corporate governance report stock code : 5258 …

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CORPORATE GOVERNANCE REPORT STOCK CODE : 5258 COMPANY NAME : BIMB HOLDINGS BERHAD FINANCIAL YEAR : 31 DECEMBER 2020 OUTLINE: SECTION A – DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE Disclosures in this section are pursuant to Paragraph 15.25 of Bursa Malaysia Listing Requirements. SECTION B – DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES PERSUANT CORPORATE GOVERNANCE GUIDELINES ISSUED BY BANK NEGARA MALAYSIA Disclosures in this section are pursuant to Appendix 4 (Corporate Governance Disclosures) of the

Corporate Governance Guidelines issued by Bank Negara Malaysia. This section is only applicable for

financial institutions or any other institutions that are listed on the Exchange that are required to comply

with the above Guidelines.

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SECTION A – DISCLOSURE ON MALAYSIAN CODE ON CORPORATE GOVERNANCE Disclosures in this section are pursuant to Paragraph 15.25 of Bursa Malaysia Listing Requirements. Intended Outcome Every company is headed by a board, which assumes responsibility for the company’s leadership and is collectively responsible for meeting the objectives and goals of the company. Practice 1.1 The board should set the company’s strategic aims, ensure that the necessary resources are in place for

the company to meet its objectives and review management performance. The board should set the

company’s values and standards, and ensure that its obligations to its shareholders and other

stakeholders are understood and met.

Application Applied

Explanation on application of the practice

The Board of Directors (“Board”) has overall responsibility for promoting the sustainable growth and financial soundness of BHB and to periodically review and approve the overall strategies, business and pertinent policies of the Company. The Board have the fiduciary duties to ensure that at all times exercise their powers for a proper purpose and in good faith in the best interest of the Company. In discharging their duties, the Board exercise reasonable care, skill and diligence with the knowledge, skill and experience which are expected of a director. The Board deemed to makes business judgement for a proper purpose and in a good faith with no personal interest in the subject matter of the business judgement with reasonably believes that the business judgment is in the best interest of the Company. The Board has the overall responsibility for promoting the sustainable growth and financial soundness of the Company, and for ensuring reasonable standards of fair dealing, without undue influence from any party. This includes a consideration of the long-term implications of the Board’s decision on BHB, its stakeholders and the general public.

In addition, the Board has the power to decide on all matters pertaining to the Company’s business as empowered by the Company’s Constitution, Companies Act, 2016 and all relevant regulatory guidelines of Bank Negara Malaysia, Securities Commission and Bursa Securities Listing Requirements, and if required, to delegate these powers accordingly.

The primary duties and responsibilities of the Board include the followings:- Business Direction/Operations a) Review and approve all strategic and policy matter including the strategic

business plan and significant operating policies of the Company and monitor the Management’s performance based on Key Performance Indicators within the budget as approved by the Board.

b) Approve any investments, divestment and acquisitions including the setting up of new subsidiaries/associated companies and any participation in new business activities.

c) Approve the appointment of Advisors.

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d) Monitor the quantitative and qualitative performance of the Company and BHB Group against the targets and objectives determined by the Board.

e) Oversee all facets of the Company’s operation from technical to investment and ensure they are undertaken according to the Company’s targets and objectives.

f) Make recommendation for approval of the shareholders the appointment and removal of Auditors and to fix their remuneration.

g) Consider and recommend such resolutions as required by law or by the Company’s Constitution to shareholders in general meeting.

h) Appoint or remove the Company Secretary/Joint Secretary/Assistant Company Secretary. The Board should appoint a suitably qualified and competent company secretary who can support the Board in carrying out its roles and responsibilities.

i) Develop and implement an investor relations programme or shareholder communications policy for the Company.

j) Promote sustainability through appropriate environmental, social and governance consideration in the Company’s business strategies.

k) Approve all transactions within its authority limit including acquisition of and prepayment of any financing or indebtedness of the Company.

l) Review and approve any appointment of corporate representative to act on behalf of the Company.

m) Review and approve BHB’s Capital Adequacy Assessment Process (ICAAP) and Capital Management Plan and Policy.

n) On the implementation of ICAAP:- (i) To note and monitor reports on capital adequacy; and (ii) To review internal audit reports on capital management.

Finance a) Review the adequacy and integrity of the Company’s accounting and financial

reporting systems and ensure appropriate controls are in place. b) Review and approve the following matters, including but not limited to:-

i. Annual business plan and budget of the Company; ii. Quarterly and year-end financial statement of the Company; iii. Distribution of the Company’s dividend (subject to shareholders approval, if

applicable); and iv. Any purchase or disposal of goods or fixed assets within limits stipulated in

the Authority Limit document. Risk Management a) Review and approve the risk appetite, business plans and other initiatives of the

Company which would have a material impact on the Company’s risk profile. b) Review and approve risk management policies and ensure that the Company

establishes adequate internal controls and infrastructure. c) Identify principal risks to ensure the implementation of appropriate systems to

manage these risks. d) Review and approve any new outsourcing proposals. e) Oversee and approve the recovery and resolution as well as business continuity

plans for the Company to restore its financial strength, and maintain or preserve critical operations and critical services when it comes under stress.

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f) Review and approve the entry into, or variation of, any contract, arrangement or commitment with any related party or any dealing involving conflict of interest situation.

Compliance a) Review relevant reports or proposals to ensure operations of the Company are

in compliance with the security laws, the Companies Act 2016, Listing Requirements and the Company’s Constitutions and any regulations and guidelines under the relevant laws.

b) Perform the oversight function over the effective functioning of the Shariah governance policy and ensure that the policy commensurate with the size, complexity and nature of business.

c) Consider and provide any response, attestation, undertaking or confirmation as required by regulatory authorities in relation to compliance with regulatory requirements.

d) Review and approve necessary disclosures concerning the activities and operations of the Company as directed by the relevant authorities.

e) Promote together with the Senior Management, the practice high level integrity and ethics which include the setting of tone from the top leadership by example and cultivate a transport culture towards anti-bribery and corruption, to effectively managed the corruption risks in BHB and to ensure the Group fully comply with the laws and regulations on anti-corruption.

Human Resource a) Review and approve the appointment, renewal and removal, the remuneration

and promotion as well as succession plans of the Board of Directors, Shariah Supervisory Council (“SSC”) members and key senior management personnel holding the function of the Group Managing Director/Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Risk Officer and such other function as determined by the Board of Directors from time to time.

b) Approve the appointment, and terms and conditions of service of Senior Vice Presidents and above within the Company.

c) Approve changes to the organization structure of the Company. d) Review and approve the succession planning, including appointing, training,

fixing the compensation of and where appropriate replacement of key senior management.

e) Approve the quantum and basis of bonus payments to the Management and staff of the Company.

f) Approve policies pertaining to staff salary and benefits. g) Review and approve Human Resource policy including but not limited to salary

and remuneration scheme, code of conduct, code of ethics, whistle blowing procedures and disciplinary action procedures.

h) Review and approve any policies related to directors including Directors Remuneration policy, Tenure of Directorship and Directors Training.

i) Annually review the performance of individual directors, SSC members and key senior management personnel including the Group Managing Director/Chief Executive Officer and effectiveness of the Board and the SSC as a whole.

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Internal Audit Function a) Subject to the recommendation by the Audit and Examination Committee, to

approve or terminate the appointment of Chief Internal Auditor. The Chief Internal Auditor shall report directly to the Audit and Examination Committee.

b) Determine on the outsourcing of internal audit functions of BHB, where necessary.

Board Membership and Board Committees a) Approve the appointment and re-appointment of the Directors of the Company

(subject to the Company’s Constitution and Bank Negara Malaysia’s approval). b) Approve Directors’ emoluments and benefits for the Non-Executive Directors of

the Company. c) Appoint committees of the Board and to delegate any of its powers to such

committees as they shall from time to time deemed fit, within clearly defined terms of reference.

d) Review key executives and the Board’s remuneration and ensuring a formal and transparent.

e) Determine on the outsourcing of Shariah advisory functions in BHB and/or its Group to relevant SSC as may be approved by the Board.

Corporate Governance Oversee the implementation of the Company’s governance framework and internal control framework, and periodically review whether this remain appropriate in like of material changes to the size, nature and complexity of the Company’s operations. Shariah Governance (a) Review and approve the Company’s Shariah governance policy. (b) Review and approve all policies relating to Shariah in relation to the Company’s

business and operations upon consultation with the SSC. (c) Review and approve rectifications on any Shariah non-compliance event.

Board Committees The Board established the following three (3) committees to assist in carrying out its duties: (i) Board Audit and Examination Committee; (ii) Board Risk Committee; and (iii) Board Nomination and Remuneration Committee. The Board Committees are authorised by the Board to deal with and to deliberate on specific matters delegated to them within the authority stipulated in their respective Terms of Reference (“TOR”). The Board remains fully accountable for any authority delegated to the Board Committees. The Board sets the strategic directions of the Company, exercises oversight and sets the tone from the top leadership to support good governance and ethical practices in compliance with the laws and regulations.

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Management The Board delegated the day-to-day operations, compliance and governance of the Company to the Chief Executive Officer and the Senior Management. The Board has oversight over the Management and proper conduct of the business and affairs of the Company, with responsibilities to review overall strategies, business, performance and policies of BHB. Others The Board shall also have the authority to review and approve such other matters as determined by the Board of Directors of the Company, from time to time. Based on the above, the Board activities during the FY 2020 is disclosed under the Corporate Governance Overview Statement in the Integrated Annual Report 2020. To enable the directors to discharge their fiduciary duties properly, the directors may be provided with information, professional or expert advice, opinions, reports or statements including financial statements and other financial data prepared or presented by the Management or any independent professional advisor engaged by the Company. The role and responsibilities of the Board is contained in its Board Charter as well as the TOR which are available on the Company’s website www.bimbholdings.com.

Explanation for departure

Large companies are required to complete the columns below. Non-large companies are encouraged to complete the columns below.

Measure

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http://www.bimbholdings.com/

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Intended Outcome Every company is headed by a board, which assumes responsibility for the company’s leadership and is collectively responsible for meeting the objectives and goals of the company. Practice 1.2 A Chairman of the board who is responsible for instilling good corporate governance practices, leadership

and effectiveness of the board is appointed.

Application Applied


The Board of Directors (the “Board”) is headed by Tan Sri Ambrin Buang, an Independent Non-Executive Director who was appointed as the Chairman on 2 February 2018.Tan Sri Ambrin Buang holds a Degree in Economics from University of Malaya and a Master in International Business from University of South Carolina, USA. Details of Tan Sri Ambrin Buang present and previous working experiences are disclosed in the Profile of Directors section of the Integrated Annual Report 2020. The Chairman provides leadership to the Board and plays an important role in encouraging and inculcating a positive culture within the Board. Before every Board Meeting, the Chairman will oversee the setting of the agenda of Board meetings in consultation with the Chief Executive Officer and the Group Company Secretary to ensure that there is sufficient information and time to address all agenda items. During the Board meeting, apart from chairing the meeting, the Chairman promotes open and frank debates by all Directors. In order to ensure that relevant issues are discussed, the Chairman will lead the agenda for the Board meetings and request for views and input from the members. The Board members come well prepared and engage in robust discussions on key matters pertaining to the Company and Group. The Chairman ensures that a consensus is reached at the Board meeting. Where deemed necessary, the Chairman may call for a vote where a decision can be made by a vote of a simple majority. In the event that a consensus cannot be reached, the Chairman may defer the agenda, and request for additional information or research to be conducted on the subject matter, to enable the Board to make an informed decision. The Chairman, in leading the Board, is responsible for the effective overall functioning of the Board. In fulfilling this role, the Chairman must:- (a) ensure that appropriate procedures are in place to govern the Board’s

operation;

(b) ensure that decisions are taken on a sound and well-informed basis, including by ensuring that all strategic and critical issues are brought to the Board’s attention, and that directors receive the relevant information on a timely basis;

(c) encourage healthy discussion and ensure that dissenting views can be freely

expressed and discussed;

(d) provide leadership to the Board and steer the Board to achieve its objectives; and

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(e) lead efforts to address the Board’s developmental needs. Outside the boardroom, the Chairman act as the major point of contact between the Board and the Chief Executive Officer. During the general meeting, the Chairman acts as the spokesperson for the Board, and main representative of the Company alongside with the Chief Executive Officer to engage with shareholders, where necessary. The Chairman also regularly reviews the progress on important initiatives and significant issues facing the Group. Thus, the Chairman will be kept abreast with the Group initiatives and activities as well as other significant issues. The Chairman’s role and responsibilities has been clearly specified in the Board Charter which is available on the Company’s website www.bimbholdings.com.



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Intended Outcome Every company is headed by a board, which assumes responsibility for the company’s leadership and is collectively responsible for meeting the objectives and goals of the company. Practice 1.3 The positions of Chairman and CEO are held by different individuals.

Application Applied


The roles and responsibilities of the Chairman and the Chief Executive Officer (“CEO”) are distinct and separate. This is to ensure appropriate supervision of the Management, with a clear hierarchical structure. Chairman Tan Sri Ambrin Buang currently helms the Board of Directors as Chairman. He provides leadership and manages the Board in meeting the group’s strategic and corporate objectives as well as strengthening governance of the Company. CEO The position of CEO is held by Encik Mohd Muazzam Mohamed. The CEO has the overall executive responsibility for the day-to-day operations of the Company which includes implementing the policies and strategies adopted by the Board, keeping the Board fully informed of the Company’s operation and ensuring sufficient information is disseminated to the Board members. The CEO also ensures the effective implementation of the Board’s overall strategies, meeting annual targets of the Group and management of external stakeholders. Further information on the roles and responsibilities of the Chairman and the CEO is contained in the Board Charter which is available on the Company’s website www.bimbholdings.com.



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Intended Outcome Every company is headed by a board, which assumes responsibility for the company’s leadership and is collectively responsible for meeting the objectives and goals of the company. Practice 1.4 The board is supported by a suitably qualified and competent Company Secretary to provide sound

governance advice, ensure adherence to rules and procedures, and advocate adoption of corporate

governance best practices.

Application Applied


The Group Company Secretary is responsible in supporting the effective functioning of the Board. In discharging this role, the Group Company Secretary provides counsel to the Board on governance matters and facilitates effective information flows between the Board, the Board Committees and senior management. All directors have direct and unrestricted access to the advice and services of the Group Company Secretary. The Group Company Secretary also responsible to facilitate the induction programme of new directors and the on-going Individual Development Plan in relation to directors’ professional development, The Group Company Secretary of BHB is held by Puan Maria Mat Said (“Puan Maria”) since 2009. Puan Maria has more than 29 years of experience in the Banking industry, mainly performing legal and secretarial functions. Puan Maria is responsible for advising the Board on issues relating to relevant laws, rules, procedures and regulations affecting the Board, as well as best governance practices. She is also responsible for advising the Directors on their obligations and duties and facilitates effective dissemination of information to the Board, the Board Committees and the Management. Apart from assisting the Chairman in preparing the agenda and the meetings, the Group Company Secretary also undertakes amongst others, the following roles: Company

• Facilitating the highest standard of governance practices among BHB entities and identifying areas for enhancements;

• Ensuring that BHB complies with statutory obligations under the relevant laws and regulations;

• Monitoring and ensuring BHB’s governance framework complies with the Islamic Financial Services Act 2013, the MCCG 2017, BNM CG Policy, Bursa Securities Listing Requirements, Companies Act 2016, Capital Market and Services Act 2007 and all others relevant laws and regulations;

• Maintaining the safe keeping of statutory records of the Company in compliance with applicable laws and regulations;

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Board • Managing matters relating to the Board and Board Committees meeting; • Managing the logistics of the Board offsite and strategy session with key

operating subsidiaries and Senior Management; • Ensuring procedures for the appointment and re-appointment of Directors are

adhered to; • Organising induction programmes for new Director; • Organising and assisting in Directors’ training during the year; • Updating the Board of Directors on any development and changes in relevant

laws, regulations and the impact on BHB’s business operation; • Assisting Directors and Management in executing various corporate proposals

by ensuring Board decisions and instructions are properly communicated and carried out;

• Acting as the point of contact to source for information and to assist the Board in its decision-making;

• Attending all meetings and ensuring all discussions/ deliberations during meetings are accurately recorded and properly maintained;

Communication

• Assisting in managing Shareholders’ communication and resolving their queries;

• Organising Shareholders’ meetings i.e., AGM and EGM as well as preparing all relevant documents required for the meetings;

• Being the main contact person for communication and engagement on corporate governance issue with the regulators, the Board, the Senior Management and the stakeholders; and

• Ensuring that all request and instruction from the regulators are properly conveyed to the Board and the Senior Management with appropriate advice.

The Group Company Secretary performs an oversight role in ensuring uniformity in conduct and adoption of best governance practices within BHB and its Group. The Group Company Secretary also serves as an adviser on matters pertaining to governance and facilitates the flow and sharing of information among the Board and Board Committees. For the year under review, the Group Company Secretary undertook the following: • Reviewed the Remuneration and Benefits for the Directors; • Proposed Revised Voting Policy of BHB and its Subsidiaries;

• Reviewed the Board Charter and Terms of Reference of the Board and Board Committees;

• Proposed the nomination for appointment of a Principal Officer/Nominee Director as the Subsidiaries;

• Proposed re-appointment of directors of BHB; • Participated and reviewed on the production of the Integrated Annual Report;

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• Conducted Board evaluation and effectiveness assessment; • Updated the Board on monthly basis the Status of Compliance of BHB with

regulatory requirements namely Bursa Securities Listing Requirements, Islamic Financial Services Act 2013, BNM’s Guidelines, Companies Act 2016 and Capital Market and Services Act 2007;

• Conducted monthly assessment on the Board members’ number of directorship

and external professional commitment in order to ensure that a director must not have competing time commitments that may impair his/her ability to discharge his/her duties effectively;

• Conducted monthly assessment on the status of independence of Independent

Director; • Issued notices on quarterly basis to refrain the Board of Directors from dealing in

the Company’s listed securities based on the targeted date of announcement of the quarterly financial results;

• Established directors’ training policy namely Individual Development Plan (“IDP”) effective year 2020. The IDP consist of a minimum of three (3) trainings on technical knowledge and one (1) training on leadership/ soft skill; and

• Organized a Directors’ Conference 2020, specifically designed to improve the

effectiveness of the boards against established standards of good practice, for all Directors within the Group.

All Directors have direct and unlimited access to the advice and services of the Group Company Secretary. The Board is satisfied with the performance and support rendered by the Group Company Secretary.



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Intended Outcome Every company is headed by a board, which assumes responsibility for the company’s leadership and is collectively responsible for meeting the objectives and goals of the company. Practice 1.5 Directors receive meeting materials, which are complete and accurate within a reasonable period prior to

the meeting. Upon conclusion of the meeting, the minutes are circulated in a timely manner.

Application Applied


The Board of Directors has full and unrestricted access to all information pertaining to BHB’s affairs including, inter alia, the Group’s financial results, annual budgets, reviews against business plans and progress reports on corporate developments to enable them to discharge their duties effectively. Schedule Meeting, Notice and Agenda To assist the Board in managing their time schedule, the meeting calendar for the year is prepared and circulated in advance. Once confirmed, the notice of the meeting will be emailed to the Directors and Senior Management at least fourteen (14) days before the meeting. The Agenda and Board meeting papers are disseminated to the Directors, electronically and in hard copies, at least five (5) days prior to the Board meeting to allow sufficient time for the Directors to study and review the issues and, where necessary, to obtain further information and explanation to facilitate an informed decision. At the Board meeting, the Directors deliberate at length on the agenda prior to making decisions. The Management and the external advisers may be invited to attend the Board meetings when necessary, to furnish the Board with explanations on items tabled or to provide clarification on issue(s) that may be raised by any Director(s). Minutes The deliberations and resolutions passed by the Board are recorded properly including matters which involve the interest of interested Director. Minutes of the meeting must also indicate whether any director abstained from voting or deliberating on particular matter and are confirmed at the next Board Meeting. The Group Company Secretary ensures that clear and accurate minutes of Board Meetings which include the key deliberations, rationale for each decision made and any significant concerns or disagreement are maintained. The draft minutes are then tabled at the following Board Meeting for confirmation and thereafter signed by the Chairman and filed within ten (10) days. Action Item The deliberations and decisions made during the meeting are escalated to the Management within seven (7) days after the meeting. The Group Company Secretary also communicates and follows up with the relevant division responsible for any outstanding matters arising from previous meeting and update the Board accordingly.

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Intended Outcome There is demarcation of responsibilities between the board, board committees and management. There is clarity in the authority of the board, its committees and individual directors. Practice 2.1 The board has a board charter which is periodically reviewed and published on the company’s website. The board charter clearly identifies:- ▪ the respective roles and responsibilities of the board, board committees, individual directors and

management; and

▪ issues and decisions reserved for the board.

Application Applied


In January 2017, the Board approved the Board Charter to comply with the Bank Negara Malaysia’s Corporate Governance Policy. The Board Charter sets out the key corporate governance principals adopted by the Company. The Board Charter are required to be reviewed once in every two (2) years. The Board had approved the revised Board Charter on 11 December 2020. It defines the roles and responsibilities of the Board, Board Committees, Chairperson, Senior Independent Non-Executive Director and Chief Executive Officer (“CEO”) in the areas of strategies setting, management of company, succession planning, risk management, integrity of internal controls and communication plan. The Board Charter serves as a focal reference on governance and provides guidance to the Board in the assessment of its performance. The Board Charter contains broad principles and requirements on the Board’s governance in accordance with the principles of good corporate governance as set out in the recommendation and guidelines issued by the relevant regulatory authorities. The Board Charter addresses the following:

Conduct • Code of Conduct

• Conflict of Interest

• Shareholders Communication

• Dealings in Securities

• Whistle Blowing

Duties & Responsibilities

• Fiduciary Duties

• Roles & Responsibilities of the Board, Board Committees, Chairman, Independent Director, Nominee Director, CEO & Management and Company Secretary o Promote Shariah Compliance in accordance with the

expectations set out in the Shariah Governance Policy and ensure its integration with the Company’s business and risk strategies (new addition)

o Promote together with the Senior Management, the practice high level of integrity and ethics which

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include the setting of tone from the top effectively manage the corruption risk in BHB and to ensure BHB fully comply with the laws and regulations on anti-corruption (new addition)

Powers • Authority & delegation

• Matters Reserved for the Board

Effectiveness • Board Composition

• Appointment/ Removal/ Succession Planning o The candidate must not have an adverse record in

Lexis/Nexis screening (new addition)

• Director’s Training o Directors will be required to complete their IDP which

consist of minimum of three (3) trainings on technical knowledge and (1) training in leadership/ soft skill. (new addition)

• Director’s Evaluation

• Director’s Remuneration

In addition to the Board Charter, the Board is also guided by its Terms of Reference (“TOR”), a document which specifies the Board’s role, power, duties and functions. The Board Charter and the TOR are dynamic documents that are reviewed and updated from time to time to reflect relevant changes to policies, procedures and processes as well as amendments to rules and regulations. The TOR and Board Charter are subject to review once every two (2) years, or when there are material changes to the governance structure, processes or procedures. The Board had on 5 December 2018 and subsequently on 11 December 2020 reviewed and approved the revised Board Charter as well as the TOR. The TOR and Board Charter are available on the Company’s website at www.bimbholdings.com.



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Intended Outcome The board is committed to promoting good business conduct and maintaining a healthy corporate culture that engenders integrity, transparency and fairness. The board, management, employees and other stakeholders are clear on what is considered acceptable behaviour and practice in the company. Practice 3.1 The board establishes a Code of Conduct and Ethics for the company, and together with management implements its policies and procedures, which include managing conflicts of interest, preventing the abuse of power, corruption, insider trading and money laundering. The Code of Conduct and Ethics is published on the company’s website.

Application Applied


Board Code of Conduct and Ethics The principal of the Board Code of Conduct and Ethics (“Code”) is based on principles in relation to sincerity, integrity, responsibility and corporate social responsibility. The Code is formulated to enhance the standard of corporate governance and corporate behaviour with the intention of achieving the following aims:- • To establish a standard of ethical behaviour for directors based on trustworthiness

and values that can be accepted, are held or upheld by any one person. • To uphold the spirit of responsibility and social responsibility in line with the

legislation, regulations and guidelines for administration of BHB Group. BHB adopts the Code in accordance with the following:

• BNM Corporate Governance Policy and BNM GP7- Part 1 Code of Ethics: Guidelines on the Code of Conduct for Directors, Officers, and Employees in the Banking Industry;

• Company Directors’ Code of Ethics established by the Companies Commission of Malaysia; and

• Code of Ethics for the Financial Services Industry issued by Financial Services Professional Board.

The Code provides guidance for proper standards of conduct with sound and prudent business practices as well as standards of ethical behaviour for the Board, based on the principles of integrity, responsibility, sincerity and corporate social responsibility. The Code encompasses three (3) major areas, namely:

• Corporate Governance; • Relationship with shareholders, employees, creditors and customers; and • Social responsibility and the environment.

Based on the aforesaid, BHB’s Directors are required to discharge their duties and deal with various stakeholders with utmost integrity. This is in line with the Company’s core values which place emphasis on ethical dealings with third parties and employees.

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Code of Ethics (“COE”) BHB’s COE was introduced on 4 June 2014 to ensure all BHB employees meet with the required standards of integrity, professionalism and ethical behaviour and to safeguard BHB’s reputation as a responsible Financial Holding Company and a good corporate citizen. The COE outlines how BHB employees should act with stakeholders. The COE also provides the basis for all employees to adhere to a working environment that is productive, positive, enjoyable, safe and free from harassment and discrimination. Each section of the COE covers an area in which employees have responsibilities to BHB, as follows:

• Personal conduct and protection of BHB’s assets; • Obligations in conducting BHB’s business with other people and organization

thus preventing the abuse of power; and • Conflict of interest, insider trading, bribery & corruption and other

considerations affecting BHB. Conflict of Interest Pursuant to BNM CG Policy, the Listing Requirement and the Companies Act 2016, the Directors are required to declare their interest, including whether such interest arises through close family members. The Board is attentive to the possibility of potential conflict of interest situations involving the Directors and the Company and affirms its commitment to ensure that such situation of conflict is avoided. The Board Charter states that in the event where there may be a conflict of interest, the interested Director shall declare at the beginning of the Board meeting the facts and nature of the conflict and to abstain from participating in discussions and decisions on the matters which directly involved the said Director. In circumstances where a Director is unsure as to whether or not a conflict of interest exists or is material, he/she would discuss the matter with the Chairman prior to the meeting. Where a conflict of interest exists and the Director does not declare his or her interest and/or offer to withdraw, the Chairman should, if he is aware, take appropriate action to highlight the conflict. In the event of any non-compliance with any requirement on conflict of interest, the Board may or impose such actions as it considers appropriate in the best interest of the Company. Anti-Bribery and Corruption Policy The Board had on 5 December 2019 approved the Anti-Bribery and Corruption Policy (“ABCP”). The ABCP sets out BHB’s zero tolerance approach against all forms of bribery, corruption and any other non-regulatory compliance related risks. The ABCP emphasised the following:- (a) All employees, business associates and individuals acting on behalf of BHB

should be responsible for maintaining the Company’s reputation by conducting the business honestly and ethically as well as observing the Company’s shared value, “Act with Integrity”.

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(b) BHB will not tolerate bribery, kick-backs and corruption directly or in-directly through third parties, whether or not explicitly prohibited by this ABCP or by laws. BHB’s employees are not permitted to give or offer anything of value including gift, hospitality, or entertainment except otherwise govern by this ABCP to anyone for the purpose of improperly obtaining or retaining a business or personal advantage.

The types of bribery and corruption as stipulated in the ABCP are (i) Conflict of Interest; (ii) Gift, entertainment and hospitality; (iii) Sponsorships and donations; (iv) Political contribution; (v) Facilitation payments; and (vi) Money laundering. The Board Charter in relation to the conduct of the Board, the Board Code of Conduct and Ethics, the Employee Code of Ethics as well as the Anti-Bribery and Corruption Policy are available on the Company’s website www.bimbholdings.com.



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Intended Outcome The board is committed to promoting good business conduct and maintaining a healthy corporate culture that engenders integrity, transparency and fairness. The board, management, employees and other stakeholders are clear on what is considered acceptable behaviour and practice in the company. Practice 3.2 The board establishes, reviews and together with management implements policies and procedures on

whistleblowing.

Application Applied


Whistle-Blowing Policy BHB is committed to the values of transparency, integrity, impartiality and accountability in the conduct of its business and affairs. Wrongdoing such as fraud, corruption, financial impropriety and gross mismanagement should be reported and dealt with in accordance with the Company’s established due process. BHB promotes an open communication and transparent work culture by setting up internal procedures to address concerns regarding any likely wrongdoing. The policy complements the normal channels of communication and reporting lines within BHB. It also provides an alternative route for employees to raise concerns if the usual lines of communication are not available when the complaint relates to his or her immediate supervisor or head of department. BHB encourages its employees to aspire to the highest possible standards of compliance and ethics. Whistle-blowing policies have therefore been integrated into BHB’s practices and culture to help to deter fraud, corruption and mismanagement. Through the effective implementation of this policy, BHB is able to preserve its integrity and transparency. The purposes and objectives of the Policy are as follows:- (ii) To facilitate the process of disclosure as early as possible and in a responsible

manner by putting into place of an internal procedures; (iii) To address a disclosure in an appropriate and timely manner. When disclosure

matters are addressed, they may be prioritised according to the nature or gravity of the alleged Wrongdoings or reported risks and the magnitude of their repercussions;

(iv) To protect a Whistleblower and the alleged wrongdoer from reprisal as a direct consequence of making a disclosure and to safeguard such person’s confidentiality; and

(v) To treat both the Whistleblower and the alleged wrongdoer fairly. The Whistleblower will be informed of the status of his/her disclosure. The alleged wrongdoer will be informed of the allegations (though not necessarily at the beginning of the investigation) and given an opportunity to answer the allegations. The identity and personal information of the Whistleblower and the alleged wrongdoer will be disclosed to the individuals involved in the investigations or any other processes on a “need to know” basis.

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In general, all disclosures pursuant to the Whistle-Blowing Policy are to be made to the CEO or to an officer designated by CEO from time to time. The CEO is responsible for ensuring compliance with this Policy and will prepare a report for the Board. The Board will be apprised of disclosure matters which are serious in nature or have grave repercussions. This Policy may be reviewed and amended from time to time, as and when necessary, to ensure its relevance and effectiveness in keeping with BHB's changing business environment or administrative or operational needs. BHB had designated and published the electronic mail address of Puan Noraini Che Dan, Senior Independent Non-Executive Director, as an avenue for external parties to channel any concern or wrongdoing in the Group. Puan Noraini Che Dan can be reached at [email protected]. During the year under review, the Group have received a total of two (2) cases of whistle-blowing. The Whistle-Blowing Policy is available on the Company’s website www.bimbholdings.com.



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mailto:[email protected]


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Intended Outcome

Board decisions are made objectively in the best interests of the company taking into account diverse

perspectives and insights.

Practice 4.1 At least half of the board comprises independent directors. For Large Companies, the board comprises

a majority independent directors.

Application Applied


The Board is made up of the following Directors:

Name Designation

Tan Sri Ambrin Buang Chairman Independent Non-Executive Director

Puan Noraini Che Dan Senior Independent Non-Executive Director

Encik Mohd Tarmidzi Ahmad Nordin

Independent Non-Executive Director

Datuk Nik Mohd Hasyudeen Yusoff

Non-Independent Executive Director

Encik Zahari @ Mohd Zin Idris

Non-Independent Non-Executive Director

For the year under review i.e., 1 January 2020 to 31 December 2020, the Board of BHB consists of three (3) Independent Non-Executive Directors, one (1) Non-Independent Executive Director and one (1) Non-Independent Non-Executive Director. Majority are Independent Non-Executive Directors of which one (1) is a woman Senior Independent Non-Executive Director. This complies with the requirement of majority independent Directors under the Listing Requirements and BNM CG Policy. Current composition of BHB directors remain unchanged. To ensure that Independent Directors are always able to exercise independent judgement in the best interest of the Company and are free from any conflict of interest. All Independent Non-Executive Directors are required to declare their independence on a monthly basis. in addition, all Independent Directors complied with the independent criteria prescribed under the Bursa Securities Listing Requirements. During the year under review, the Company had conducted an annual Board evaluation that also covers the assessment on the independence of Independent Directors. Based on the evaluation result all three (3) Independent Directors were rated 4.00 out of 5.00 on the following:-

23

(a) Ability to discharge his/her duties effectively by providing independent views; (b) Facilitate open and interactive discussion of issue; (c) Participate in rigorous decision making; and (d) Make quality contribution to Board discussion. Within the Board there is diversity and a wealth of knowledge, experience and skills in the area of accountancy, banking, takaful, public administration and fund management, human resources management, corporate finance and risk management. A brief profile of each member of the Board is provided on pages 36 to 40 of the Integrated Annual Report 2020. The Board of BHB shall comprise a majority of Independent Directors at all times and this is stipulated in the Board Charter. The Board Charter is available on the Company’s website www.bimbholdings.com.



Measure

Timeframe


24

Intended Outcome Board decisions are made objectively in the best interests of the company taking into account diverse perspectives and insights. Practice 4.2 The tenure of an independent director does not exceed a cumulative term limit of nine years. Upon completion of the nine years, an independent director may continue to serve on the board as a non-independent director. If the board intends to retain an independent director beyond nine years, it should justify and seek annual

shareholders’ approval. If the board continues to retain the independent director after the twelfth year,

the board should seek annual shareholders’ approval through a two-tier voting process.

Application Not applicable – Step-up 4.3 adopted




Measure

Timeframe

25

Intended Outcome Board decisions are made objectively in the best interests of the company taking into account diverse perspectives and insights. Practice 4.3 - Step Up The board has a policy which limits the tenure of its independent directors to nine years.

Application Applied


The Company has a policy that limits an Independent Director’s tenure to a maximum of nine (9) years. An independent Director who has served for nine (9) years may, subject to the shareholders’ and BNM’s approval, continue to serve the Company as an independent Director. In any event, no Independent Director will continue to serve the Board for more than 12 years. For the year under review, none of the Independent Directors had exceeded the nine (9) years tenure. The tenure of Independent Directors are as follows:-

Year of Services No of Independent Directors

Less than 4 years 1

4 years – 6 years 2

7 years – 9 years -

The policy which limits the tenure of BHB’s Independent Director is provided in paragraph 5.2.3 of the Board Charter, which is available at the Company’s website www.bimbholdings.com



Measure

Timeframe


26

Intended Outcome Board decisions are made objectively in the best interests of the company taking into account diverse perspectives and insights. Practice 4.4 Appointment of board and senior management are based on objective criteria, merit and with due regard

for diversity in skills, experience, age, cultural background and gender.

Application Applied


The Board has implemented a formal and transparent process for the nomination and

appointment of new directors and management, via the Board Nomination and

Remuneration Committee (“BNRC”).

The BNRC plays a vital role in ensuring the balance in the composition and diversity

of the Board is achieved. The BNRC supports the Board in ensuring the Board

composition consists of diverse individual with the requisite skill, experience, age and

gender to offer greater depth and breadth to the Board.

For the year under review, the Board comprise of the following skills and expertise:

Knowledge and expertise Percentage %

No. of Directors

Banking 60% 3

Takaful 20% 1

Stock Broking & Fund Management 40% 2

Accounting & Audit 80% 4

Management, Leadership & Strategy 100% 5

Governance & Integrity 100% 5

Risk Management 60% 3

Public Policy & Regulatory 80% 4

For the year under review, the BNRC was chaired by Puan Noraini Che Dan (Senior

Independent Non-Executive Director), oversees the remuneration, succession

planning and composition of the Board and Management. The BNRC comprises of

three (3) members of which all are Independent Directors.

There is a formal and transparent process for the appointment of a Director. The BNRC, which has been delegated by the Board to oversee the process, will consider all proposals for the appointment of new Directors. The procedure is in line with the Company’s Fit and Proper Criteria as indicated in the Board Charter. The BNRC is guided by the following qualitative and quantitative criteria when assessing the suitability of director for nomination:-

• Probity, personal integrity and reputation that can be demonstrated through personal qualities such as honesty, integrity, diligence, independence of mind and fairness;

27

• Competency and capability demonstrated by a person who possesses the relevant knowledge, experience and ability to understand the technical requirements of the business;

• Financial integrity demonstrated by a person who manages his own financial affairs properly and prudently;

• Appropriate size and balance between Independent Directors, Non-Independent and Executive Directors; and

• Restriction on external professional commitment. In determining if an individual is ‘fit and proper’ to hold the position of a Director, the following shall be taken into consideration:

• His/her probity, diligence, competence and soundness of judgment;

• His/her reputation, character, integrity (including financial integrity) and honesty;

• His/her history of offence(s) involving fraud/dishonesty/violence;

• Whether he/she has been engaged in deceitful/oppressive/improper business practices or any practices which would discredit him/ her;

• Whether he/she has been engaged/associated/had conducted himself/herself in a manner which may cast doubt on his/her fitness, competence and soundness of judgment;

• Whether he/she has contravened any provision made by or under any written law designed for protecting members of the public against financial loss due to dishonesty, incompetence or malpractice; and

• Whether he/she has been declared a bankrupt.

• Whether he/she has adverse record in Lexis Nexis screening i.e., adverse news in relation to AMLA, bribery and corruption, criminal and etc.

• Upon the Board’s concurrence, an application for the appointment of a director would be submitted to BNM for its approval. The selection criteria and process for the appointments of Directors to the Board are detailed in the Board Charter available at www.bimbholdings.com.

The process flow for the appointment of a new Director is as follows: • Identification of candidates • Evaluation of suitability on Fit and Proper • Interview session by BNRC • Deliberation by BNRC and recommendation to the Board • Board Approval The roles and responsibilities of the specified in the BNRC’s Terms of Reference and Board Charter which are available at the Company website www.bimbholdings.com



Measure

Timeframe



28

Intended Outcome Board decisions are made objectively in the best interests of the company taking into account diverse perspectives and insights. Practice 4.5 The board discloses in its annual report the company’s policies on gender diversity, its targets and

measures to meet those targets. For Large Companies, the board must have at least 30% women

directors.

Application Departure



The Board currently comprises five (5) Directors, of whom one is a woman, or 20% female representation.

The Board Nomination and Remuneration Committee (“BNRC”) oversees the overall composition of the Boards and Board Committees in terms of appropriate size, skills, gender diversity and the balance between Executive Directors, Non-Executive Directors and Independent Directors through annual reviews. The BNRC is guided by the following qualitative and quantitative criteria when assessing the suitability of director for nomination:-

• Probity, personal integrity and reputation that can be demonstrated through personal qualities such as honesty, integrity, diligence, independence of mind and fairness;

• Competency and capability demonstrated by a person who possesses the relevant knowledge, experience and ability to understand the technical requirements of the business;

• Financial integrity demonstrated by a person who manages his own financial affairs properly and prudently;

• Appropriate size and balance between Independent Directors, Non-Independent and Executive Directors; and

• Restriction on external professional commitment. The Board is mindful of appointing Directors who have diverse skills, experience, age and gender, and remains committed to achieving at least 30% female representation on the Board whilst ensuring that overall diversity remains a central feature.


Measure The Company is taking the necessary steps to have at least 30% women directors required for large companies.

Timeframe Within the next one (1) year.

29

Intended Outcome Board decisions are made objectively in the best interests of the company taking into account diverse perspectives and insights. Practice 4.6 In identifying candidates for appointment of directors, the board does not solely rely on recommendations

from existing board members, management or major shareholders. The board utilises independent

sources to identify suitably qualified candidates.

Application Applied


The Board Nomination and Remuneration Committee (“BNRC”) has access to a wide pool of candidates through the recommendation by existing Board members or Management, and external sources such as the Directors’ Register by FIDE FORUM, Bank Negara Malaysia, Perbadanan Insurans Deposit Malaysia and independent search firms. The BNRC is able to identify the most suitably qualified candidates for appointment of Directors by having a range of multiple sources. Furthermore, the Company had in year 2020 started to establish a pool of potential candidates to be considered as the Directors of the Company. The database of potential candidates is collected from various independent sources including FIDE FORUM, key operating subsidiaries and internal sources. The roles and responsibilities of the BNRC is specified in the BNRC’s Terms of Reference which is available at the Company website www.bimbholdings.com



Measure

Timeframe


30

Intended Outcome Board decisions are made objectively in the best interests of the company taking into account diverse perspectives and insights. Practice 4.7 The Nominating Committee is chaired by an Independent Director or the Senior Independent Director.

Application Applied


During the year under review, the BNRC is chaired by Puan Noraini Che Dan, the Senior Independent Non-Executive Director. The BNRC consists of three (3) members whereby majority of the members are Independent Non-Executive Directors. The current composition of BNRC complies with the BNM CG requirement and Main Market Listing Requirements. The responsibilities of the BNRC’s Chairman include the following:-

• Consults the Chairman of the Board on the prospect of new candidates being appointed on the Board;

• Leads interviews with potential candidates that may be appointed on the Board in accordance with the fit and proper;

• Leads the succession planning for the Group taking into accounts tenure of existing members, effectiveness and well-functioning members as well as the skill gaps.

The role of the Senior Independent Non-Executive Director are as follows: - • Providing a sounding board for the Chairman; • An intermediary for other Directors when necessary and specifically serves as

the principal conduit between the Independent Non-Executive Directors and Chairman on sensitive issues;

• Promote high standards of corporate governance and ensure that the Company’s obligations to shareholders are understood and complied with;

• Ensure the composition of the Board in regards to the number of Independent Directors is in adherence to relevant requirements and regulations;

• Being available for confidential discussions with other Non-Executive Directors who may have concerns which they believe have not been properly considered by the Board as a whole; and

• Being available to shareholders if they have any concerns which are unable to be resolved through the normal channels of Chairman, Chief Executive Officer and Group Chief Financial Officer, or if contact through these channels are deemed inappropriate.

If necessary, the Senior Independent Non-Executive Director can be emailed at [email protected]



Measure

Timeframe

31

Intended Outcome Stakeholders are able to form an opinion on the overall effectiveness of the board and individual directors. Practice 5.1 The board should undertake a formal and objective annual evaluation to determine the effectiveness of the board, its committees and each individual director. The board should disclose how the assessment was carried out and its outcome. For Large Companies, the board engages independent experts periodically to facilitate objective and

candid board evaluations.

Application Applied


Through a Board and Peer Annual Assessment (“Board Evaluation”) conducted on an annual basis, the BNRC undertakes a formal and transparent process to assess the effectiveness of individual Directors, Board Committees and the Board as a whole. Generally, the evaluation comprised of two (2) parts namely: (I) Board Evaluation to assess the effectiveness of the Board as a whole; and (II) Peers Evaluation to assess the effectiveness of the individual directors. The factors considered, amongst others, include the following:

Board Evaluation

Board • Board Structure;

• Board Meeting;

• Board Papers;

• Board Communication;

• Board Roles and Responsibilities; and

• Board Committees Functions

Peers Evaluation

Peers/ Individual Director

• Contribution to Interaction;

• Quality of input;

• Understanding of Role;

• Nominee Director’s Role;

• Independent Director’s Role;

• Chairman of the Board Committee’s Role; and

• Member of the Board Committee’s Role.

Where necessary, an external consultant/expert will be engaged to assist in and lend objectivity to the annual assessment. Compared with the previous years, several enhancements have been made to the FY2020 Board Evaluation exercise such as the implementation of e-Evaluation though an online platform, wider scope of assessment to include the evaluation on the effectiveness of the Chairman and Members of the Board Committees as well as the improvement in some of the questionnaires for clarity purposes.

32

Upon completion of the evaluation, the results are compiled by the Group Company Secretary for the BNRC deliberation and recommendation to the Board for approval of any action plan required. The Chairman will engage and discuss the peer assessment results with individual members if necessary. For the year under review, the results showed that the members were generally satisfied with the conduct of the board committee meetings. The Board and Peers’ Evaluation results showed the following:-

Part 1 - Board Evaluation

No Evaluation Criteria Average Score

1. Board Structure 4.2

2. Board Meeting 4.3

3. Board Papers 4.2

4. Board Communications 4.6

5. Board Roles and Responsibilities 4.3

6. Board Committee Function

a) Board Risk Committee 4.4

b) Board Audit & Examination Committee 4.3

c) Board Risk Committee 4.3 *No. of Respondent – 5

Part 2 - Peers’ Evaluation

Evaluation Criteria Remark

1 Contribution to Interaction

All directors were rated 4.0 and above. 2 Quality of Input

3 Understanding of Role

4 Nominee Director’s Role One (1) Nominee Director was rated

4.8 for this area.

5 Independent Directors’ Role Three (3) Independent Directors were

rated above 4.0 for this area.

6 Chairman of the Board’s Role The Chairman of the Board was rated

4.7 under this criteria.

7 Chairman of the Board Committee’s

Role

Two (2) Directors who performed the

function as the Chairman of the Board

Committee were rated above 4.0 of

which:

• One (1) Chairman of the Board Committees were rated 4.4; and

• One (1) Chairman of the Board Committees were rated 4.6.

8 Member of the Board Committee’s Role All three (3) Directors who performed

the function as the member of the

Board Committees were rated

between 4.0 and above for this area.

33

The lowest rating was 4.3 and the

highest rating was 4.5.

*No. of Respondents – 5

Based on the above, it was observed that five (5) or 100% of the Board members were rated 4.0 and above in all areas of assessment. In addition, the total average score for each individual director is above 4.0, i.e., between 4.3 to 4.5. Attendance Throughout FY 2020 Below

Minimum Requirement by BNM CG

of 75%

Above Minimum

Requirement by BNM CG

of 75%

Remarks

Board of Directors

Nil

5 (full

compliance)

• 100 % attendance

• 92% attendance

- 4 or 80% of the Board members

- 1 or 20% of the Board members

Board Audit and Examination Committee

Nil 3 (full

compliance)


• 86% attendance

- 2 or 67% of the Committee members


Board Nomination and Remuneration Committee

Nil 3 (full

compliance)


• 80% attendance



Board Risk Committee

Nil 3 (full

compliance)


• 83% attendance



Having considered the results of the annual evaluation for the year under review, the BNRC concluded that the Directors and respective Board Committees as a whole have remained effective and have consistently met high performance standards and all expectations. This indicates that the Directors have continuously fulfilled their responsibilities as Members of the Board and Board Committees.

34



Measure

Timeframe

35

Intended Outcome The level and composition of remuneration of directors and senior management take into account the company’s desire to attract and retain the right talent in the board and senior management to drive the company’s long-term objectives. Remuneration policies and decisions are made through a transparent and independent process. Practice 6.1 The board has in place policies and procedures to determine the remuneration of directors and senior

management, which takes into account the demands, complexities and performance of the company as

well as skills and experience required. The policies and procedures are periodically reviewed and made

available on the company’s website.

Application Applied


The director’s remuneration framework was developed taking into account FIDE Director’s Remuneration Report 2015 (FIDE Report) and BNM CG Policy on Remuneration. The six (6) factors considered in the setting of Non-Executive Directors remuneration to ensure there was equitable remuneration for role, effort and risk highlighted in the FIDE Report were as follows:- a) The number of meetings attended as an indicator of a Non-Executive Director’s

contributions;

b) A meeting fee rate based on a comparable rate that the market pays for a talent

with similar caliber and expected contributions;

c) The fixed fee (retainer fee) and the meeting fee (sitting fee) component are

determine in such manner that the Non-Executive Directors were better

recognised for their preparation and contributions at meetings including meetings

with BNM. Fixed fee would be determined by taking into account the Non-

Executive Director’s expected time spent on Board’s education, networking and

engagement with stakeholders;

d) Rate for all meeting fees are standardized for all Board and Board Committee

meetings to recognize the value of each member’s contributions;

e) The Chairman of the Board and the Board Committees are remunerated at a

premium given the additional role that they play in guiding and managing the

Board and the Board Committees; and

f) The remuneration is paid on a timely and periodic basis.

The Directors of BHB are remunerated as follows: - (a) Fees and Other Emoluments

Non-Executive Directors are remunerated by way of monthly fees, a sitting allowance and other emoluments. Fees payable to Non-Executive Directors are subject to Shareholders’ approval at the Annual General Meeting.

36

(b) Benefits in Kind

Other benefits such as Directors’ Health and Medical Benefit together with Directors’ and Officers’ (“D&O”) liability insurance and travelling allowance are also provided.

The remuneration of the Directors is reviewed once every three (3) years to ensure the Directors are reasonably remunerated to reflect their role, responsibilities and efforts in discharging their fiduciary duties. The Board had on 31 January 2020, reviewed the Directors remuneration. The assessment on the reasonableness of the Directors remuneration was performed based on comparison with peers in the market. During the review, results of the peer comparison showed that the average remuneration paid to BHB’s Non-Executive Directors (“NEDs”) are competitive among the FHC. Based on the assessment, the Board concurred that the existing Directors remuneration framework as approved by the Shareholders at its 23rd Annual General Meeting on 26 August 2020 to remain unchanged. The Directors remuneration framework are as follows:

BNRC REMUNERATION FRAMEWORK

BIMB Holdings Berhad

Retainer Fees (per annum)

RM

Chairperson’s Premium

(per annum) RM

Meeting fees (per meeting)

RM

Board Chairman 48,000 72,000 5,000

Member 48,000 n/a 3,000

BAEC Chairman 24,000 12,000 5,000

Member 24,000 n/a 3,000

BRC Chairman 24,000 12,000 5,000

Member 24,000 n/a 3,000

BNRC Chairman 12,000 12,000 5,000

Member 12,000 n/a 3,000

Notes - remuneration for nominee director to be paid to the nominating company instead of to the said nominee director.

BIMB Holdings Berhad Other Emoluments

Per Annum (RM)

Vehicle allowance

Medical

Leave Passage

Board Chairman 120,000 18,000 40,000

Member 24,000* 18,000 30,000

*This entitlement is only for director that holds the position of Senior Independent Non-Executive Director.

The details of each director’s remuneration for the financial year ended 31 December 2020 are disclosed from pages 132 to 133 of the Integrated Annual Report 2020. The directors’ remuneration framework is available at the Company website www.bimbholdings.com


37

The remuneration package for the Senior Management is structured to link rewards to corporate and individual performance. It comprises salary, allowances, bonuses and other customary benefits as accorded by comparable companies. A portion of the Senior Management’s compensation package has been made variable and is determined by performance during the year against individual KPIs in a scorecard aligned with the corporate objectives as approved by the Board. The BNRC reviews the performance of the Senior Management annually and submits views/recommendations to the Board on the remuneration and/or rewards to reflect the Senior Management’s contributions towards the Company’s achievements for the year. Bands and the remuneration summary of the senior management’s (inclusive the Chief Executive Officer) for the financial year ended 31 December 2020 are disclosed on page 263 of the Integrated Annual Report 2020.



Measure

Timeframe

38

Intended Outcome The level and composition of remuneration of directors and senior management take into account the company’s desire to attract and retain the right talent in the board and senior management to drive the company’s long-term objectives. Remuneration policies and decisions are made through a transparent and independent process. Practice 6.2 The board has a Remuneration Committee to implement its policies and procedures on remuneration including reviewing and recommending matters relating to the remuneration of board and senior management. The Committee has written Terms of Reference which deals with its authority and duties and these Terms

are disclosed on the company’s website.

Application Applied


BHB has in place a remuneration structure for the directors that is sufficient to attract, retain and remunerate for their contribution to the Company. The remuneration structure for the non-executive directors take into consideration the relevant factors which include the function, workload, responsibilities and time spent for the preparation of the Board and Board Committee meeting. A premium is given to the Chairman of the Board and the Board Committees in view of his/her additional role in guiding and managing the Board and the Board Committee meetings. The remuneration includes monthly fees, meeting allowances and other benefits such as leave passage. The remuneration of the Managing Director/ CEO is recommended by the BNRC and determined by the Board. The performance of the Managing Director/ CEO is assessed annually based on the set of Key Performance Indicators (“KPIs”) approved by the Board. This is taken into consideration when determining the reappointment of the Managing Director / CEO and in payment of bonus, where applicable. The remuneration of the directors is disclosed annually in the Company’s Integrated Annual Report 2020. The BNRC’s Terms of Reference outline the roles and responsibilities in relation to the nomination and remuneration matters. The TOR is available at the Company website www.bimbholdings.com



Measure

Timeframe


39

Intended Outcome Stakeholders are able to assess whether the remuneration of directors and senior management is commensurate with their individual performance, taking into consideration the company’s performance. Practice 7.1 There is detailed disclosure on named basis for the remuneration of individual directors. The remuneration breakdown of individual directors includes fees, salary, bonus, benefits in-kind and other emoluments.

Application Applied


Details on the aggregate remuneration of Directors of the Company (comprising remuneration received and/or receivable from the Company and its subsidiaries within the Group for year 2020) are as follows:

Director Total Directors’ remuneration for financial year ended 31 December 2020 (Ringgit Malaysia)

Directors’ Fees

Meeting Fees

Token of Appreciation

Benefits in-kind

Other Emoluments

*

Tan Sri Ambrin Buang Independent Non-Executive Director/ Chairman

Total: 390,025

120,000 55,000 40,000 8,374 166,651


• Chairman, BAEC and BNRC

• Member, BRC

• Director, Bank Islam Malaysia Berhad

Total: 809,774

293,920 110,240 40,000 33,374 332,240

Encik Mohd Tarmidzi Ahmad Nordin Independent Non-Executive Director

• Chairman, BRC

• Member, BAEC and BNRC

Total: 325,217

120,000 112,000 40,000 8,374 44,843

Datuk Nik Mohd Hasyudeen Non-Independent Executive Director


Total: 233,774

- 72,000 30,000 8,374 123,400

Encik Zahari @ Mohd Zin Idris Non-Independent Non-Executive Director

• Member of BAEC, BNRC and BRC

• Director, Bank Islam Malaysia Berhad and Group

• Director, BHB Group

Total: 856,974

398,940 93,280 - 23,374 341,380

Notes: * Vehicle Allowance, Directors’ Training, Leave Passage and Medical Claim.

40



Measure

Timeframe

41

Intended Outcome Stakeholders are able to assess whether the remuneration of directors and senior management is commensurate with their individual performance, taking into consideration the company’s performance. Practice 7.2 The board discloses on a named basis the top five senior management’s remuneration component

including salary, bonus, benefits in-kind and other emoluments in bands of RM50,000.

Application Departure


The Board has decided not to disclose on a named basis the top senior management’s remuneration components including salary, bonus, benefits-in-kind and other emoluments in bands of RM50,000. However, breakdown of the senior management’s remuneration in the bands of RM250,000 is as follows:

Range of Remuneration (Basic salary, fixed allowances and bonus) (RM)

Number of Key Senior Officers (inclusive of the CEO)

<750,000 2

750,000 up to 1,000,000 1

1,000,001 up to 1,250,000 -

1,250,001 up to 1,500,000 1

1,500,001 and above 1

Total 5

Remuneration summary of the Chief Executive Officer and Key Senior Officer are as follows:

Elements Total (RM) What it Includes

Fixed Component

6.03 million Base Salary Fixed Allowances Cash Bonus

Variable Component

1.35 million Benefit-in-kind Other Emoluments

Some of the senior management performed a dual role (at BHB and Bank Islam). Details of the Chief Executive Officer remuneration can be found at Nate 41 on page 263 of the Integrated Annual Report 2020.


Such disclosure would be disadvantageous to the Group’s business interests as the disclosure of such sensitive information may result in excessive competition for talent in the banking industry.


Measure The Company will closely monitor developments in the market in respect of such disclosure for future consideration.

Timeframe Others

42

Intended Outcome Stakeholders are able to assess whether the remuneration of directors and senior management is commensurate with their individual performance, taking into consideration the company’s performance. Practice 7.3 - Step Up Companies are encouraged to fully disclose the detailed remuneration of each member of senior management on a named basis.

Application Not adopted


43

Intended Outcome There is an effective and independent Audit Committee. The board is able to objectively review the Audit Committee’s findings and recommendations. The company’s financial statement is a reliable source of information. Practice 8.1 The Chairman of the Audit Committee is not the Chairman of the board.

Application Applied


The Board Audit and Examination Committee (“BAEC”) is chaired by a Senior Independent Non-Executive Director, Puan Noraini Che Dan, who is a member of the Malaysian Institute of Accountant (MIA) as well as the Malaysian Institute of Certified Public Accountants (MICPA). She is not the Chairman of the Board. The Chairman of the Board is Tan Sri Ambrin bin Buang. The BAEC must not be chaired by the Chairman of the Board and must be an Independent Director. This had been specified in the BAEC’s Terms of Reference, which is available at the Company’s website www.bimbholdings.com The composition of the BAEC, members profile and their roles and responsibilities are disclosed under Section B of this CG Report 2020.



Measure

Timeframe


44

Intended Outcome There is an effective and independent Audit Committee. The board is able to objectively review the Audit Committee’s findings and recommendations. The company’s financial statement is a reliable source of information. Practice 8.2 The Audit Committee has a policy that requires a former key audit partner to observe a cooling-off period of at least two years before being appointed as a member of the Audit Committee.

Application Applied


None of the Board members are former key audit partners of BHB and Group. Hence, there is no such person being appointed as a member of the BAEC. However, the cooling off period of at least two (2) years for a former key audit partner before being appointed as a member of the BAEC had been specified in the BHB’s Board Charter, which is available at www.bimbholdings.com



Measure

Timeframe


45

Intended Outcome There is an effective and independent Audit Committee. The board is able to objectively review the Audit Committee’s findings and recommendations. The company’s financial statement is a reliable source of information. Practice 8.3 The Audit Committee has policies and procedures to assess the suitability, objectivity and independence

of the external auditor.

Application Applied


BHB has in place a process to consider the appointment/re-appointment of External Auditor, which is in line with BNM’s Policy on External Auditor. The Process requires the Board Audit and Examination Committee (“BAEC”) to assess the External Auditor’s compliance with qualification criteria set out by BNM, which includes evaluating the independence, objectivity, audit approach, added value and performance of the External Auditor. During the year under review, the shareholders at the 23rd Annual General Meeting on 26 August 2020 had, approved the re-appointment of Messrs. PricewaterhouseCoopers PLT as the external auditor. Some of the activities of the BAEC in relation to external auditor in 2020 include:

• Deliberated and approved on behalf of the Board, the external auditor’s 2020 audit plan encompassing the audit approach, roles and responsibility, the nature and scope for the year’s audit, audit fees, reporting schedule, potential key audit risk matters, risk assessment, Information Technology (“IT”) approach, transition plan, reliance with Internal Auditor and value-added services. The external auditor informed that focus for the Group will be on areas related to IT security and controls over key financial information systems that are used to record and process critical financial data. The objective of the IT audit review is to assist the external auditor to form an opinion on the financial statements. The BAEC took note on the impact of the COVID-19 pandemic and the external auditor has tailored the audit procedures accordingly to address the heightened risks arising from the extended Movement Control Order (“MCO”) and its equivalent in other regions, as well as the global economic slowdown and government reliefs made available to the public. The outputs show both significant risks and other judgmental risks for the FY2020 audit arising from COVID-19 which are outlined below: Potential heightened risks with significant impact on audit 1. Risk of fraud due to management override of controls; 2. Risk of fraud in revenue recognition; 3. Expected credit losses (“ECL”) measurement, including staging impact arising

from financing repayment moratorium; and 4. Valuation of Takaful contract liabilities;

46

Potential risks with moderate impact on audit 5. Modification loss arising from financing repayment moratorium and relief

measures from government schemes; 6. Impairment of financial assets at fair value through other comprehensive

income (“FVOCI”) and amortised cost (“AC”); 7. Classification and measurement of financial assets at fair value through profit

and loss (“FVTPL”), FVOCI and AC; and 8. IT security risk.

• Evaluated the independence and objectivity of the external auditor by reviewing the fees and the list of non-audit services provided by the external auditor to BHB and the Group. The BAEC requested that justification is to be provided by the Management on the external auditor’s audit fee. The BAEC was informed that the audit fees were justified with an additional value added-services to BHB Group, at no additional cost. The value added services are as follows:- (1) MFRS 9 model monitoring procedures (4 portfolios); (2) Data input testing for the MFRS 9 models (4 portfolios); (3) Modification loss audit procedures; and (4) Review of management overlay.

• The BAEC exercised its right as stipulated in its Terms of Reference, to hold meetings with the external auditor without the presence of the Management to enable open discussion with the BAEC. During the financial year under review, two (2) meetings were held without the Management’s presence, namely on 29 January 2020 and 28 October 2020 to discuss relevant issues and obtain feedback for improvements.

• Assessed the performance of the external auditor by reviewing the timeless of service deliverables. The external auditor was able to complete the audits for BHB and the Group within the timelines sets as evidenced below: (1) The audited financial statement for the financial year ended 31 December

2019 were completed on 30 April 2020. However, due to the Covid-19 Pandemic and the MCO by the Government, the signed off by the external auditor was on 14 May 2020;

(2) Report on limited review for the financial period 30 September 2020 was signed off by the external auditor on 31 October 2020; and

(3) No past audit lapses were observed on the external auditor in the past assurance engagements.

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• Reviewed and recommend to the Board the re-appointment of external auditor. The BAEC will evaluate based on the performance, independence and suitability of the external auditors. In reviewing the performance, independence and suitability of the external auditors, the BAEC reviewed the qualifications and the experiences of the audit team as well as conducted an assessment on the effectiveness and the performance of the external auditors and other areas such as the scope of the audit, their independence and objectivity, audit fees and audit experience.

Based on the above assessment, the BAEC had recommended for Board approval at the Board of Directors’ meeting held on 29 January 2021. The assessment covered PwC’s ability in meeting BHB’s requirements, governance, efficiency and effectiveness in planning and conducting the audit. Being satisfied with Messrs PwC performance in FYE2020, their technical competency and audit independence as well as fulfilment of criteria as set out in the guideline for reappointment/appointment of external auditor, the BAEC recommended the reappointment of Messrs PwC as External Auditor for the financial year ending 31 December 2021. The shareholder approval is sought at the upcoming 24th Annual General Meeting of BHB.



Measure

Timeframe

48

Intended Outcome There is an effective and independent Audit Committee. The board is able to objectively review the Audit Committee’s findings and recommendations. The company’s financial statement is a reliable source of information. Practice 8.4 - Step Up The Audit Committee should comprise solely of Independent Directors.

Application Not Adopted


The members of the Board Audit and Examination Committee (“BAEC”) are as follows:

Name Status

Chairman Puan Noraini Che Dan

Senior Independent Non-Executive Director

Member Encik Mohd Tarmidzi Ahmad Nordin

Independent Non-Executive Director


Non-Independent Non-Executive Director

Majority of the members are Independent Non-Executive Directors and chaired by a Senior Independent Non-Executive Director. The BAEC composition is in line with its Terms of Reference (“TOR”), Main Market Listing Requirements as well as BNM CG Policy. The BAEC’s TOR is available at www.bimbholdings.com



Measure

Timeframe


49

Intended Outcome

There is an effective and independent Audit Committee. The board is able to objectively review the Audit Committee’s findings and recommendations. The company’s financial statement is a reliable source of information. Practice 8.5 Collectively, the Audit Committee should possess a wide range of necessary skills to discharge its duties. All members should be financially literate and are able to understand matters under the purview of the Audit Committee including the financial reporting process. All members of the Audit Committee should undertake continuous professional development to keep

themselves abreast of relevant developments in accounting and auditing standards, practices and rules.

Application Applied


The BAEC is chaired by Puan Noraini Che Dan, a Senior Independent Non-Executive Director, who is a member of the Malaysian Institute of Accountant (“MIA”) as well as the Malaysian Institute of Certified Public Accountants (“MICPA”). Other members of the BAEC are as follows: 1. Encik Mohd Tarmidzi Ahmad Nordin, Independent Non-Executive Director; and 2. Encik Zahari @ Mohd Zin Idris, Non-Independent Non-Executive Director (member

w.e.f 3 February 2020). All members of the Audit Committee have the relevant accounting or related financial management experience or expertise. The Board reviews the performance and assesses the terms of office of the BAEC and its members through an annual Board Committee effectiveness evaluation in accordance with Paragraph 15.20 of the Bursa Securities Listing Requirements. Based on the Board Evaluation FY2020, the BAEC was rated 4.3 out of 5.00 on its overall performance in terms of mix of skills, composition, active participation, decision making and quality of deliberation. The BAEC members are expected to devote sufficient time to update their knowledge and enhance their skills through appropriate continuing education programmes. Listed below are the seminars and training events attended by the BAEC members to keep abreast of latest developments for the period under review:-

Name of Directors

List of Training/Conference/Seminar/Workshop Attended

Puan Noraini Che Dan

• Briefing Session 2020 for Board and Management Bank Islam

• Islamic Finance for Board of Directors

• Table Top Exercise by FireEye (Cyber Security Simulation Briefing)

• SP Setia MACC Act 2020

• Webinar on Impact of Covid-19 Pandemic to The Economy By:

- Dato Dr Rajah Rasiah (Prof of Economics at AEI);

50

- Dr. Mohd Afzanizam Abdul Rashid (Chief Economist Bank Islam); and

- Encik Imran Nurginias (Economist BIMB Securities).

• Islamic Finance for Board of Directors

• Anti Money Laundering

• Corruption Risk

• United Against Corruption: Speak Up for Integrity


• Briefing Session 2020 for Board and Management Bank Islam

• Focus Group Discussion: Fide Forum's Board Effectiveness Evaluation Project

• Webinar on Impact of Covid-19 Pandemic to the Economy By:

- Dato Dr Rajah Rasiah (Prof of Economics At AEI);



• Anti-Money Laundering

• Corruption Risk



• Mercantile Insurance : A Case Study

• Creating Catalytic Conversations

• Webinar on Impact of Covid-19 Pandemic To The Economy By:

- Dato Dr Rajah Rasiah (Prof of Economics at AEI);



• Knowledge Sharing Session on Wealth Management

• Anti Money Laundering

• Corruption Risk




Measure

Timeframe

51

Intended Outcome Companies make informed decisions about the level of risk they want to take and implement necessary controls to pursue their objectives. The board is provided with reasonable assurance that adverse impact arising from a foreseeable future event or situation on the company’s objectives is mitigated and managed. Practice 9.1 The board should establish an effective risk management and internal control framework.

Application Applied


The Board has established an organisation structure and charter with clearly defined lines of responsibility, authority limits and accountability in association with BHB’s Group business and operational requirements in order to maintain a sound control environment. The effectiveness of risk management and internal controls is ensured by the establishment of the Board Audit and Examination Committee (“BAEC”), Board Risk Committee (“BRC”) and the Group Risk Management Committee (“GRMC”). The BRC regularly evaluates the adequacy and effectiveness of the Group’s risk management by reviewing the actions taken on lapses/deficiencies identified in reports presented by the respective subsidiaries at the GRMC. The BAEC ensure the internal control policy and guideline are in order and in comply with regulatory requirements. Further details on the state of the Group’s risk and internal controls during FY2020 can be found in the Statement on Risk Management and Internal Controls on pages 150 to 156 of BHB’s Integrated Annual Report 2020.



Measure

Timeframe

52

Intended Outcome Companies make informed decisions about the level of risk they want to take and implement necessary controls to pursue their objectives. The board is provided with reasonable assurance that adverse impact arising from a foreseeable future event or situation on the company’s objectives is mitigated and managed. Practice 9.2 The board should disclose the features of its risk management and internal control framework, and the

adequacy and effectiveness of this framework.

Application Applied


Risk management is considered an integral part of the Group’s day-to-day operations to facilitate BHB in achieving its objectives and to protect its shareholders and stakeholders’ interest. Risk management is embedded in the Group’s key processes and monitored through a Risk Management Dashboard (“RMD”) report. The Group’s key operating subsidiaries report their risks via the RMD at their BRC six (6) times a year. BIMB Securities reports its risks via the RMD at its BARC on quarterly basis. The Group’s risk management framework is in place to ensure that there is an effective on-going process in place to manage risk across the Group. This process is regularly reviewed by the Board through the BRC which provides oversight over the risk management activities for the Group. The BRC also assists the Board to review the Group’s overall risk management philosophy, frameworks, policies and models. In discharging its overall duties and responsibilities, the BRC is supported by the Group Risk Management Committee which monitors and evaluates the effectiveness of the Group’s risk management system on an on-going basis. In addition to the risk management framework, the Group’s key operating subsidiaries, namely Bank Islam and Takaful Malaysia have implemented the Internal Capital Adequacy Assessment Process (“ICAAP”) framework to ensure that the Group maintains adequate capital levels consistent with the risk profiles including capital buffers to support the Group’s current and projected demand for capital under existing and stressed conditions. Each key operating subsidiary has appointed its own qualified risk officer who is responsible for monitoring, assessing and managing the risks associated with its business and operations. The RMD of each subsidiary is tabled at the GRMC, and where relevant, subsequently tabled at BHB’s BRC. The BRC or the BAEC/BARC (as the case may be) of the key operating subsidiaries will update their respective Boards on any new regulatory or statutory requirement that could impact the internal control and the risk management principles, policies, procedures and practices of the Companies and its subsidiaries. At BHB level, the internal control oversight responsibilities are initially carried out by the following committees:-

53

• Board Audit & Examination Committee (“BAEC”) The main responsibility of the BAEC is to assist the Board in assessing the effectiveness of the Group’s internal control systems and overseeing the accounting system’s internal control. • Board Risk Committee (“BRC”) The BRC is responsible to assist the Board on risk management and oversee the Management’s activities in managing significant risk areas and to ensure that the risk management framework is in place and functioning effectively. At the Management level, the BRC is supported by the Group Risk Management Committee (“GRMC”) to oversee the risk management matters relating to the Group risk management activities. The minutes of the BRC is escalated to the Board for information. The BHB’s key internal control and risk management structure established are as follows:- • Risk Management Framework • Risk Appetite • Audit and Examination Committee • Board Risk Committee • Group Management Committee • Group Risk Management Committee • Internal Audit • Shariah Advisory and Shariah Audit Other Key Elements of Internal Control The other key elements of the internal control systems are described below: • Board Meetings • Group Organisation Structure • Limit of Authority Matrix • Standard Operating Procedures • Human Resources Policies and Procedures • Annual Business Plan and Budgeting Process • Information Technology (“IT”) System • Performance Review • Whistle Blowing Policy • Shariah Compliance Policy • Anti- Bribery and Corruption Policy Further details on the state of the Group’s risk management and internal controls during FY2020 can be found in the Statement on Risk Management and Internal Controls on page 150 to 156 of BHB’s Integrated Annual Report 2020.



Measure

Timeframe

54

Intended Outcome

Companies make informed decisions about the level of risk they want to take and implement necessary controls to pursue their objectives. The board is provided with reasonable assurance that adverse impact arising from a foreseeable future event or situation on the company’s objectives is mitigated and managed. Practice 9.3 - Step Up The board establishes a Risk Management Committee, which comprises a majority of independent

directors, to oversee the company’s risk management framework and policies.

Application Applied


The Board has established a Board Risk Committee (“BRC”) that is responsible for formulating and reviewing the risk management policies and risk appetite of BHB. The BRC consist of three (3) members and majority of the members are Independent Non-Executive Directors. The Chairman namely Encik Mohd Tarmidzi Ahmad Nordin is an Independent Non-Executive Director and also not the Chairman the Board. The BRC is supported by the Group Risk Management Committee (“GRMC”) which is chaired by the Chief Risk Officer of Bank Islam Malaysia Berhad. The other members of the GRMC are the Group Chief Financial Officer, Chief Risk Officer and Chief Compliance Officer of each key operating subsidiaries as well as the Chief Economist of Bank Islam and BIMB Securities. The GRMC assists the BRC to effectively manage the key risk areas of the Company and the Group, and to ensure that an appropriate risk management system and internal controls are in place and functioning effectively.

The BRC’s Terms of Reference is available at the Company website www.bimbholdings.com



Measure

Timeframe


55

Intended Outcome Companies have an effective governance, risk management and internal control framework and stakeholders are able to assess the effectiveness of such a framework. Practice 10.1 The Audit Committee should ensure that the internal audit function is effective and able to function

independently.

Application Applied


The Internal Audit functions report directly to the BAEC and is independent of the activities of its auditees. The primary responsibilities of the Internal Audit Division (“IAD”) are to undertake regular and systemic reviews of the risk management process, internal control and governance practices of BHB and its wholly-owned subsidiaries. The reviews are done in compliance with the International Professional Practices Framework and the Internal Audit Charter to provide a reasonable assurance that the risk management process, internal controls and governance practices are operating satisfactorily and effectively, in line with the Group’s goals and objectives. The IAD is led by the Chief Internal Auditor namely Encik Zalfitri Abd Mutalib (“Encik Zalfitri”). Encik Zalfitri has over 20 years audit experience in the financial and banking industry. Encik Zalfitri is a Certified Public Accountant and a Fellow member of the ACCE. He is also a Certified Internal Auditor for financial Institution. The BAEC’s role in relation to the IAD are as follows:-

• Review the adequacy and effectiveness of the internal audit function and processes, as well as ensure that the Internal Audit is adequately resourced and set up to carry out its functions, including approving its budget;

• Review the Internal Audit’s plan, its effectiveness and the scope and results of audits; and

• Review key audit reports and ensure appropriate necessary corrective actions have been taken by the Management in timely manner to address control weaknesses, policies and other problems identified by the internal auditors and other control functions.

The BAEC’s activities in relation to the IAD for FYE2020 are as follows:

• Reviewed and approved the 2020 Internal Audit Plan for BHB and its wholly-owned subsidiaries, namely Syarikat Al-Ijarah Sdn. Bhd. and BIMB Securities (H) Sdn. Bhd. on 24 August 2020. Ensure the internal audit plan includes the scope, procedures and frequency as well as adequacy and competency of internal audit resources.

• Reviewed the Internal Audit methodology in assessing the risk levels of various auditable areas based on the impact and likelihood of the inherent risk, the controls in place and the existence of effective risk transfer in minimizing potential losses from negligence or fraud.

56

The approved Internal Audit Plan was established based on the staff strength of five (5) auditors with an estimated requirement of 53 man-days and a projected audit fee of RM16,000.00.

• Deliberated on the Internal Audit Report for BHB and its wholly owned subsidiaries as issued by the Internal Auditor on 26 March 2021, which amongst others focused on the effectiveness and adequacy of governance, risk management and internal control, audit rating and recommendation. The Internal Audit Report also included the Information Technology Audit which assessed the adequacy of the IT information system and the necessary back-up systems to cover for contingencies or disaster. The Shariah Audit Report will cover compliance to Shariah requirements on relevant documentation and zakat computation and payment.

• Ensured that appropriate corrective actions were taken by Management in a timely manner to address control weaknesses, policies and other areas identified by the Internal Auditors and other control functions.

• Reviewed the independence of the Internal Auditors. It was brought to the BAEC attention that there had been no conflicts of interest arising from the Internal Audit engagements in financial year 2020 and had conducted its internal audit as stated in the Audit Charter.

• Assessed the effectiveness of Internal Audit Function of BHB Group focusing on seven (7) criterias of the Internal Audit function as follows: (i) Adoption of a recognized Internal Audit Framework; (ii) Independence and objectivity; (iii) Planning the audit; (iv) Effectiveness of Internal Audit Function; (v) Resources management; (vi) Communicating audit result; and (vii) Monitoring progress. Overall, the disclosures made in BHB’s Annual Report and Corporate Governance Report as well as the existing practices and processes documented in Internal Audit Manual, Internal Audit Plan and Internal Audit Report of the Internal Auditors have adequately addressed the seven (7) criterias and key observations made in Bursa Securities’ report on Effectiveness of Internal Audit Function: Thematic Review Findings and Key Takeaways that was co-published with the IIAM.



Measure

Timeframe

57

Intended Outcome Companies have an effective governance, risk management and internal control framework and stakeholders are able to assess the effectiveness of such a framework. Practice 10.2 The board should disclose– ▪ whether internal audit personnel are free from any relationships or conflicts of interest, which could

impair their objectivity and independence; ▪ the number of resources in the internal audit department; ▪ name and qualification of the person responsible for internal audit; and ▪ whether the internal audit function is carried out in accordance with a recognised framework.

Application Applied


The internal audit function is to undertake independent review and assessment on the adequacy, efficiency and effectiveness of risk management, internal control and governance practices implemented by the Management. The Internal Auditors of BHB and its subsidiaries (save for Syarikat Takaful Malaysia Keluarga Berhad) is carried out by the Internal Audit Division (“IAD”) of Bank Islam and is independent of the activities or operations of other operating units in the Group. To maintain its independence, proficiency and professionalism as outlined in the Audit Charter, the internal audit function reports to the BAEC and administratively to the Chief Executive Officer. The IAD is led by the Chief Internal Auditor namely Encik Zalfitri Abd Mutalip (“Encik Zalfitri”). Encik Zalfitri has over 20 years audit experience in the financial and banking industry. Encik Zalfitri who is qualified with a degree in Bachelor of Science in Business Administration (Finance) and Chartered Professional in Islamic Finance (“CPIF”). He is also a Certified Internal Auditor for Financial Institution (“CIAFIN”). The primary responsibilities of the IAD are to undertake regular and systemic reviews of the risk management process, internal control and governance practices of BHB and its Group in conformance with the International Professional Practices Framework and the Internal Audit Charter so as to provide reasonable assurance that the risk management process, internal controls and governance practices are operating satisfactorily and effectively and are in line with the Group’s goals and objectives. The IAD adopts a risk-based methodology which focuses on the following three (3) components: i. Impact and likelihood of the inherent risk; ii. The respective controls in place; and iii. Existence of effective risk transfer and loss impact reduction practices in

minimizing potential losses from negligence or fraud.

To effectively manage its functions and perform the audit engagement, IAD adopt the standards and principles outlined in the Internal Control Framework of Committee of Sponsoring Organization of the Treadway Commission (“COSO”) and the objectives set by the Institute of Internal Audit’s International Professional Practices Framework which comprises core principle for the Professional Practice of Internal Auditing, the definition of Internal Auditing and Code of Ethics.

58

The scope of the Internal Audit reports covers improvement opportunities, audit findings, management responses and corrective actions in areas with significant risks and internal control deficiencies. All Internal Audit Reports on the Company and its wholly-owned subsidiaries were tabled to the BAEC for deliberation. The Management are present at the BAEC meetings to respond and provide feedback on the progress of business process improvement opportunities identified by IAD. Based on the audit carried out in the financial year ended 31 December 2020, amongst the risk covered are non-compliance with regulatory requirements, non-compliance with procedures and policies, ineffective human resource management; deficiencies in procurement management; breach of cyber security and non-Shariah compliance. During the financial year under review, IAD issued a total of four (4) audit reports of which one (1) for BHB’s operations and Shariah, one (1) for IT and one (1) each for its BIMB Securities (H) Sdn. Bhd. and Syarikat Al-Ijarah Sdn. Bhd. Based on the audit performed, the rating are as follows:-

Company Audit Report Audit Rating

BIMB Holdings Berhad Operations and Shariah Good

IT System Satisfactory

BIMB Securities (H) Sdn. Bhd. Operations and Shariah Good

Syarikat Al-Ijarah Sdn. Bhd. Operations and Shariah Good

As at 31 December 2020, a total of RM16,000.00 fees was payable to IAD, based on the staff strength of five (5) internal auditors with an estimated of 53 man-days. The internal audit functions of Bank Islam and Takaful Malaysia are carried out by their respective internal audit divisions.



Measure

Timeframe

59

Intended Outcome There is continuous communication between the company and stakeholders to facilitate mutual understanding of each other’s objectives and expectations. Stakeholders are able to make informed decisions with respect to the business of the company, its policies on governance, the environment and social responsibility. Practice 11.1 The board ensures there is effective, transparent and regular communication with its stakeholders.

Application Applied


The Board recognises the importance of timely, complete, accurate and equal dissemination of information with regard to the Company and its Group’s performance and other matters affecting Shareholders’ interest, investors and the general public. Investor Relations (“IR”) The Company has in place an IR Policy to ensure that stakeholders are provided with relevant, timely and comprehensive information about BHB. The Company is committed to providing effective and open communication in order to improve disclosure and transparency. The objective of the IR Policy is to lay down the principles and practices to be adopted by BHB in handling its communication so that investors and potential investors could make an informed investment decision and for the public at large to have a clear understanding of the Group and its objectives. IR activities for year 2020 are as follows:

Date Event

27 February 2020 Analyst Briefing on Audited Financial Statement FYE 31 December 2019

28 May 2020 Result First Quarter 2020

30 November 2020 Result Third Quarter 2020

1 March 2021 Result Fourth Quarter 2020

The IR Policy consists of, amongst others, the following communication guidelines: • BHB would endeavour to provide clear and fair disclosure of pertinent

information to its Shareholders and the investment community in a timely and effective manner;

• To the extent possible, all disclosures would: o be factual, clear and succinct; o contain sufficient quantitative information to allow investors to evaluate the

importance of such information to the activities of BHB; and o explain the consequences or effects of the information on BHB’s future

prospects. If the consequences or effects could not be assessed, justification should be provided.

IR Best Practices In keeping with the best IR practices, BHB has registered as a member of the Malaysian Investor Relations Association (“MIRA”). MIRA’s objectives are to facilitate communication and foster close relationships between Public Listed Companies and the investor community by promoting corporate governance, transparency and enhance shareholder value.

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Authorised Spokesperson All the Company’s communication would only be done by the designated spokespersons who would establish and maintain regular dialogue with Shareholders to solicit and understand their views, as well as to respond to inquiries from members of the investment community or media. Employees who are not authorised spokespersons must not respond under any circumstances to inquiries from the investment community or media, unless specifically authorised by the designated spokespersons. Any inquiry received should be directed to the IR Department. The designated spokespersons of BHB are as follows: • Chief Executive Officer; • Group Chief Strategy Officer; and • Group Chief Financial Officer. Material Information BHB would at all times, fully comply with its disclosure obligations under the Bursa Securities Listing Requirements. Material information concerning BHB, depending on the materiality threshold, could likely have an impact on its share price. This includes such information whether written or oral, such as:

a) Reports and documents provided to Bursa Securities and other regulators; b) Materials and statements in BHB’s Integrated Annual Reports, quarterly

reports, press releases, letters and circulars to shareholders; c) Presentations on behalf of BHB; d) Information on BHB’s website; e) Articles concerning BHB; f) Correspondence and e-mails; g) Verbal statements made to outside parties in meetings, briefings, press

conferences or during telephone conversations; h) Interviews with the media; and i) Speeches given on behalf of BHB.

Communication Platform BHB makes use of various platforms to effectively engage the Shareholders and the investment community, with emphasis on timely, accurate, fair and transparent disclosure of information. BHB’s communication platforms include the following: a) Annual general meetings; b) Meetings with analysts, investors and media; and c) Briefings and Press Conferences. BHB does not respond to rumours or market speculation. Clarifications would however be made promptly through announcements to the Bursa Securities, where necessary. Conferences and Roadshows The Company and its subsidiaries participate in various domestic and international conferences and roadshows, during which its business outlook, strategy and direction are communicated to the relevant stakeholders.

61

Financial Results The Company and its Group’s unaudited quarterly and audited annual financial results are released within the stipulated regulatory timeline to Bursa Securities, together with the accompanying press releases. During the year under review, the annual audited account and quarterly financial results were announced to the public within the stipulated time as required by Bursa Securities. Integrated Annual Report One of the most important methods of communication to Shareholders is through the Company’s Integrated Annual Report, which contains comprehensive details about the financial results and overall performance of the Company and BHB Group. The Chairman’s Statement as well as management Discussion & Analysis in the Annual Report provides an overview of the Company and BHB Group’s performance, operations and other matters affecting Shareholders’ interest. The Company also discloses its sustainability, corporate governance and internal control statements in the Integrated Annual Report. Information disclosed in the Integrated Annual Report allows Shareholders and investors to make informed investment decisions regarding BHB Group. General Meetings The General Meeting is regarded as the main forum for dialogue and communication during which Shareholders and investors are informed of the financial performance and current developments of the Group. In 2020, BHB held its first fully virtual 23rd AGM via remote participation and electronic voting (“e-meeting facilities”) on 26 August 2020 with the Notice of the Agenda of the 23rd AGM issued to the shareholders on 27 July 2020 (being 29 clear days before the meeting). The virtual 23rd AGM was necessary in response and adherence to the Government’s directive to prevent the spread of the COVID-19 virus. Shareholders were encouraged to access the Integrated Annual Report 2019 online as part of the Company’s commitment to the environment and to achieve cost efficiencies. Shareholders were still provided with the Integrated Annual Report in QR code, a summarized version of the Financial Statements, Notice of AGM and Proxy Form. At the virtual 23rd AGM, the Company invited shareholders to participate in the 23rd AGM from their home or officer and followed the entire proceeding as the 23rd AGM were conducted via e-meeting facilities. With the e-voting, shareholders could exercise their rights as a member of the Company to participate and vote and the 23rd AGM. The e-voting was also in line with Practice 12.3 of the MCCG 2017.

62

The broadcast venue was strictly for the purpose of complying with Section 327(2) of the Companies Act 2016 and Clause 96 of the Company’s Constitution that required the Chairman of the meeting to be present at the main venue of the meeting. The shareholders participated in the 23rd AGM would be able to view the live webcast of the meeting, ask question and submitted their votes in real time while the meeting was in progress. For all the latest corporate news and information on the Group, the Company actively updates its official website www.bimbholdings.com. All press releases, announcements to Bursa Securities, analyst briefings and quarterly results are also made available on the website for easy access for all of the Company’s shareholders and all stakeholders. Website BHB’s corporate website, www.bimbholdings.com, represents another channel of communication with stakeholders and acts as an effective platform to disseminate information to the public at large. It contains information on the Company and BHB Group such as its corporate profile, Management, investor information, financial results and corporate news which can be accessed easily and promptly.



Measure

Timeframe


63

Intended Outcome There is continuous communication between the company and stakeholders to facilitate mutual understanding of each other’s objectives and expectations. Stakeholders are able to make informed decisions with respect to the business of the company, its policies on governance, the environment and social responsibility. Practice 11.2 Large companies are encouraged to adopt integrated reporting based on a globally recognised

framework.

Application Applied


In line with the principle of long-term value creation for our shareholders, customers, people and community, we have adopted Integrated Reporting in our Annual Report. The content of our Integrated Annual Report covers the operations of BHB Group, its organisational structure and footprint, strategy and financial performance, and an overview of our approach towards sustainability. In committing ourselves towards building sustainable economic and social progress for the society, BHB focuses on issues that we consider material to our stakeholders. These are identified through our ongoing stakeholders’ engagement activities, which are instrumental to our ability to create and deliver value as an Islamic financial holding company. Further details and comprehensive disclosure of our sustainability efforts are available at BHB’s website – www.bimbholdings.com/sustainability While we are guided by the International Integrated Reporting Council (“IIRC”) Framework in preparing this Integrated Annual report, we have also referred to the following framework: • Malaysian Financial Reporting Standards • Malaysia Companies Act 2016 • Bursa Malaysia’s Sustainability Reporting Guide • FTSE4Good Bursa Malaysia • Global Reporting Initiative G4 • Malaysian Code on Corporate Governance 2017 (“MCCG 2017”)



Measure

Timeframe

http://www.bimbholdings.com/sustainability

64

Intended Outcome Shareholders are able to participate, engage the board and senior management effectively and make informed voting decisions at General Meetings. Practice 12.1 Notice for an Annual General Meeting should be given to the shareholders at least 28 days prior to the

meeting.

Application Applied


In compliance with the recommendations of the Malaysian Code on Corporate Governance 2017, the Company has provided all shareholders at least twenty-eight (28) days’ notice before the date of the 23rd Annual General Meeting (“AGM”) of the Company held on 26 August 2020. The notice of the AGM was issued to all shareholders on 27 July 2020, being 29 clear days of notice prior to the meeting date. The notice of the AGM provides detailed explanations of the resolutions proposed, with relevant explanatory notes and background information, to enable shareholders to make informed decisions before exercising their voting rights. The Administrative Guide accompanying the Notice of the 23rd AGM provides guidance to the shareholders on the conducts of the meeting as well as the voting procedure that need to be followed.



Measure

Timeframe

65

Intended Outcome Shareholders are able to participate, engage the board and senior management effectively and make informed voting decisions at General Meetings. Practice 12.2 All directors attend General Meetings. The Chair of the Audit, Nominating, Risk Management and other

committees provide meaningful response to questions addressed to them.

Application Applied


The General Meeting is regarded as the main forum for dialogue and communication during which Shareholders and investors are informed of the financial performance and current developments of the Group. Shareholders are encouraged to attend the General Meeting and participate in the proceedings. In 2020, BHB held its first fully virtual Annual General Meeting (“AGM”) on the 26 August 2020 with the Notice of the Agenda of the AGM issued to the shareholders on the 27 July 2020 (being 29 clear days before the meeting date). The virtual AGM was necessary in response and adherence to the Government’s directive to prevent the spread of the COVID-19 virus. Shareholders were encouraged to access the Integrated Annual Report online as part of the Company’s commitment to the environment and to achieve cost efficiencies. Shareholders were still provided with the Integrated Annual Report in QR Code, a summarized version of the Financial Statements, Notice of AGM and Proxy Form. Shareholders/proxies participating via live streaming were entitled to raise questions online and vote on resolutions set out in the notice of the 23rd AGM. BHB conducted its AGM by poll via online electronic voting in accordance with Paragraph 8.29A of the Main Market Listing Requirements (voting by poll). The outcomes of voting on the proposed resolutions and minutes of the meeting are disclosed to the market and posted on the Company’s website after the AGM. In 2020, all the Directors of the Company physically attended the 23rd AGM held on 26 August 2020 at the broadcast venue. Only representatives from External Auditors, Group Company Secretary as well as the Chief Executive Officer were physically allowed at the 23rd AGM. Shareholders participated in the virtual 23rd AGM via live streaming and electronic voting. The shareholders were able to view the live webcast of the 23rd AGM, ask question and submitted their votes in real time while the meeting was in progress.



Measure

Timeframe

66

Intended Outcome

Shareholders are able to participate, engage the board and senior management effectively and make informed voting decisions at General Meetings. Practice 12.3 Listed companies with a large number of shareholders or which have meetings in remote locations should leverage technology to facilitate– ▪ including voting in absentia; and ▪ remote shareholders’ participation at General Meetings.

Application Applied


In 2020, BHB held its first fully virtual Annual General Meeting (“AGM”) via live streaming and electronic voting on 26 August 2020 with the Notice of the Agenda of the AGM issued to the shareholders on 27 July 2020 (being 29 clear days before the meeting date). The virtual AGM was necessary in response and adherence to the Government’s directive to prevent the spread of the COVID-19 virus. In order to facilitate greater shareholder participation in view of the COVID-19 crisis, the Board considered leveraging technology to facilitate electronic voting and remote shareholder participation for the 23rd AGM. The virtual AGM was conducted pursuant to Section 327 of the Companies Act 2016, Clause 96 of the Company’s Constitution, and in line with the MCCG 2017.



Measure

Timeframe

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SECTION B – DISCLOSURES ON CORPORATE GOVERNANCE PRACTICES PERSUANT CORPORATE GOVERNANCE GUIDELINES ISSUED BY BANK NEGARA MALAYSIA Disclosures in this section are pursuant to Appendix 4 (Corporate Governance Disclosures) of the

Corporate Governance Guidelines issued by Bank Negara Malaysia. This section is only applicable for

financial institutions or any other institutions that are listed on the Exchange that are required to comply

with the above Guidelines.

CORPORATE INFORMATION (as at 30 April 2021)

Board of Directors

DIRECTORS

DESCRIPTION

1) Tan Sri Ambrin Buang

2) Mohd Tarmidzi Ahmad Nordin

3) Noraini Che Dan

4) Datuk Nik Mohd Hasyudeen Yusoff

5) Zahari @ Mohd Zin Idris

Independent Non-Executive Director Independent Non-Executive Director Senior Independent Non-Executive Director Non- Independent Executive Director Non-Independent Non-Executive Director

The details and background of each Director are available on Board of Directors’ Profile section of BHB’s Integrated Annual Report 2020 and corporate website at www.bimbholdings.com.

BOARD AUDIT AND EXAMINATION COMMITTEE

1) Noraini Che Dan (Chairman/ Independent Non-Executive Director)

2) Mohd Tarmidzi Ahmad Nordin (Independent Non-Executive Director)

3) Zahari @ Mohd Zin Idris (Non-Independent Non-Executive Director)

BOARD RISK COMMITTEE 1) Mohd Tarmidzi Ahmad Nordin (Chairman/ Independent Non-Executive Director)

2) Noraini Che Dan (Independent Non-Executive Director)


BOARD NOMINATION AND REMUNERATION COMMITTEE

1) Noraini Che Dan (Chairman/ Senior Independent Non-Executive Director)

2) Mohd Tarmidzi Ahmad Nordin (Independent Non-Executive Director)


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The roles and responsibilities of the Board are set out in the Board Charter and the Terms of Reference of the Board and Board Committees which is available at www.bimbholdings.com. Board of Directors’ profiles

Name Tan Sri Haji Ambrin Buang

Designation Chairman/ Independent Non-Executive Director

Age / Gender 72 / Male

Nationality Malaysian

Date of Appointment 2 February 2018

Length of tenure as director 3 years

Qualification • Master in International Business, University of South Carolina (USA)

• Degree in Economics, University of Malaya

Area of expertise Auditor, Public Sector

Directorship in Listed Company • Lingkaran Trans Kota Holdings Berhad

• Gamuda Berhad

• BIMB Holdings Berhad

Directorship in Public Company • Yayasan Pelaburan Bumiputra

Working experience • Auditor General of Malaysia • Secretary General, Ministry of Education • State Secretary, Selangor State Government • Senior General Manager, KL International Airport Berhad • Minister of Economics Affairs, Malaysian Embassy in Tokyo,

Japan • Deputy Director, National Institute of Public Administration • Deputy Director, Malaysian Timber Industry Board • Deputy Director, Small Scale Industry, Ministry of

International Trade and Industry • Deputy Director, Industries Division, Ministry of International

Trade and Industry • Private Secretary, Ministry of International Trade and Industry

Board Attendance 10/11

Declaration of interest He has no conviction for offences within the past 5 years. He has no family relationship with any director and/or major shareholder of BHB, and has no conflict of interest in BHB.

Name Puan Noraini Che Dan

Designation Senior Independent Non-Executive Director

Age / Gender 65 / Female


Date of Appointment 1 April 2016


Qualification • Member, Malaysian Institute of Accountants (“MIA”)

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• Member, Malaysian Institute of Certified Public Accountants (“MICPA”)

• Bachelor of Econs (Hons), University of Manchester, United Kingdom

Area of expertise Accounting and Finance

Directorship in Listed Company • SP Setia Berhad

• Tenaga Nasional Berhad

• BIMB Holdings Berhad

Directorship in Public Company • Bank Islam Malaysia Berhad

Working experience • Vice President, Finance of MISC Berhad • Served 15 years with Perbadanan Nasional Berhad

(“PERNAS”) in various senior positions including that of Group General Manager, Finance

• Audit Senior at Hanafiah, Raslan & Mohamed

Board Attendance Board BAEC BNRC BRC

11/11 6/7 4/5 6/8

Declaration of interest She has no conviction for offences within the past 5 years. She has no family relationship with any director and/or major shareholder of BHB, and has no conflict of interest in BHB.

Name Mohd Tarmidzi Ahmad Nordin

Designation Independent Non-Executive Director



Date of Appointment 29 June 2015


Qualification • Associate, Chartered Insurance Institute (UK) (“ACII”) • Fellow, Malaysian Insurance Institute (“FMII”) • MBA in Islamic Finance, International Islamic University

Malaysia (“IIUM”)

Area of expertise Insurance, Takaful and Islamic Finance

Directorship in Listed Company • BIMB Holdings Berhad

Directorship in Public Company • AmMetLife Takaful Berhad

Working experience • Chief Executive Officer, Etiqa Takaful Berhad

• Associate Lecture, Malaysia Insurance Institute Director, Graham Miller (M) Sdn Bhd

• Head, General Takaful Division, Syarikat Takaful Malaysia Keluarga Berhad

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Board and Board Committees Attendance

Board BAEC BNRC BRC

11/11 7/7 5/5 8/8


Name Datuk Nik Mohd Hasyudeen Yusoff

Designation Non-Independent Executive Director



Date of Appointment 1 June 2018


Qualification • Member, Malaysian Institute of Accountants ("MIA")

• Fellow, CPA Australia

• Advanced Business Management Program, IMD International, Switzerland

• Bachelor of Business, Curtin University of Technology, Australia

Area of expertise Accounting


• TH Plantations Berhad


• Al Hijrah Media Corporation

• Yayasan Tabung Haji

Working experience (Present): Group Managing Director and Chief Executive Officer, Lembaga Tabung Haji (Previous):

• Executive Director, Market and Corporate Supervision, Securities Commission Malaysia

• Executive Chairman, Audit Oversight Board, Securities Commission Malaysia

• Chairman, Khairuddin, Hasyudeen & Razi, Chartered Accountant

Board Attendance

11/11

Declaration of interest He has no conviction for offences within the past 5 years. He has no family relationship with any director and/or major shareholder of BHB, and has no conflict of interest in BHB except by virtue of being a nominee director of Lembaga Tabung Haji.

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Name Zahari @ Mohd Zin Idris

Designation Non-Independent Non-Executive Director



Date of Appointment 3 February 2020

Length of tenure as director 1 year

Qualification Senior Cambridge Certificate

Area of expertise Banking



Working experience (Present):

• Chairman, Bank Islam Trust Company (Labuan) Ltd

• Chairman, BIMB Offshore Company Management Service Sdn Bhd

• Chairman, BIMB Securities (Holdings) Sdn Bhd

• Chairman, BIMB Securities Sdn Bhd (Previous):

• Executive Director/Chief Executive Officer, Inter-City MPC (M) Sdn Bhd

• General Manager, Commercial Banking, Malaysian Banking Berhad

• Assistant General Manager, Malayan Banking Berhad

• Deputy Zone Head, Head Office, Malayan Banking Berhad

• Area Manager, Malayan Banking Berhad

• Branch Manager, Malayan Banking Berhad

• Assistant Branch Manager, Malayan Banking Berhad

• Trainee Officer, Malayan Banking Berhad

Board and Board Committees Attendance

Board BAEC BNRC BRC

9/9 7/7 4/4 8/8


Number of meetings convened by the Board and each Board Committee

Number of Meetings

Board 11

Board Audit & Examination Committee 7

Board Nomination & Remuneration Committee 5

Board Risk Committee 8

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Roles and Responsibilities of each Board and Board Committees

BOARD Comprises five (5) members, three (3) Independent Directors, (1) Non-Independent Executive Director and one (1) Non-Independent Non-Executive Director

Main areas of oversight Number of meetings in 2020

• Strategic policy matters which include business plan, budget and corporate structure;

• Financial results and declaration of dividends;

• Any significant operating and credit policies;

• Risk appetite setting;

• Capital management plan;

• Authority limits including discretionary authority;

• Any new outsourcing proposals;

• Succession Planning;

• Declaration of dividends;

• Any corporate exercise which include acquisition or divestment of strategic interest;

• Major acquisition or disposal of capital expenditure;

• Appointment and remuneration of directors the CEO and key Senior Management officers;

• Entry into any related party transaction;

• Review on the adequacy and integrity of the Company’s internal control system; and

• Oversight and evaluation of the conduct and performance of the Company.

11 meetings were held to discuss the following:

• Business strategy, budget for financial year ending 2020 and

projections for BHB, key operating subsidiaries and its wholly

owned subsidiaries;

• Update on Project Caliph (Corporate Restructuring Exercise of

BHB Group);

• Quarterly financial report and Related Party Transaction and

Related Party Balances for BHB and its Group;

• Zakat computation for BHB and its Group;

• Proposed Dividend Reinvestment Plan by BHB;

• Proposed Renewal of Directors’ and Officers’ Liability

Insurance;

• Proposed Renewal of Group Term Family Takaful and Group

Personal Accident Takaful for Directors;

• Proposed Interim Single Tier Dividend for the Financial Year

Ending 31 December 2020;

• Session with the Chairman as well as the Chief Executive

Officer of the Key Operating Subsidiaries.

• Updated proposed audit fees from External Auditors;

• Re-appointment of External Auditor;

• Shariah Review Report on BHB and its subsidiaries (BIMB

Securities (Holding) Sdn Bhd and Syarikat Al-Ijarah Sdn Bhd;

• Proposed Revision to voting policy of BHB and its subsidiaries;

• Management Representation Letter to

PricewaterhouseCoopers;

• Application to Authorities in relation to the Proposed Dividend

Reinvestment Plan; and

• Annual Board Evaluation for the FY2020;

• Proposed appointment of a principal officer at Syarikat Al-

Ijarah Sdn Bhd and BIMB Securities Sdn Bhd;

• Proposed Re-appointment of Tan Sri Ambrin as an

Independent Non-Executive Director;

• Directors’ Training for year 2020;

• Business Zakat Guideline

• Proposal on Group Synergy and Shared Resources;

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• Reviewed the Remuneration and Benefits for the Directors of

BHB;

• Production of Integrated Annual Report 2019;

• Appointment of Corporate Representative for Calendar year

2020 for BHB’s subsidiaries;

• Reviewed of the Board Charter and Terms of Reference of

Board and Board Committee;

• Notification on Director Training and attendance for year 2020;

• Reviewed Syarikat Takaful Keluarga Berhad Long Term

Incentive Plan (“LTIP”);

• Forecast for financial year ending 2020;

• Proposal on Group Synergy and Shared Resources;

• Zakat computation for BHB for the FYE 31 Dec 2019;

• Declaration of directorship and professional commitment by

Directors; and

• Declaration of Independence by Independence Directors.

BAEC Comprises three (3) members, majority are Independent Directors


• Financial reporting

• Internal controls

• Internal audit report

• Internal audit function

• External audit

• Related party transactions

• Compliance reporting

Eight (8) meetings were held to discuss the following:

• Matters relating to BHB

• Matters relating to quarterly financial performance

• Matters relating to Internal Audit report of subsidiaries

• Annual performance review for Internal Audit

• Matters relating to compliance and internal guidelines

• Two (2) meetings with the External Auditors without the presence of Senior Management

BNRC Comprises three (3) members, majority are Independent Directors


• Membership and performance of Board and Board Committee

• Independence of Directors

• Succession planning of CEO and Senior Management

• Remuneration of Directors and Senior Management

• Appointment and re-appointment of Directors

Five (5) meetings were held to discuss the following:

• Identify any potential vacancies in the board of the

respective subsidiaries and the skill gaps;

• Review the background, skills and experience of potential

qualified candidate that could fill in the said vacancies and

the skill gaps on the Board and the board of its subsidiaries;

• Review succession plans for the Board;

• Conducted interview sessions to assess the suitability of the

potential candidates to be appointed to the Board and/or the

board of its subsidiaries;

74

• Recommend the appointment of nominee director of BHB at

the respective subsidiaries;

• Consider the re-appointment and re-election of Directors

and the re-appointment of Chief Executive Officer;

• Consider the proposal to renew the employment contract of

key senior management of the Company; and

• Assess and consider the proposal from a major shareholder

in relation to appointment of its nominee director in BHB.

• Review and recommend the quantum and basis of bonus

payments to the Management and staff of the Company;

and

• Assess and recommend the total remuneration for renewal

of employment contract of key senior management of the

Company.

• Review the status of independence of an Independent Non-

Executive Directors of the Company;

• Review the overall size and composition of the Board and

the board of its subsidiaries and the Group pool of directors;

• Ensure a diverse Board composition for an effective and

well-functioning Board;

• Review and made recommendations on the composition of

Board Committees;

• Conduct annual Board Evaluation of the Board and its

Committees;

• Review the results of the annual Board Evaluation;

• Review and recommend the training needs of each Director;

and

• Review the Board Nomination and Remuneration

Committee’s Overview report.

BRC Comprises three (3) members, majority are Independent Directors


• Risk appetite

• Risk governance

• Risk framework

• Risk management practices and policies

• Compliance risk

• Risk strategy

Eight (8) meetings were held to discuss the following:

• Monitored and discussed the risk reports of the key operating subsidiaries and where appropriate provided guidance to the management;

• Deliberated the Group’s strategic risks, corresponding key operational risks and key controls taken to manage the risks;

• Reviewed the Statement of Risk Management and Internal Control, which summarises the risk management practices and internal controls implemented by the Management;

• Reviewed the Board Risk Committee’s overview report;

• Streamlined the risk reporting to facilitate easier monitoring of the risk associated to the key operating subsidiaries;

75

• Deliberated the risk management dashboard (market risk, operational risk, credit risk, concentration risk, liquidity risk, capital adequacy and insurance risk movement), the risk parameters and stress test tabled by the key operating subsidiaries;

• Reviewed the compliance reporting in accordance with the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, Islamic Financial Services Act 2013, Personal Data Protection Act 2010 including other regulatory requirements and Shariah non-compliance, tabled by the key operating subsidiaries;

• Deliberated on the initiatives to mitigate the deterioration in General Takaful Fund of Syarikat Takaful Malaysia Am Berhad;

• Deliberated on the implementation of National Anti-Corruption Plan (NACP) in line with Section 17A of Malaysian Anti-Corruption Commission Act 2009;

• Reviewed reports on risk incidents which occurred in the financial year and deliberated the adequacy and effectiveness of preventive and corrective actions taken;

• Reviewed the risk appetite statement and key emerging risk of key operating subsidiaries;

• Oversaw the functions of the Group Management Risk Committee;

• Deliberated on the internal capital adequacy assessment process of key operating subsidiaries; and

• Discussed on the measures taken by Bank Negara Malaysia to address the impact of the COVID-19 pandemic as well as measures adopted by the key operating subsidiaries.

Training and Education attended by the Board of Directors in year 2020

Name of Directors

Date List of Training/Conference/Seminar/Workshop Attended

Tan Sri Ambrin Buang

5 August 2020 Webinar on Impact of Covid-19 Pandemic to the Economy by:

- Dato Dr Rajah Rasiah (Prof of Economics at AEI)

- Dr. Mohd Afzanizam Abdul Rashid (Chief Economist Bank Islam)

- Encik Imran Nurginias (Economist BIMB Securities)

11 November 2020

Anti Money Laundering

11 November 2020

Corruption Risk

9 December 2020

United Against Corruption: Speak Up for Integrity


20 May 2020 Mercantile Insurance: A Case Study


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5 August 2020 Knowledge Sharing Session on Wealth Management

8 September 2020

Anti-Money Laundering

11 November 2020

Corruption Risk

9 December 2020


Puan Noraini Che Dan

6 January 2020 Briefing Session 2020 For Board and Management Bank Islam

8 January 2020 7 October 2020

Islamic Finance for Board of Directors

5 February 2020 Table Top Exercise By FireEye (Cyber Security Simulation Briefing)

12 March 2020 SP Setia MACC Act 2020





7 October 2020 Islamic Finance for Board of Directors

11 November 2020


11 November 2020

Corruption Risk

9 December 2020


Datuk Nik Mohd Hasyudeen Yusoff

3 February 2020 Cyber Security Briefing & Training on Boardpac Solution





2 November 2020

The Board's Leadership in Greening Financial Sector

2 November 2020

TH Leadership Luncheon : Leadership During Times of Crisis and Disruption

11 November 2020


11 November 2020

Corruption Risk


6 January 2020 Briefing Session 2020 for Board and Management Bank Islam

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10 September 2020

Focus Group Discussion: Fide Forum's Board Effectiveness Evaluation Project





11 November 2020


11 November 2020

Corruption Risk

9 December 2020


Internal Control Framework Details of the Internal Control Framework are disclosed under the Statement of Risk Management and

Internal Control section in the Company’s Integrated Annual Report 2020.

Remuneration The Directors’ remuneration is a means to acknowledge the Directors’ contributions. It is also a means to attract, motivate and retain Directors of certain calibre and expertise who are willing to contribute their time, efforts and experience towards managing the Company effectively. The reward levels commensurate with the competitive market and business environment in which the Company operates whilst at the same time reflective of the Directors’ experience and level of responsibilities. The remuneration structure for the Non-Executive Directors takes into consideration the relevant factors which include the function, responsibilities, expertise, risk involved and time spent for the preparation of the Board and Board Committee meetings. A higher rate (premium) is given to the Chairman of the Board and the Board Committees in view of his/her additional role in guiding and managing the Board and the Board Committee meetings. Director’s Remuneration Policy The policy on the remuneration for Directors is as follows:

(a) Fees and Other Emoluments

Non-Executive Directors are remunerated by way of monthly fees, a sitting allowance and other

emoluments. Fees payable to Non-Executive Directors are subject to Shareholders’ approval at the

Annual General Meeting.

(b) Benefits in Kind

Other benefits such as Directors’ Health and Medical Benefit together with Directors’ and Officers’

(“D&O”) liability insurance and travelling allowance are also provided.

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The remuneration of the Directors is reviewed once every three (3) years to ensure the Directors are

reasonably remunerated to reflect their role, responsibilities and efforts in discharging their fiduciary

duties.

The Board had on 31 January 2020, reviewed the Directors remuneration. The assessment on the

reasonableness of the Directors remuneration was performed based on comparison with peers in the

market. During the review, results of the peer comparison showed that the average remuneration paid to

BHB’s Non-Executive Directors (“NEDs”) are competitive among the FHC. Based on the assessment,

the Board concurred that the existing Directors remuneration framework as approved by the Shareholders

at its 23rd Annual General Meeting on 26 August 2020 to remain unchanged. The Directors remuneration

framework are as follows:

BIMB Holdings Berhad Retainer Fees (per annum)

RM

Chairperson’s Premium

(per annum) RM

Meeting fees (per meeting)

RM

Board Chairman 48,000 72,000 5,000

Member 48,000 n/a 3,000

BAEC Chairman 24,000 12,000 5,000

Member 24,000 n/a 3,000

BRC Chairman 24,000 12,000 5,000

Member 24,000 n/a 3,000

BNRC Chairman 12,000 12,000 5,000

Member 12,000 n/a 3,000

BIMB Holdings Berhad Other Emoluments Per Annum (RM)

Vehicle allowance Medical

Leave Passage

Board Chairman 120,000 18,000 40,000

Member 24,000* 18,000 30,000 Notes: * The entitlement only for director that holds the position of Senior Independent Non-Executive Director.

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The details on the aggregate remuneration of Directors of the Company (comprising remuneration received and/or receivable from the Company and its subsidiaries within the Group for year 2020) are as follows:

Director Total Directors’ remuneration for financial year ended 31 December 2020 (Ringgit Malaysia)

Directors’ Fees

Meeting Fees

Token of Appreciation

Benefits in-kind

Other Emoluments*

Tan Sri Ambrin Buang Independent Non-Executive Director/ Chairman

Total: 390,025

120,000 55,000 40,000 8,374 166,651


• Chairman, BAEC and BNRC

• Member, BRC


Total: 809,774

293,920 110,240 40,000 33,374 332,240

Encik Mohd Tarmidzi Ahmad Nordin Independent Non-Executive Director

• Chairman, BRC

• Member, BAEC and BNRC

Total: 325,217

120,000 112,000 40,000 8,374 44,843

Datuk Nik Mohd Hasyudeen Non-Independent Executive Director


Total: 233,774

- 72,000 30,000 8,374 123,400

Encik Zahari @ Mohd Zin Idris Non-Independent Non-Executive Director

• Member of BAEC, BNRC and BRC

• Director, Bank Islam Malaysia Berhad and Group

• Director, BHB Group

Total: 856,974

398,940 93,280 - 23,374 341,380

Notes: * Vehicle Allowance, Directors’ Training, Leave Passage and Medical Claim.

KEY SENIOR OFFICER REMUNERATION The remuneration package for the Senior Management is structured to link rewards to corporate and

individual performance. It comprises salary, allowances, bonuses and other customary benefits as

accorded by comparable companies. A portion of the Senior Management’s compensation package has

been made variable and is determined by performance during the year against individual KPIs in a

scorecard aligned with the corporate objectives as approved by the Board. The BNRC reviews the

performance of the Senior Management annually and submits views/recommendations to the Board on

the remuneration and/or rewards to reflect the Senior Management’s contributions towards the

Company’s achievements for the year.

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The remuneration bands of the Chief Executive Officer and the Key Senior Officer of BHB are as follows:-

Range of Remuneration (Basic salary, fixed allowances and bonus) (RM)

Number of Key Senior Officers (inclusive of the CEO)

<750,000 2

750,000 up to 1,000,000 1

1,000,001 up to 1,250,000 -

1,250,001 up to 1,500,000 1

1,500,001 and above 1

Total 5

Remuneration Summary of the Chief Executive Officer and Senior Management

Elements Total

Fixed Component

• Base Salary

• Fixed Allowances

• Cash Bonus

6.03 million

Variable Component

• Benefit-in-Kind

• Other Emoluments

1.35 million

corporate governance report stock code : 5258 …

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