Bursa Malaysia Annual Report 2015

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GOVERNANCE
61 Bursa Malaysia • Annual Report 2015
CORPORATE GOVERNANCE
STATEMENT
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
pre-determined 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. The Terms of
Reference (“TOR”) of the Board Committees in the Governance
Model document were amended during the year to reflect the
necessary changes in the internal process, to ensure operational
efficiency as well as for compliance with international standards.
One of the enhancements introduced by the Board during
the year was to transfer the oversight responsibilities of the
compliance function from the Audit Committee (“AC”) to the Risk
Management Committee (“RMC”).
The Board of Bursa Malaysia as a listed entity and an exchange
holding company (“EHC”)2 has entrusted its Board Committees
with specific responsibilities to oversee the Group’s affairs in
accordance with their respective TOR3. 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.
In 2015, the Board took several steps to enhance its oversight
role on the developments in the key functional areas of Bursa
Malaysia as an EHC. With the view to provide direct line of sight
with regard to the key functional areas of the Group, the Board
decided to appoint its Directors to serve on the Boards of the
subsidiary companies that operate the securities exchange, the
derivatives exchange and the clearing houses of the exchanges.
As such, during the year, two Directors were appointed to the
Board of Bursa Malaysia Securities Berhad (“BMS”) and Bursa
Malaysia Securities Clearing Sdn Bhd (“BMSC”), and another
two Directors were appointed to the Board of Bursa Malaysia
Derivatives (“BMD”) and Bursa Malaysia Derivatives Clearing
(“BMDC”). The Board keeps itself abreast of the developmental
issues in the key functional areas of the Group through the
reports of the Chairmen of the above subsidiary companies and
the tabling of the minutes of the Board meetings of the subsidiary
companies at the EHC Board meetings. In July 2015, the Board
further decided to include at least one independent director with
relevant industry experience on the Boards of BMS and BMSC as
well as BMD and BMDC to strengthen the Board composition with
the appropriate mix of skill sets and expertise, for meeting the
future needs of both the exchanges and their respective clearing
houses.
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. The key responsibilities of the Board include:
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 furtherance of this, the
Board then reviews and approves the annual budget for
the ensuing year and sets the Key Performance Indicators
(“KPIs”) under the Corporate Scorecard.
The strategy planning process for 2015 began at an off-site
Board meeting held in June 2014, where the Management
presented the proposed 2015 Action Plan for discussion
with the Board based on the progress of the 2014 Business
Plan. Subsequent to this, the Management prepared and
presented its 2015 Business Plan and Budget for the Board’s
review at the Board meeting in October 2014. The Director
of Regulation also presented the 2015 Regulatory Plan and
Budget for the Board’s review. Both the 2015 Business and
Regulatory Plans, including the 2015 Key Action Plan, were
approved by the Board at this meeting.
At an off-site meeting in June 2015, the Board conducted a
mid-year review of the 2015 Business Plan and Budget as
well as the financial performance, where the targets set by
the Board were compared against the actual performance
2 Bursa Malaysia is an EHC approved under Section 15 of the Capital Markets and Services Act 2007
3 The tenure for Board Committee members shall be for two years.However, the Board may revoke the appointment and/or vary the term of appointment of a member at any time as it deems fit.TheTOR of each
Board Committee is available at ,and the list of its current members is available at
corporate/about-us/corporate-governance/membership-of-board-committees