Bursa Malaysia Annual Report 2014

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GOVERNANCE
Bursa Malaysia • Annual Report 2014 54
The Governance Model is supported by the Corporate Authority
Manual (CAM), which clearly delineates relevant matters and
applicable limits, including those reserved for the Board’s
approval, and those which the Board may delegate to the Board
Committees, the CEO and Management. 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.
The Governance Model and the CAM are reviewed as and when
required, to ensure an optimum structure for efficient and
effective decision-making in the organisation. In April 2014, the
Board conducted a holistic review of the Governance Model of
Bursa Malaysia Group, including the structure and membership
composition of the Board of subsidiaries and the Board Committees.
The Governance Model document was reviewed during the year
to reflect various changes arising from new requirements or for
compliance with standards and best practices that were applicable
to Bursa Malaysia as a listed entity, an exchange holding company
(EHC) and a frontline regulator.
One of the key changes to the Governance Model in 2014 was
the dissolution of the Compensation Committee (CC) following the
transfer of the Securities Compensation Fund and the Derivatives
Fidelity Fund to the Capital Market Compensation Corporation in
2013. All outstanding claims against the funds under the purview
of the CC had been dealt with at its meetings prior to the dissolution
in May 2014. In view that the Depository Compensation Fund still
remains with Bursa Malaysia Group, the Board delegated to the
Market Participants Committee (MPC) the authority to determine
the claims made against the Depository Compensation Fund and
to make related decisions on such claims. The Appeals Committee
will determine any appeals arising from decisions made by the
MPC in relation to the said claims.
The CAM was also reviewed in 2014, to provide clarity and the
necessary updates based on changes to the Terms of Reference
(TOR) of the Board Committees throughout 2014 relating to their
respective authorities and responsibilities.
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 TOR2. Although specific
powers are delegated to the Board Committees, the Board keeps
itself abreast of the key issues and decisions made by each Board
Committee through the reports by the Chairman of the Board
Committee and the tabling of minutes of the Board Committee
meetings at Board meetings.
CORPORATE GOVERNANCE STATEMENT
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 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 an annual strategy
planning process, whereby Management presents to the
Board its recommended strategy and proposed business
and regulatory plans for the following year at a dedicated
session. At this session, the Board reviews and deliberates
upon both Management’s and its own perspectives, as well as
challenges Management’s views and assumptions, to deliver
the best outcomes. In conjunction with this, the Board also
reviews and approves the annual budget for the coming year
and sets the Key Performance Indicators (KPIs) under the
Corporate Balanced Scorecard (CBS).
The strategy planning process for 2014 began at an off-
site Board meeting held in June 2013, where Management
presented the proposed 2014-2016 strategy and framework
for discussion with the Board. Subsequent to this, Management
prepared and presented the 2014-2016 Business Plan,
the 2014 Detailed Action Plan and Budget for the Board’s
review at the Board meeting in October 2013. The Director
of Regulation also presented the 2014-2016 Regulatory Plan
and Budget for the Board’s review. Both the 2014 Business
and Regulatory Plans (BRP), including the 2014 Key Action
Plan, were approved by the Board at this meeting.
In June 2014, the Board conducted a mid-year review of the
2014 BRP and the Budget at an off-site meeting, where the
targets set by the Board were compared against the actual
performance for the year to date. The Board reviewed the
sustainability, effectiveness and implementation status of the
2014 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 as well as
to maintain orderly markets in line with the approved plans. In
its review, the Board also discussed strategy implementation
processes, identifying the internal and external factors which
had supported various achievements in the past, or will
constitute future challenges for Management. At the same
off-site meeting, the Board gave its feedback on focus areas,
key initiatives, and the product roadmap in planning the 2015
Key Action Plan.
2 The TOR of each Board Committee, as well as the names of members of the Board Committees for the term of appointment from 1 July 2014 to 30 June 2015, are available at ,About Us-
Corporate Governance