Corporate Governance

MISC Berhad (“MISC” or “the Company”) observes internationally recognised best practice standards of corporate governance. The Board of Directors (“the Board”), Management and employees of the Company continue to improve the standard of corporate governance practices throughout the MISC Group.  As a public listed company on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”), MISC applies the recommendations as set out in the Malaysian Code on Corporate Governance 2012 (“the Code”) and the requirements of the Main Market Listing Requirements of Bursa Securities.

 

MISC believes that sound corporate governance practices are fundamental towards winning investors’ confidence and are prerequisites to achieving the Company’s ultimate objectives of enhancing long-term shareholders’ value and protecting shareholders’ interest. The Company has established a Corporate Governance Framework that is structured based on the responsibilities and accountabilities of the entities involved. Each layer of responsibility in the framework is distinctly different but compliments each other in attaining the objectives of the Group.



In discharging its roles and responsibilities, the Board is guided by the MISC Board Charter that provides the framework for the performance of Board’s function and duties vis-a-vis the Company and Management. The Board of Directors is assisted by the Board Audit Committee (“BAC”) and Nomination & Remuneration Committee (“NRC”) which operate under their respective Terms of Reference.  

 

To support the Corporate Governance Framework, the Board has established an MISC Risk Management Framework and an Internal Control System. The MISC Risk Management Framework is adopted from the PETRONAS Enterprise Risk Management Framework.

 

The MISC Enterprise Risk Management Framework provides an integrated view for managing risks focusing on three (3) frameworks namely Enterprise Risk Management (“ERM”), Crisis Management and Business Continuity Management.  The MISC Risk Policy states as follows:-

 

“MISC shall adopt and implement risk management best practices by identifying, assessing, treating and monitoring risks as well as effectively crises. In the event of prolonged disruption, business continuity practices shall be adopted to restore and ensure continuity of MISC’s key business activities”

 

Hence, the Company leverages on the ERM Framework to ensure all business risks are prudently identified, evaluated and managed accordingly. The aim is to reduce the likelihood and impact of all identified risks to enhance the Group’s ability to achieve its strategic objectives.  

 

In addition to the Risk Management Framework, there are other key internal control systems and processes within MISC covering review of quarterly financial performance by Management, BAC and Board, review of key operating performance and legal, environment and regulatory matters by Management, implementation of MISC annual planning and budgeting exercise and investment appraisal process, MISC Limits of Authority, PETRONAS Financial Control Framework, PETRONAS Debt Compliance Management, Procurement Manual, Performance Management System and Information and Communications Technology Steering Committee. Assurance functions covering Group Internal Audit, Ship Management Audit, Corporate Health, Safety and Environment compliance and Corporate Security oversight, also complement the internal control processes.  In addition, there are sound guidelines and processes to oversee Related Party Transactions, Conflicts of Interest, Corporate Disclosures, and specific systems and processes stemming from the implementation of the MISC Code of Conduct and Business Ethics (“CoBE”).

 

Company performance is strictly monitored via a Company Balanced Scorecard which outlines five (5) dimensions for monitoring performance, i.e., Financial, Strategic Initiatives, Operations, Health Safety and Environment (HSE) and People Development, in line with the Annual Business Plan and Budget approved by the Board.

 

The effectiveness of the Company’s Risk Management Framework and internal control systems and processes is periodically reviewed and/or tested by the Board Audit Committee in order to ensure their robustness.

 

Further details of the MISC Corporate Governance Framework together with Risk Management Framework and Internal Control System are set out in MISC’s Annual Report  under the Statement on Corporate Governance and Statement on Risk Management & Internal Control, respectively.