LPI Capital Bhd : Corporate Governance Report for Integrated Annual Report 2021

CORPORATE GOVERNANCE REPORT

STOCK CODE	:	8621
COMPANY NAME	:	LPI CAPITAL BHD
FINANCIAL YEAR	:	December 31, 2021

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	:	•	The Chairman ensures that appropriate procedures are in place to
application of the			govern the Board's operation and leads the Board in establishing
practice			and monitoring good corporate governance practices in the
			Company.
		• The Co-Chairman ensures that decisions are taken on a sound and
			well-informed basis, including by ensuring that all strategic and
			critical issues are considered by the Board, and that Directors
			receive the relevant information on a timely basis.
		• The	Chief Executive Officer/ Executive	Director	formulates
			strategic vision and business directions for the Company.
		• The	Directors promote sustainability	through	appropriate
			environmental, social and governance considerations in the
			Company's business strategies. They also ensure that the strategic
			plan of the Company supports long-term value creation and
			includes strategies on economic, environmental and social
			considerations underpinning sustainability.
		• "Corporate Mission, Vision and Our Core Values" are adopted
			across the Company to promote and implement good corporate
			culture within the Company which reinforces ethical, prudent and
			professional behaviour.
		• Risk Management and Internal Control Framework for the Group
			encompasses the Board & Management's oversight in risk
			management of the Group; and ensures Group's business
			objectives are supported by a sound strategy that is directed by a
			clear risk appetite statement approved by the Board.
		• To	ensure the Management has the	necessary	skills and
			experience, the Nomination & Remuneration Committee, in
			assisting the Board, had carried out annual assessment on fit and
			proper of the Key Responsible Persons as per internal policy. The
			Board has appointed an independent consulting firm, KPMG Risk
			& Consulting Sdn Bhd, in 2021 to conduct the assessment on the
			all the directors, Board as a whole and the respective Board
			Committees.
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• The Board Succession Plan has been put in place in identifying suitable candidates and in assessing the competencies of the new directors to ensure that they bring to the Board the required skills and experience to fill the defined gaps.
• Sustainability and Integrated Reporting Committee, comprised of the Management and executives, has established a formal governance structure for the Group's sustainability activities, including formalising the various process therein, for example, the materiality assessment and stakeholder engagement process.
• LPI and its subsidiary have adopted Business Resumption Continuity Plan (BRCP), and carry out the testing on Business Continuity Plan and Disaster Recovery Plan twice yearly, in accordance with BRCP.
• The Management's proposals which require the Board's approval would be tabled at Board meetings for discussion and approval prior to implementation. Relevant reports would be tabled to the Board for noting.
• The quarterly financial reports are always tabled to the Board within 1 month from the end of every quarter. The Audit Committee would ensure the quarterly reports are accurate before recommend to the Board for approval.
• The Risk Management and Compliance Committee, in assisting the Board, submits the periodic reports on the risks positions of the Group and notes the minutes of the Risk and IT Committee of the subsidiary, Lonpac Insurance Bhd.
• Integrated Annual Report is the key channel of communication with stakeholders. Another important avenue for communication and dialogue is the Annual General Meeting of the Company. Primary contacts for Investor Relations are disclosed in Integrated Annual Report and the website at www.lpicapital.com.

Explanation for	:
departure

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

Measure:

Timeframe:

3

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
Explanation on	:	The Chairman, Tan Sri Dato' Sri Dr. Teh Hong Piow, in leading the Board
application of the		in its collective oversight of management, is responsible for the
practice		effective overall functioning of the Board. In fulfilling this role, the
		Chairman :-
		• manages the interface between Board and Management and
		provides support and guidance to Management Officers to help
		facilitate management succession planning.
		• grooms and mentors Management Officers to achieve
		consistently high levels of professionalism and excellent
		performance.
		• provides leadership to the Board and is responsible for the
		developmental needs of the Board.
		• ensures that appropriate procedures are in place to govern the
		Board's operation.
		• leads the Board in establishing and monitoring good corporate
		governance practices in the Company.
Explanation for	:
departure

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

Measure:

Timeframe:

4

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
Explanation on	:	The Chairman, Tan Sri Dato' Sri Dr. Teh Hong Piow and the Chief
application of the		Executive Officer (CEO), Mr Tan Kok Guan, are holding separate position
practice		and	their respective roles & responsibilities are governed in the
		Company's Board Charter.
		The role of the Chairman is disclosed in Practice 1.2 of this report.
		The CEO/ Executive Director is responsible for :-
		•	the business and day-to-day management of the Company;
		•	providing leadership to Management;
		•	formulating strategic vision and business directions for the
			Company;
		•	developing and implementing corporate strategies to meet
			performance targets without neglecting longer-term growth
			opportunities of the Company;
		•	ensuring that Board decisions and policies set for the
			Management by the Board are implemented effectively; and
		•	keeping the Board well informed of salient aspects and issues
			concerning the Company's operations and ensuring that adequate
			management reports are submitted to the Board.
Explanation for	:
departure

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

Measure:

Timeframe:

5