Axiata Group Berhad - Annual Report 2016

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GOVERNANCE Axiata Group Berhad | Annual Report 2016 073
STATEMENT ON
CORPORATE GOVERNANCE
INTRODUCTION
The Board of Directors of Axiata Group Berhad (Axiata or Company) is a
strong advocade of good corporate governance and strives to put in place
a strong and effective system throughout the Group. Axiata’s continuous
efforts to enhance its corporate governance practices have received many
recognitions including the following in the year 2016:-
i) Ranked 3rd in Excellence Award for Top Corporate Governance and
Performance (Overall Category) and Merit Award for Corporate
Governance Disclosures; and
ii) Excellence Award for Long-Term Value Creation and for ESG Practices.
In this statement, the Board presents key highlights for the year 2016
and outlines how Axiata complies with each of the eight principles and
26 recommendations of the Malaysia Code on Corporate Governance
2012 (MCCG2012). This statement has been made in accordance with the
resolution and authority of the Board dated 22 February 2017 and updated
until the date of the Annual Report.
For better understanding of Axiata’s compliance with the MCCG 2012 in
respect of the financial year 2016 (FY16) kindly refer to the table at https://
Corporate Governance Framework
Axiata’s Corporate Governance Framework is developed based on the
following statutory requirements, best practices and guidelines:-
i) Companies Act 2016 (CA 2016);
ii) Main Market Listing Requirements (Main LR) of Bursa Malaysia Securities
Berhad (Bursa Securities);
iii) MCCG 2012;
iv) Manual on Enhancing Board Effectiveness by the Putrajaya Committee
on Government Linked Companies (GLCs)’ High Performance (Green
Book); and
v) Corporate Governance Guide: Towards Boardroom Excellence 2nd
Edition issued by Bursa Securities.
BOARD OF DIRECTORS
Board Charter
The Board Charter sets out the roles and responsibilities of the Board. Axiata’s
Board Charter, which is periodically reviewed, takes into consideration
all applicable laws, rules and regulations as well as best practices. The
Board Charter covers inter-alia, the objectives of the Board, duties and
responsibilities, powers, roles of the Chairman, President & GCEO and Non-
Executive Directors (NED). It serves as a reference and primary induction
literature, providing Board members and Management insight into the
function of the Board. Board’s specific reserved matters covering areas such
as strategy and business planning, finance and controls, people, compliance,
support and assurance are entrenched in the Board Charter.
Axiata Board Charter is available online at
corporate/Board_Charter.pdf
Roles and Responsibilities of the Board
In support of the Board Charter, Axiata has in place the Limits of Authority
(LOA) document. The LOA serves to optimise operational efficiency and
outlines high level duties and responsibilities of the Board and delegated
day-to-day management of the Company to the President & GCEO. This
delegation structure is further cascaded by the President & GCEO to the
Senior Leadership Team (SLT) within the Company’s CC. The President &
GCEO and the SLT remain accountable to the Board for the authority being
delegated.
The LOA is subject to review from time to time and any revision is first tabled
to the Board Audit Committee (BAC) for recommendation before seeking
the Board’s approval. For the year 2016, the Board approved updates and/
or revisions to the LOA covering; inter-alia, new capex governance process,
strategy and business planning.
The following paragraphs describe how the Board of Directors of Axiata
have discharged its key fiduciary duties and leadership functions and
responsibilities in 2016:-
i) Review and Approve Strategic and Annual Business Plan and
Budget
TheBoardplaysakeyandactiverole intheformulationanddevelopment
of the Company’s strategy. Annually, two off-site or retreat sessions
are held for discussions on key strategies and proposed business plans
for the following year. At the mid-year Board Strategy Retreat in July
2016, the Board focused on Axiata’s Long Range Plan covering various
areas crucial to Axiata’s future; such as data leadership, convergence,
new business opportunities, capex, organisational and cultural changes
for turnaround and digital culture. A case study on convergence and
business transformation in one of the world’s largest mobile phone
companies was also presented at the strategy retreat. Discussions
during the mid-year retreat set the tone and provided direction in the
formulation of the Company’s strategy and business plans.
At the year-end Board Strategy and Business Planning Retreat
in November 2016, the proposed business plan and budget were
presented by the Management of Axiata and the OpCos. In this
session, the Board deliberated in detail on the Group’s annual strategy
and business plan and provided their feedback and guidance before
subsequent approval was sought. Selected topics such as network
strategy, disruptive technology opportunities, digitisation and
innovation were also dealt with in more detail during the year-end
Retreat.
ii) Overseeing Conduct of Company’s Business
On a quarterly basis, execution of annual strategy and challenges
thereof are reported to the Board. Progress is monitored against the
agreed KPIs approved by the Board. Major OpCos are also invited to
present their performance on a rotational basis. This enables the Board
to receive first hand updates from the Management of the respective
major OpCos on their performance, key developments and/or issues
and prospects.