in place to enable
good business and regulatory governance in accordance with
the approved policies and guidelines which remain within the
Board's oversight.
The key matters reserved for the Board's approval include the
annual business plan and budget, dividend policy, business
continuity plan, new issues of securities, strategic collaboration
which involves business restructuring, acquisitions and
disposals of companies within the Group, as well as disposals
of significant fixed assets.
Board Committees are entrusted with specific responsibilities
to oversee the affairs of the Company, with authority to act on
behalf of the Board in accordance with their respective TOR.
At each Board meeting, the minutes of the Board Committee
meetings are presented to the Board for information. The
Chairman of the relevant Board Committee will also report to
the Board on the key issues deliberated by the Board Committee
at its meeting.
The CEO is responsible for the day-to-day management of the
business and operations of the Group in respect of both its
regulatory and commercial functions. He is supported by the
Leadership Team, as set out on pages 25 to 27 of the Annual
Report. The CEO provides the Board with a monthly status
report which includes a detailed summary of the Group's
operating drivers and financial performance for the period
as well as updates on key strategic initiatives and significant
operational issues.
As a measure to ensure the independence of the regulatory
function, the CRO provides the Board with a separate status
report on a regular basis, to inform the Board of actions taken
by the Regulation group and provide updates on regulatory
initiatives. In March 2010, the Board also reviewed the Annual
Regulatory Report 2009 before the report was submitted to the
SC. The Regulation group also kept the Board updated on the
steps taken in response to the issues raised by the SC in the
Regulatory Assessment Report of the previous year.
In addition, the Board reviewed the findings of the 2009
Customer Satisfaction Survey conducted by an external
research firm, Synovate. The survey showed improvement
in the level of satisfaction among Bursa Malaysia's external
stakeholders compared with the previous year, as well as the
relevant business units or functional groups' contribution to
the quality of business process, overall image and value. The
outcome of the survey is used as guidance to focus on areas
which require improvement.
The Board Committees comprise three Governance Committees and four Regulatory
Committees as set out in the Governance Model of Bursa Malaysia on page 80 of the
Annual Report. The TOR and composition of each Board Committee is available at
www.bursamalaysia.com.
Identifying principal risks and ensuring the implementation
of appropriate systems to manage these risks
Through the RMC, the Board oversees the ERM framework of
the Group. The RMC advises the AC and the Board on areas of
high risk faced by the Group and the adequacy of compliance
and control throughout the organisation. The RMC reviews the
risk management policies formulated by management and
makes relevant recommendations to the Board for approval.
Further details on the RMC and the Company's ERM framework
are set out on pages 74 to 75 of the Annual Report.
Succession planning including appointing, training, fixing
of compensation and, where appropriate, replacing senior
management
The Board has entrusted the NRC with responsibility to
recommend candidates for appointment to the Board, Board
Committees and key management positions, to determine
compensation packages for these appointments, and to formulate
the nomination, selection, compensation and succession policies
for the Group. The Board is satisfied that the NRC, in its current
form, effectively and efficiently discharges its functions and,
accordingly, decided in February 2010 that there was no need
to separate the nomination and remuneration functions into
discrete Nomination and Remuneration committees.
In September 2010, the NRC reviewed its TOR to reflect the
nomination and remuneration matters separately for the
purpose of clarity. As a result, it set out more expansively the
practices undertaken by the NRC as authorised by the Board, to
enhance Board effectiveness.
In reviewing the Directors' succession in line with the Board's
9-year policy, the NRC proposed to the Board in July 2010 the
establishment of data for a pool of potential directors. Each
existing Board member was asked to provide names of persons
he considered fit to be a director of the Company, thus providing
for the continued effective functioning and progressive
refreshing of the Board.
With the expiry of the CEO's contract in January 2012, the
Board established a Special Task Force (STF) in July 2010 to
identify potential candidates for the CEO position. The STF
first established selection criteria and essential qualities of
a successor, including leadership skills, strategic thinking
capability, ability to implement change and other relevant
factors. A broad spectrum of both internal and external
candidates was reviewed, taking into account background and
working experience, set against the backdrop of the criteria. The
STF presented its report together with a short-list of candidates
for the NRC's consideration, which the NRC deliberated upon
and, thereafter, gave its recommendations to the Board.
The NRC also considered the final candidate's remuneration
package as part of the CEO's appointment process, and further
recommended the same to the Board for approval. In February
2011, the Board agreed with the NRC's recommendation on the
selection of the final candidate to be the CEO in succession,
based on his competencies, strength and achievements, which
are viewed to be capable of driving Bursa Malaysia forward in
the changing exchanges landscape.
The NRC is also entrusted with the review of the human
resources plan of Bursa Malaysia, including the succession
management framework and activities, human resource
initiatives and the annual manpower budget. In January 2010,
the NRC embarked on a search and selection process for
key management positions. The appointment of Global Head,
Securities Markets was approved in July 2010 based on the
revised organisation structure. Proposed candidate for the
CMOO position was considered in December 2010 in view of
replacing the retired CMOO.
The NRC undertakes a yearly evaluation of the performance
of key management personnel (except for the Head of Group
IA/CIA who reports directly to the AC) whose remuneration is
directly linked to performance. For this purpose, the 2009 CBS
and KPIs results of the CEO, the COO and CRO were reviewed
by NRC in February 2010. The AC assessed the performance
of Head of Group IA, and further recommended the Head of
GIA's 2009 Balanced Scorecard and KPIs results to the NRC for
determination of his discretionary performance reward.
In the fourth quarter of 2010, the NRC also reviewed the
performance of the CRO for approving the renewal of the CRO's
service contract together with her remuneration package for the
next three years. The NRC further made recommendations to the
SC with its approval on the CRO's appointment in accordance
with the Guidance on the Regulatory Role of Bursa Malaysia.
Developing and implementing an investor relations
programme or shareholder communications policy for the
Company
Bursa Malaysia believes in building investor confidence
through good CG, and the Company carried out its IR activities
in accordance with the IR Policy which is available on Bursa
Malaysia's website. A separate report on IR activities is provided
on pages 56 to 57 of the Annual Report.
Reviewing the adequacy and integrity of the Company's
internal control systems and management information
systems, including systems for compliance with applicable
laws, regulations, rules, directives and guidelines
The Board is ultimately responsible for the adequacy and
integrity of the Company's internal control system. The details
on the Company's internal control system and the review of its
effectiveness are set out in the Internal Control Statement and
Risk Management Statement on pages 71 to 73 and pages 74
to 75 of the Annual Report respectively.
Constituting an Effective Board
Board Balance and Independence
The Board of Bursa Malaysia comprises 13 Directors. Four
directors are PIDs, eight are Independent NEDs and there is
one Executive Director, who is also the CEO. The four PIDs are
appointed by the MOF in line with the requirements under the
CMSA for the Company to act in the public interest, having
particular regard to the need for the protection of investors
in performing its duties as an exchange holding company.
In addition, the PIDs and Independent NEDs are all independent
of management and free from any business or other relationship
which could materially interfere with the exercise of their
independent judgement. Through the BEE Directors' Self and
Peer Assessment, the NEDs have indicated their satisfaction
with the level of independence of each of their peers and their
ability to act in the best interest of the Company in decisionmaking.
The Directors have made a valuable contribution to the
Company through their business acumen, and the application
of a wide range of functional knowledge and skills from their
long-standing experience. They are drawn from differing
backgrounds such as accountancy, law, regulation, business,
finance, stock broking and risk management. The profile of
each Director is set out in the Board of Directors' Profile on
pages 18 to 24 of the Annual Report.
The Board is satisfied with its existing number and composition.
In this regard, the Board is of the view that the current size of the
Board is appropriate given the unique composition of the Board
comprising PIDs, as well as the governance and regulatory
functions of an exchange holding company. It is also of the view
that it has the right mix of skills, experience and strength in
qualities which are relevant and enable the Board to carry out
its responsibilities in an effective and competent manner.
In Bursa Malaysia, the Chairman, who is a PID, leads the
Board. In turn, the Board monitors the functions of the Board
Committees in accordance with the respective TOR to ensure
its own effectiveness, while the CEO manages the business
and operations of the Company and implements the Board's
decisions. The distinct and separate roles of the Chairman
and CEO with a clear division of responsibilities, ensures a
balance of power and authority, such that no one individual has
unfettered powers of decision-making.
For the foregoing reason, and given the Board's ability to act
independently and objectively due to its unique composition
with 1/3 PID and more than 1/3 NED, the existing structure was
considered adequate to enable any concern on the Company
to be conveyed or channelled to the Board for its deliberation.
Nevertheless, in January 2011, the Board appointed Dato'
Dr. Thillainathan to be the Senior Independent NED2 as an
additional safeguard, to serve as a fallback point of contact
for investors and shareholders when the normal channel of
communication is considered to be inappropriate or inadequate.
As at 31 December 2010, the Company has more than 60%
public shareholding. None of the Directors are nominees of
the Company's substantial shareholders, and the Company
does not have any "significant shareholders" as defined under
the CG Code3. In view of the composition of the Board and the
calibre, expertise and experience of the Directors, the interests
of investors including the Company's minority shareholders and
the public are adequately protected and advanced.
The contact details are set out in the Corporate Information on page 83 of the Annual Report.
Board Structures and Procedures
Board and Board Committee Meetings
The Board of Directors' convened 12 meetings in 2010, out of
which eight were scheduled in advance (including two Board
offsite meetings) and four were special meetings. The Directors'
attendance was as follows:
Name of Directors
Attendance
Tun Mohamed Dzaiddin bin Haji Abdullah
(Chairman)
11/12
Dato' Tajuddin bin Atan
11/12
Datuk Dr. Md Tap bin Salleh4
8/9
Datuk Dr. Syed Muhamad bin
Syed Abdul Kadir5
3/3
Dato' Abdul Latif bin Abdullah6
3/3
Datuk Haji Faisyal bin
Datuk Yusof Hamdain Diego7
7/7
Datin Paduka Siti Sa'diah binti Sheikh Bakir
10/12
Dato' Dr. Thillainathan a/l Ramasamy
11/12
Dato' Sri Abdul Wahid bin Omar
9/12
Izham bin Yusoff
10/12
Dato' Wong Puan Wah @ Wong Sulong
12/12
Cheah Tek Kuang
9/12
Dato' Saiful Bahri bin Zainuddin
10/12
Ong Leong Huat @ Wong Joo Hwa
10/12
Dato' Yusli bin Mohamed Yusoff (CEO)
11/12
In 2010, there were five NEDs meetings led by the Chairman
of the Board, to discuss corporate and organisational issues
with a view to enhancing the overall effectiveness of the Board.
Issues of concern that were raised during the NEDs meetings
were communicated to the CEO for his necessary action and
management's continuous improvement.
The Board annual meeting calendar is prepared and circulated
to Directors before the beginning of each year. The calendar
provides the scheduled dates for meetings of the Board,
Board Committees and shareholders, major conferences
hosted by the Company, as well as the closed period for
dealings in securities by Directors based on the targeted
date of announcement of quarterly results of the Group. The
agenda of each Board meeting is finalised by the Chairman.
Meeting papers are prepared by management in accordance
with an existing agreed format which provides relevant facts,
analysis and recommendation for supporting the proposals to
enable informed decision-making by the Board. The agenda
and papers for meetings are furnished to Directors and Board
Committee members in advance to enable them to prepare for
the meetings. At Board meetings, the management presents
the papers, and consultants may be invited to provide further
insight. The Chairman encourages constructive, healthy debate,
and Directors are given the chance to freely express their
views or share information with their peers in the course of
deliberation. Any Director/Board Committee member who has a
direct or deemed interest in the subject matter to be deliberated
shall abstain from deliberation and voting on the same during
the meeting.
The Company Secretary ensures there is a quorum for all
meetings and that such meetings are convened in accordance
with the relevant TORs. The minutes prepared by the Company
Secretary memorialise the proceedings of all meetings including
pertinent issues, the substance of inquiry and response,
members' suggestions and the decisions made. In doing so,
the Company Secretary internalises the governance principles
in the Company and keeps the Board updated on the followup
action arising from the Board's decision and/or request
at subsequent meeting. This allows the Board to perform its
fiduciary duties and oversight role of the respective Board
Committees' functions.
Under the CG Code, a "significant shareholder" is defined as a shareholder with the ability
to exercise a majority of votes for the election of directors. CMDF and MOF Inc, being the
largest shareholders in Bursa Malaysia as at 31 December 2010 have equal shareholdings
in the Company. Details of their shareholdings are set out in Statistics of Shareholdings as
at 14 February 2011 on page 175 of the Annual Report.
appointed as a PID on 1 April 2010.
appointed as a PID on 5 August 2010.
ceased to be a PID w.e.f. 1 April 2010.
ceased to be a PID w.e.f. 9 June 2010.
Supply of and Access to Information
The Directors have individual and independent access to the
advice and dedicated support services of the Company Secretary
in ensuring effective functioning of the Board. The Directors
may seek advice from the Leadership Team or management on
issues under their respective purview. The Directors may also
interact directly with, or request further explanation, information
or update on any aspect of the Company's operations or
business concerns from the Leadership Team. In addition,
the Board may seek independent professional advice at the
Company's expense on specific issues to enable the Board to
discharge its duties in relation to the matters being deliberated.
Individual Directors may also obtain independent professional
or other advice in furtherance of their duties, subject to approval
by the Chairman or the Board, depending on the quantum of the
fees involved.
Board Effectiveness Evaluation
The Board has entrusted the NRC with the responsibility for
carrying out the annual BEE. An external consultant is engaged
to carry out the BEE every three years, and this exercise was
last conducted in 2008. In 2010, the Company Secretary
facilitated the NRC in carrying out the BEE exercise. The BEE
was conducted via questionnaires, which comprise a Board and
Board Committee effectiveness assessment, and a Directors
and Board Committee members self and peer assessment. The
NRC reviews the outcome of the BEE exercise, recommends to
the Board action plans for improvement and follows up on the
action plans.
The Board assessed its effectiveness in the areas of composition,
administration, accountability and responsibility, conduct,
the performance of Chairman and CEO. The Board, through
the Board Committee effectiveness assessment, examined
the respective Board Committees, including their respective
Chairmen, to ascertain whether their function and duties
are effectively discharged in accordance with the TOR. The
Directors self and peer assessment is intended to evaluate the
mix of skills, experience and other relevant qualities the NEDs
should bring to the Board, and takes into account the individual
director's ability to exercise independent judgement at all times
and their contribution to the effective functioning of the Board.
The self and peer assessment process also examines the ability
of each Board or Committee member to give material input
at meetings and demonstrate a high level of professionalism
and integrity in the decision-making process. The assessment
results form the basis of the NRC's recommendation to the
Board for the re-election of Directors at the next AGM.
The Company Secretary collates the feedback and summarises
the findings, with the assurance of anonymity, as part of the
governance review process. The NRC analyses the BEE results
and recommends to the Board an action plan for improvement
in the areas identified in the BEE. Each Board and Board
Committee member is provided with individual results together
with a peer average rating on each area of assessment for
personal development.
Training of Directors
The Company provides a dedicated training budget for
Directors' continuing education. Relevant training (internal or
external) programmes are arranged by the Company Secretary
for the Directors and members of Board Committees. The
Directors were also invited via e-mail to attend training on CG
for continuous development and update on CG best practices.
A series of talks was organised by Bursa Malaysia together
with various professional bodies throughout the year, including
'Technical Week on Leading Governance' held in April 2010 and
SC-Bursa Malaysia CG Week-Towards CG Excellence from 28
June 2010 to 2 July 2010.
The Directors may also request to attend additional training
courses according to their individual needs as a director or
member of Board Committees on which they serve. In 2010,
all Directors attended development and training programmes,
the details of which are set out on pages 167 to 171 of the
Annual Report. Each Director has attended at least three
training sessions on capital market development in 2010
in accordance with the internal policy to keep abreast with
industry developments and trends.
Two newly appointed PID, Datuk Dr. Md Tap completed the
Mandatory Accreditation Programme (MAP) in April 2010 whilst
Datuk Dr. Syed Muhamad completed the MAP in May 2005
when he was first appointed as a director of a listed issuer
in June 2005. They also attended the induction programme
organised by the Company Secretary to familiarise themselves
with the Group's business and governance processes. They
were provided with a Directors' manual which contains the
Group Governance Model, TOR and other applicable policy,
guidance or guidelines for their easy reference.
An offsite session was held on 9 December 2010 for the LC
members to discuss on common area of breaches, enforcement
actions and policies, as well as the proposed changes to the LR
and Corporate Disclosure Guide. The MPC members also had an
offsite session on 14 December 2010 to review its enforcement
policies, enforcement impact on key breaches and to discuss
on key area of changes proposed under the revamped business
rules in relation to market participants.
Appointments to the Board and Board Committees
Appointments to the Board
The NRC, which comprises one PID and four Independent NEDs,
has the responsibility to make recommendations to the Board
for the appointment of Directors other than PIDs. As part of
this process, the NRC formulates the nomination and selection
policies for the Board, and reviews candidates for appointment
as Directors based on criteria such as their qualifications,
skills, functional knowledge, experience, character, integrity
and professionalism. The NRC also evaluates the candidate's
ability to discharge his responsibilities as expected from
an independent NED and whether the test of independence
under the MMLR is satisfied, taking into account his character,
integrity and professionalism.
The Board has also approved the nine-year policy as guidance
where an independent NED who has served for nine years on
the Board, will be subjected to a rigorous review by the Board, to
determine whether the Director can continue to be independent
in character and judgement, and also to take into account the
need for progressive refreshing of the Board.
In 2010, there was no proposal of any candidate for directorship
at the 33rd AGM which was subject to Article 71 of the AA and
the SC's approval. However, two PIDs were newly appointed by
the Minister of Finance pursuant to Section 10(1) of the CMSA
in April and August 2010 respectively.
Appointments to the Board Committees
The NRC is responsible for reviewing candidates for appointment
to the Board Committees, and makes recommendations to the
Board for approval. The review is conducted on an annual basis
and when the need arises. The Board Committee members' self
and peer assessment results are used as reference by the NRC
in recommending to the Board for approval of the appointment of
the relevant Board Committees members for the ensuing term.
In April 2010, the Board established an ad-hoc Board Committee,
the Corporate Health Check Committee (CHCC), which comprised
independent NEDs, to ascertain the general health condition
and progress of Bursa Malaysia since its listing in 2005, and to
determine factors which could potentially hinder effectiveness of
the organisation. The CHCC's recommendations were approved
by the Board to be implemented for the benefit and growth of the
Company, which is also fundamental to good CG.
Re-election of Directors
Pursuant to Article 69 of the AA, an election of Directors other than
the PID, shall take place each year at the AGM of the Company
where one-third of the Directors who are longest in office shall retire
and, if eligible, may offer themselves for re-election. The NRC is
also responsible for making recommendations to the Board on the
re-election of Directors through this process of retirement by rotation
in accordance with the provisions of the AA. At the 33rd AGM held
on 29 March 2010, four Directors retired by rotation and were
re-elected to the Board by the shareholders.
Pursuant to Section 129 of the CA, a Director who is over 70 years of
age must retire at the AGM of the Company, and may be reappointed
by shareholders with not less than a 3/4 majority. At the 33rd AGM,
Tun Mohamed Dzaiddin bin Haji Abdullah, a PID was reappointed
pursuant to this provision.
Directors' Remuneration
Level and Make-up of Remuneration
The current remuneration policy for the NEDs comprises the following:
Directors' fees
RM90,000 per annum for the Chairman and RM60,000 per
annum for each NED (as approved by the shareholders at the
33rd AGM for FY2009).
Meeting allowance for each Board or Board Committee8
meeting attended by a NED
RM3,000 for the Chairman of the Board;
RM1,500 for the other members of the Board;
RM1,500 for the Chairman of a Board Committee; and
RM1,000 for the other members of the Board Committees.
The meeting allowance is also applicable to ad-hoc Board
Committees and the Tender Evaluation Committee which the
NEDs attend pursuant to the Company's policy and procedures.
Information on the composition, number of meetings held and attendance of meetings of all
Board Committees is set out on pages 81 to 82 of the Annual Report.
Benefits-in-kind and emoluments
NEDs are not entitled to participate in the ESOS or any incentive
plan for employees of the Group. They are given other allowances
such as travelling and mobile phone allowances comparable to
other PLCs, particularly those in the financial sector, GLCs and
selected stock exchanges. The Chairman is also given a monthly
fixed allowance, revised to RM50,000 since 1 March 2010, in
view of the scope of his responsibilities and the fact that he
does not serve on the boards of any other PLCs or other market
participants regulated by Bursa Malaysia to avoid COI.
The Executive Director/CEO is not entitled to the above Director's fee
nor is he entitled to receive any meeting allowance for the Board
and Board Committee meetings he attends. The CEO's remuneration
package comprises a monthly salary and other benefits/emoluments.
In addition to the above, the Directors have the benefit of D&O
Insurance in respect of liabilities arising from their acts committed in
the capacity as D&O of Bursa Malaysia. However, the said insurance
policy does not indemnify a Director or principal officer if he is proven
to have acted negligently, fraudulently or dishonestly, or in breach of
a duty or trust. The Directors and principal officers are required to
contribute jointly to the premium of the D&O Insurance Policy.
Procedure for Approving Board Remuneration
The NRC is responsible for reviewing the remuneration of the NEDs
and the Executive Director/CEO, and makes recommendations on the
same to the Board for approval. In 2010, the Board approved the
NRC's recommendation to maintain the existing remuneration policy,
given that the Directors' fees were recently increased for FY2009
upon the shareholders' approval at the 33rd AGM. Accordingly, the
Board agreed with the NRC's recommendation to maintain the
remuneration of the NEDs as appropriate taking into account the
fiduciary duties and time commitment expected of them.
The CEO's remuneration package is linked to the performance of CBS
and KPIs results for the previous year. In the evaluation, the NRC
considers four perspectives: financial, customer, internal process,
learning and growth. The CEO abstained from deliberation on his
remuneration at the Board meeting.
The last review of the CEO's remuneration package was conducted
by the NRC in the third quarter of 2009, in conjunction with the
renewal of his service contract taking into account pay mix trends
and positioning across GLCs, financial institutions and investment
banks, as well as regional exchanges. The same was recommended
to the Board for decision.
Disclosure of Board Remuneration
Disclosure of each Director's remuneration is set out in the Annual
Audited Financial Statements on page 126 of the Annual Report.
Shareholders
Dialogue between the Company and Investors
Bursa Malaysia communicates regularly with shareholders and
investors through the annual report, quarterly financial reports
and various announcements made via Bursa LINK. Financial and
market statistics and press releases are placed on Bursa Malaysia's
website to keep shareholders and investors informed on the Group's
performance and operations. Analyst briefings are held twice a year, in
connection with the half yearly and annual financial results, following
announcements via Bursa LINK to ensure fair dissemination to the
public generally. These briefings include a presentation, conference
call as well as a Question and Answer session. The events are
web-cast, and a transcript is also made available to all shareholders
and investors on Bursa Malaysia's website. A detailed report on
Investor Relations appears on pages 56 to 57 of the Annual Report.
Annual General Meeting
Although the AGM is mandated as an occasion for shareholders,
the Chairman allowed representatives of the media to attend the
33rd AGM. All 13 Directors were present to account to the shareholders
for their stewardship of the Company. The proceedings of the
33rd AGM included the CEO's presentation of the Company's operating
and financial performance for 2009, the presentation of the external
auditors' unqualified report to the shareholders, and a Question and
Answer session in which the Chairman invited shareholders to raise
questions on the Company's accounts and other items for adoption at
the meeting, before putting a resolution to vote. The Directors, CEO/
management and external auditors were in attendance to respond
to the shareholders' queries. The CEO also shared with the meeting
the responses to the questions submitted in advance by the MSWG.
Shareholders were invited to drop any additional questions in an
enquiry box placed at the venue of 33rd AGM so that they might
be responded to in writing after the meeting. The officers of the
Company were also present to handle enquiries from shareholders.
All NEDs abstained from voting on the resolution concerning their
remuneration. The external auditors were on standby to act as
scrutineers, but there was no demand for a poll. All the resolutions
set out in the Notice of the 33rd AGM were put to vote by show of
hands and duly passed. The outcome of the 33rd AGM was announced
on the same day via Bursa LINK, which is accessible on Bursa
Malaysia's website. The minutes of AGM were posted in the financial
section of IR Portal.
In response to the directive dated 19 February 2010 to all listed
issuers, Bursa Malaysia had issued a letter to shareholders on 5 March
2010 together with Notice of 33rd AGM to inform the shareholders
of the implementation of e-Dividend and its benefits in September
2010. The Company's representatives were available at the venue
of 33rd AGM to brief the shareholders on the benefits of e-Dividend
and the registration process in view of the commencement date of
registration for e-Dividend on 19 April 2010.
Corporate Sustainability
The Board promotes good CG in the application of sustainability
practices in Bursa Malaysia, the benefits of which will translate to
better corporate performance. A detailed report on sustainability
activities appears on pages 58 to 61 of the Annual Report.
Accountability and Audit
Financial Reporting
The Board ensures that shareholders are provided with a balanced
and meaningful evaluation of the Company's financial performance,
its position and its future prospects, through the issuance of Annual
Audited Financial Statements and quarterly financial reports and
corporate announcements on significant developments affecting the
Company in accordance with the MMLR. In this respect, the financial
statements are reviewed by the AC at its meetings, in the presence
of external auditors and internal auditors, before being presented
to the Board for approval. The CFO also presented to the AC and
the Board slides containing details of revenues and expenses in the
form of charts, for review of quarter-to-quarter and year-to-date
financial performance against budget. The Chairman's Message and
CEO's Message on pages 16 to 17 and pages 34 to 47 of the Annual
Report provide additional analysis and commentary. The Directors'
Responsibility Statement for the Annual Audited Financial Statements
of the Company and Group is set out on page 87 of the Annual Report.
Internal Control
The Company continues to maintain and review its internal control
procedures to ensure, as far as possible, the protection of its assets
and its shareholders' investments. Details of the Company's internal
control system and the framework are set out in the Internal Control
Statement together with Risk Management Statement and AC Report
on pages 71 to 73, pages 74 to 75 and pages 76 to 77 of the Annual
Report respectively.
Relationship with Auditors
Bursa Malaysia's relationship with its external auditors is primarily
maintained through the AC and the Board. The AC has explicit
authority to communicate directly with external and internal auditors.
The Head of Group IA reports directly to the AC and he/she is present
at all AC meetings together with the relevant members of his staff. The
CEO and management only attend the AC meetings upon invitation.
The external auditors did not call for any other meeting with the
AC apart from the review of financial statements. The AC held two
meetings with the external auditors in 2010 to discuss management's
cooperation in the audit process, the quality and competency in the
financial reporting function, the state of affairs of the IA function and
audit issues in relation to appropriate accounting treatment. These
meetings were held without the presence of the Head/Acting Head
of Group IA and internal auditors, the CEO and management. Further
details on the AC in relation to the external auditors are set out in the
AC Report on pages 76 to 77 of the Annual Report.
Other Areas
Conflict of Interest
In addition to being a business oriented listed entity, Bursa
Malaysia has also discharged its obligation as a market regulator.
In this regard, COI or potential COI may arise in the course of Bursa
Malaysia or its subsidiaries carrying out their respective functions for
commercial reasons or the proper performance of its statutory duties
as an exchange holding company. Where Bursa Malaysia's own or
any other interest conflicts with the public interest, the latter will
prevail as Bursa Malaysia is bound by law to act in the public interest,
having regard to the need for investor protection.
Bursa Malaysia has continued to maintain the separation of business
functions from its regulatory functions. This is to ensure that these
functions operate independently, and that business units within
Bursa Malaysia are not in a position to influence any supervisory
or regulatory decisions made by Regulation. Furthermore, Bursa
Malaysia has put into place arrangements and appropriate controls
to identify and deal with COI. During the year, Bursa Malaysia has
conducted briefing to staff to educate and instil greater awareness
pertaining to the COI Guidelines. The Group IA has also performed
review on compliance with certain internal processes and
procedures, to ensure that conflicts are being properly identified
and managed.
In 2010, there was no actual COI arising between Bursa
Malaysia's commercial interests and the proper performance of its
regulatory duties.
Related Party Transactions
An internal compliance framework exists to ensure that the Company
meets its obligations under the MMLR including obligations in
connection with related party transactions. The Board, through the
AC, reviews all related party transactions. A Director who has an
interest in a transaction must abstain from deliberation and voting
on the relevant resolution in respect of such transaction at the Board
meeting. In 2010, there was no transaction entered into by Bursa
Malaysia or its subsidiaries involving conflicts arising from the direct
or indirect interest of a director or person connected with such
director.
A list of the significant related party disclosures between the Company
and its subsidiaries, and between the Group and other related parties
including relevant key management personnel for FY2010 is set out
on pages 152 to 154 of the Annual Report.
Code of Ethics
The Company's Codes of Ethics for Directors and employees continue
to govern the standards of ethics and good conduct expected from
Directors and employees, respectively. The Code of Ethics for
Directors, for example, includes principles relating to the Directors'
duties, COI and dealings in securities. For employees, the Code of
Ethics covers all aspects of the business operations of the Company
such as confidentiality of information, dealings in securities, COI,
gifts, gratuities or bribes, dishonest conduct, sexual harassment and
the Company's whistle-blowing procedures.
The management conducted a review on the Code of Ethics
for employees with an aim to enhance effectiveness of the
whistle-blowing mechanism and procedures. The management also
undertook further review in the light of the Whistleblower Protection
Act 2010 which came into effect on 15 December 2010.
Dealing in Securities
The Guidance to Directors for Dealings in Securities was revised in
September 2010 to provide clarity to the procedures for compliance
by Directors in accordance with the MMLR when dealing in securities
of Bursa Malaysia during and outside the closed periods. The
revision comprised the relevant provisions on the Directors' duty
to make disclosure under the CA and CMSA using the prescribed
form of notification for dealings in securities of Bursa Malaysia. The
Guidance also provides that Directors must not deal in securities
as long as they are in possession of price-sensitive information,
consistent with CMSA which prohibits insider trading. In 2010, none
of the Directors dealt in securities of Bursa Malaysia during closed
periods, although they may do so under exceptional circumstances if
deemed acceptable by the Chairman of the Board or, in his absence,
the AC Chairman.
The employees of the Company (including principal officers) are
informed in advance through internal communication via e-mail
before the commencement of each closed period, in which they are
not allowed to trade as prescribed under the Securities Transaction
Policy to curb insider trading and to avoid COI.
Compliance Statement
The Board is satisfied that in 2010 the Company has complied with
the best practices of the CG Code save for the appointment of a Senior
Independent NED, which took effect in January 2011.