7. LIMITS OF AUTHORITY Capital A has a Limits of Authority (“LOA”) policy in place, which defines the decision-making limits of each level of management within the Group. The LOA manual clearly outlines matters over which the Board reserves authority, in line with the Board Charter, and those delegated to the senior management. These limits cover, amongst others, authority over payments, investments, capital and revenue expenditure limits, budget approvals and contract commitments, as well as authority over non-financial matters. The LOA manual provides a framework of authority and accountability within Capital A and facilitates decision-making at the appropriate level in the organisation’s hierarchy. The latest LOA of Capital A was approved by the Board on 8 September 2021, and the LOA for the Group was subsequently updated by the senior management and approved by the Board on 29 December 2021. 8. REVIEW AND ADOPTING A STRATEGIC PLAN The Board and AC will review the operational and financial performance of Capital A as well as its subsidiaries, joint ventures and associates under the Group on a quarterly basis. Detailed reports on the airline and non-airline investee companies within the Group are tabled for review and deliberation. The Board will assess their performance against budget and the corresponding quarter of the preceding year. Furthermore, the Group’s budget and strategy meeting is chaired by the CEO of Capital A to chart the direction for the current and near-term period ahead. The CEO updates the Board quarterly on progress made in relation to the Group’s business plans, including changes and new initiatives, if any. 9. REMUNERATION AND SUCCESSION PLANNING The Company places a strong emphasis on the development and growth of its staff, fondly known as Allstars. This is evidenced by Capital A’s continuous commitment in grooming successors across the Group, in the spirit of One AirAsia. There is a Group Talent Policy in place to identify and build a robust Group talent pipeline. Talent reviews are conducted with senior management to map talent needs across the Group’s different locations and identify future leaders. The Group Talent function oversees structured talent entry and development initiatives, including leadership development programmes, coaching, cross-functional and cross-country assignments. PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT 1. AUDIT COMMITTEE The AC comprises two (2) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. It is chaired by Dato’ Mohamed Khadar bin Merican, who is an Independent Non-Executive Director and not the Chairman of the Board. The Company has a policy which requires a former key audit partner to observe a cooling-off period of at least two (2) years before being appointed as a member of the AC. During the Financial Year, no member of the AC was a former key audit partner. In the annual assessment on the suitability, objectivity and independence of the external auditors, the AC is guided by factors as prescribed under Paragraph 15.21 of the MMLR of Bursa Malaysia as well as Capital A’s External Auditor Independence Policy. The composition of the AC is reviewed annually to ensure that the Chairman and members of the AC are financially literate and can carry out their duties in accordance with the terms of reference of the AC. The AC members are expected to continuously update their knowledge and enhance their skills. Based on the performance evaluation of the AC for the Financial Year, the Board is satisfied that the Chairman and members of the AC have discharged their responsibilities effectively. The AC’s report is set out on pages 174 to 177 of the Annual Report 2021. 2. RISK MANAGEMENT, SUSTAINABILITY AND INTERNAL CONTROL FRAMEWORK Based on the performance evaluation of the RMC for the Financial Year, the Board is satisfied that the Chairman and members of the RMC have discharged their responsibilities effectively. The roles and responsibilities of the RMC were enhanced to include the oversight of sustainability initiatives and performance of the Group as resolved by the Board in December 2021. Henceforth, the committee shall be known as the Risk Management and Sustainability Committee (“RMSC”). The RMSC of the Company comprises three (3) Non-Executive Directors with a majority of Independent Directors. It is chaired by Dato’ Abdel Aziz @ Abdul Aziz bin Abu Bakar, who is a Non-Independent Non-Executive Director of the Company. The RMSC enables the Board to undertake and evaluate key areas of risk exposures and sustainability performance. Some of the primary responsibilities of the RMSC are as follows: Risk Management: (a) To oversee and recommend the Enterprise Risk Management (“ERM”) strategies, frameworks and policies of the Group; (b) To implement and maintain sound ERM frameworks, which identify, assess, manage and monitor the Group’s strategic, financial, operational and compliance risks; (c) To implement and monitor Business Continuity Plans with procedures and systems to restore critical business functions in the event of unplanned disaster; and (d) To develop and inculcate a risk awareness culture within the Group. 1 7 2 C A P I T A L A B E R H A D Corporate Governance Overview Statement (cont’d.)
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