Bursa Malaysia • Annual Report 2013
51
Governance
Corporate Governance Statement
The Governance Model is supported by the Authority Limits Document
(ALD), which clearly sets out relevant matters with applicable
thresholds, including those reserved for the Board’s approval, and
those which the Board may have delegated to the Board Committees,
the CEO and Management. The Governance Model and the ALD are
reviewed as and when required, to ensure an optimum structure for
efficient and effective decision-making in the organisation.
Key matters reserved for the Board’s approval include the annual
business plan and budget, dividend policy, business continuity plan,
new issues of securities, business restructuring, expenditure above a
certain limit, disposals of significant fixed assets and the acquisition
or disposal of companies within the Group.
Over the course of 2013, the Board approved the award of contracts
to selected vendors which were recommended by the Special Tender
Committee through the tender process for procurement of goods and
services based on assessment from the technical, functional, and
financial perspectives.
The Board Committees are entrusted with specific responsibilities
to oversee the Group’s affairs, with authority to act on behalf of the
Board in accordance with their respective Terms of Reference
2
(TOR).
Although specific powers are delegated to the Board Committees, the
Board continues to keep itself abreast of the actions and decisions
taken by each Board Committee, including key issues via reports by
the Chairman of each of the Board Committees, as well as the tabling
of minutes of all Board Committee meetings, to the Board at Board
meetings.
In August 2013, the Board established a new Board Committee,
namely the Regulatory and Conflicts Committee (RACC) chaired by a
Public Interest Director (PID) and Chairman of the Board, to oversee
the regulatory functions and conflicts arrangement within the Group,
to further strengthen its internal governance. The scope of the RACC’s
responsibilities had been extended to include the management and
administration of the Capital Market Education and Integrity Fund
3
(CMEIF) of Bursa Malaysia (previously undertaken by the CMEIF
Committee) to determine, review and approve the utilisation of the
CMEIF in accordance with the approved CMEIF’s Authority and
Guidelines Manual.
1.2 Clear Roles and Responsibilities
The Board has wide responsibilities which are discharged in the best
interests of the Company in pursuance of its integrated regulatory and
commercial objectives. Amongst the key responsibilities of the Board
are as described below:
a. Reviewing and adopting the Company’s strategic plans
The Board plays an active role in the development of the
Company’s strategy. It has in place a strategy planning process,
whereby Management presents to the Board its recommended
2
TheTOR of each Board Committee together with the names of members of the Board Committees for the term of appointment from 12 May 2013 to 11 May 2014 are available at
Us-Corporate Governance section.
3
The CMEIF was set up on 1 January 2013 to account for all fines and transfer fees imposed and collected by Bursa Malaysia Group.These monies are segregated and used to educate market participants and investors as well as to defray legal or court
expenses relating to the Group’s regulatory enforcement actions.The amount of CMEIF stood at RM17.7 million as at 31 December 2013.
strategy annually, together with the proposed business and
regulatory plans for the ensuing year at a dedicated session,
for the Board’s review and approval. At this session, the Board
deliberates upon both Management’s and its own perspectives,
as well as challenges Management’s views and assumptions,
to deliver the best outcome. In conjunction with this, the Board
also reviews and approves the annual budget for the ensuing
year, and sets the Key Performance Indicators (KPIs) under the
Corporate Balanced Scorecard (CBS), ensuring that the targets
correspond to the Company’s strategy and Business Plan and
reflect industry and competitive trends, internal capabilities as
well as provide sufficient stretch for Management.
For 2013, the strategic planning process began at an offsite
Board meeting held in November 2012, where Management
presented its proposals for the Board’s review. The Board
subsequently approved the Company’s Strategy and 2013
Business and Regulatory Plans (BRP). The Board actively
engaged with Management in monitoring the progress of
initiatives and projects identified in the 2013 BRP and, where
required, identified alternative measures to be taken to ensure
the successful realisation of the strategies.
In June 2013, the Board conducted a mid-year review of the
2013 BRP as well as the Budget at an offsite meeting where
the targets set by the Board were compared against the actual
performance year-to-date. The Board reviewed the sustainability,
effectiveness and implementation of the 2013 BRP, and provided
guidance and input to Management, taking into consideration
the need to continuously invest, build and grow the three main
markets of Bursa Malaysia in line with the approved plans. The
Board also discussed strategy implementation processes taking
cognisance of internal and external factors which had supported
various achievements as well as challenges facing Management.
At the same offsite meeting, Management presented to the
Board a number of potential ideas which were being explored for
inclusion in the Group’s strategies for 2014-2016. The Board’s
guidance and feedback was sought by Management based
on a general framework which focused on staying relevant,
and leveraging on Bursa Malaysia’s strength, as the guiding
principles in formulating its 2014-2016 Business Plan to drive
Bursa Malaysia’s performance.
In early October 2013, Management presented to the RACC an
overview of the 2014-2016 regulatory framework which set
out the regulatory roadmap to facilitate the discharge of Bursa
Malaysia’s regulatory function, in tandem with its capital market
development efforts. In its review, the RACC also considered
the proposed 2014-2016 Regulatory Plan and Budget and the
corresponding regulatory issues and challenges expected during
this period.
