Bursa Malaysia Annual Report 2015

GOVERNANCE

Bursa Malaysia •

Annual Report 2015

CORPORATE GOVERNANCE

STATEMENT

c. Identifying principal risks and ensuring the

implementation of appropriate systems to manage them

Through the RMC, the Board oversees the risk management

framework of the Group. The RMC advises the AC and the

Board on areas of high risk and the adequacy of compliance

and control procedures throughout the organisation.

The RMC reviews and recommends the annual Corporate Risk

Profile which specifies the key enterprise risks for approval by

the Board. In November 2015, the RMC conducted a review

of the risk management policy and guidelines to streamline

the risk management framework, practices and processes of

the Group to an internationally recognised benchmark, and

to integrate them into key processes such as business case

development and project implementation. The revisions to

the Risk Management Principles & Framework and the Risk

Management Process & Guidelines were approved by the

Board as recommended by the RMC.

Details of the RMC and the Company’s risk management

framework are set out in the Statement on Internal Control

and Risk Management of this Annual Report.

d. Succession planning

The Board, through the Nomination and Remuneration

Committee (“NRC”), is responsible for ensuring that there is

effective and orderly succession planning in Bursa Malaysia

Group. The TOR of the NRC provides that it is responsible for

formulating nomination, selection and succession policies

for the Group’s key management positions including the CEO.

In discharging its responsibility on succession planning, the

NRC receives succession management updates from GHR

in accordance with the approved succession management

framework. This framework includes the implementation of

the Senior Leadership Development (“SLD”) Programme for

identified candidates within the organisation as preparation

for internal pipeline of talents to assume mission and

operational critical positions in the Group. In monitoring

the progress of the SLD Programme, which is conducted

over a period of 24 months for the potential successors of

key management positions, the NRC reviews the regular

updates from GHR and provides its feedback for continuous

improvement.

The NRC is responsible for reviewing candidates for key

management positions and determining the remuneration

for these appointments. In this respect, the NRC considers

new appointments and renewal of service contracts of key

management positions to ensure all candidates appointed to

these positions are of sufficient calibre. For this purpose, the

factors considered by the NRC include the suitability of the

shortlisted candidates based on their profiles, professional

achievements and personality assessments. The NRC also

conducts interviews with shortlisted candidates to validate

the assessment of the individuals. However, in 2015, there

were no new appointments of key management positions

made by the NRC. The NRC had only considered the renewal

of the service contracts of two key management personnel

in January and September 2015 having regard to their

performance, contributions, achievements and deliverables

during their tenure in their respective positions. The NRC

further considered the remuneration packages for the key

management personnel when finalising the terms and

conditions of their service contracts.

Pursuant to Clause 12.1 under Part II: Regulatory Oversight

of the Guidance on the Regulatory Role of Bursa Malaysia

dated 28 March 2012, the appointment of any Management

Committee position in Bursa Malaysia is subject to

consultation with the SC, taking into account full and proper

consideration of the SC’s view on this matter. Accordingly,

in 2015, the SC had been consulted on the renewal of the

service contracts for the relevant Management Committee

members.

The NRC undertakes annual evaluation of the performance

of the key management personnel (except for the Head

of Group Internal Audit (“GIA”) and Director of Regulation)

based on their scorecards

with KPI measurements as

the quantitative performance criteria. The Head of GIA

reports to the AC who evaluates her performance, while

the RACC evaluates the performance of the Director of

Regulation. Both the AC and RACC then provide their

recommendations to the NRC based on the outcome of

their respective performance assessments. Generally, the

remuneration of the key management personnel is directly

linked to performance and hence, the performance bonus

for the year would be determined by the NRC based on their

performance ratings. For this purpose, the 2015 Corporate

Scorecard and KPI results of the CEO and relevant key

management personnel were reviewed by the AC, RACC and

the NRC at their respective meetings in January/February

2016.

6 Which are aligned to the KPIs of the 2015 Corporate Scorecard as approved by the Board at its 8

meeting held on 6-7 December 2014