Bursa Malaysia Annual Report 2015

GOVERNANCE

Bursa Malaysia •

Annual Report 2015

b. Annual assessment and its criteria in respect of the

Board and Board Committees, Directors and Board

Committee members

The NRC carries out the Board Effectiveness Evaluation

(“BEE”) exercise annually. An external consultant is engaged

every three years to assist the NRC in this assessment,

with the last one conducted by an external consultant in

2014. In September 2015, the NRC approved the approach

for the conduct of BEE 2014/2015 to be facilitated by the

Company Secretaries and reviewed the questionnaires for

the BEE 2014/2015, which comprised a Board and Board

Committee Effectiveness Assessment, Directors and Board

Committee members’ Self and Peer Assessment (“SPA”), as

well as a 360 Degree Assessment by members of senior

management.

The effectiveness of the Board is assessed in the areas of the

Board’s responsibilities and composition, meeting process,

administration and conduct, interaction and communication

with Management and stakeholders and Board

engagement, as well as the effectiveness of the Chairman

and the CEO. The Board, through the Governance and

Regulatory Committee Effectiveness Assessment, examines

the respective Governance and Regulatory Committees,

including their respective Chairmen, to ascertain whether

their functions and duties are effectively discharged in

accordance with their respective TOR. The effectiveness of

the Board Committees is assessed in terms of structure and

processes, accountabilities and responsibilities, as well as

the effectiveness of the Chairmen of the respective Board

Committees.

The NRC also approved the performance criteria for the

assessment of individual Directors through the Directors’

SPA questionnaire under four main areas, i.e. Board

dynamics and participation, competency and capability,

exercise of independent judgement and objectivity with

integrity, as well as contribution and performance.

The SPA for the Board Committee members is similar to the

Directors’ SPA,which is intended to assess their contribution,

performance, calibre and personality in relation to the skills,

experience and other qualities they bring to the Board/Board

Committees. The SPA process also examines the ability of

each Board or Committee member to give input at meetings

and to demonstrate a high level of professionalism and

integrity in the decision-making process. It also takes into

account the ability of each individual Director and Board

Committee member to exercise independent judgement

and demonstrate objectivity and clarity of thought on issues

during deliberations at meetings, provide logical honest

opinion, and offer practical and realistic advice to the Board

and/or Committees’ discussions.

The NRC also sought feedback from the members of senior

management via the issuance of 360 Degree Assessment

questionnaires in conjunction with the BEE 2014/2015

exercise. The Management’s feedback/observations on the

Board’s role, and the extent/effectiveness of partnership/

collaboration between the Board and Management in

certain focus areas or support functions are useful for the

Board’s consideration in enhancing its overall effectiveness.

The NRC had in October 2015 reviewed the outcome of

the BEE 2014/2015, and considered each of the feedback/

comments given by the Board/Board Committee members

for the Board’s improvement. The NRC also considered the

proposed action plans for areas which had been identified

for improvement. In November 2015, the Board resolved

to adopt the BEE 2014/2015 results and the action plans

for enhancements by the Board and the respective Board

Committees, as recommended by the NRC. The average

rating of at least 3.50 and above on a 5-point scale in

respect of the performance criteria indicated the Board’s

consensus that each of the Directors’ level of performance

was either satisfactory or good, and that they had also

met the performance criteria in the prescribed areas of

assessment.

Each Board member was provided with his/her own

individual results of the Directors’ SPA together with a peer

average rating on each area of assessment for personal

information and further development. In December 2015,

the Regulatory Committee members who are non-Directors

of Bursa Malaysia were also provided with the results of the

respective Committee Effectiveness Assessments including

the Committee members’ feedback, the individual results of

the Committees’ SPA together with a peer average rating

on each area of assessment for personal information and

further development.

The results of these assessments form one of the basis of

the NRC’s recommendations to the Board for the re-election

of Directors at the next AGM, and the re-appointment of

Board Committee members for the ensuing term of two

years from 1 July 2016.

CORPORATE GOVERNANCE

STATEMENT

15 Paragraph 15.08A(3)(c) of the MMLR