FGV HOLDINGS BERHAD | ANNUAL INTEGRATED REPORT 2023 117 PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS KEY FOCUS AREAS EXPLANATION Independent Directors An effective board should include the right group of people, with an appropriate mix of skills, knowledge, experience and independent elements that fit the company’s objectives and strategic goals. The right board composition will ensure sufficient diversity and independence to avert ‘groupthink’ or ‘blind spots’ in the decision-making process. A Board comprising a majority of independent directors allows for more effective oversight of management. Independent Directors act as a check and balance, to review sensitive issues such as related party transactions, remuneration policies or other concerns related to ensuring equal treatment of minority shareholders. The current FGV Board’s composition shows the balance number of Independent Directors and Non-Independent Directors. Nonetheless, as a “Large Companies”, FGV shall comprise a majority Independent Directors. The MCCG 2021 provides that the Board must comprise a majority of Independent Directors where the Chairman of the Board is not an Independent Director. Data Analytics For a company to be protected against a wide range of potential risks posed to it by a wide range of potential threats that may pose to its business, a comprehensive risk management strategy can be created with the help of data analytics. Data analytics can be very useful in helping businesses respond to changing market trends that can provide insights into customer behaviour and market conditions that drive informed decision-making, optimise operations, gain a competitive edge, and enhance customer experience. Data analytics is crucial for FGV businesses and FGV to be protected against a wide range of potential risks and threats through data analytics. Review of Board Committees’ composition The composition of FGV Board Committees influences their effectiveness and performance. Hence, the selection of the committee members is made after taking into account their multiple membership, diversity, profiles, skills and training as well as their independence status. The role of Board committees has been increased as a result of the growing complexity of the business environment and the evolving nature of risks in FGV. Hence, their functions have expanded from a strictly monitoring role to providing more encompassing and forward-looking advice to the Board. Indeed, the Board may need additional support to deal with the broadening and challenging responsibilities, emerging complex risks, and more technical and specific issues. Therefore, the Board may tend to rely more on its Board committees, while decision-making remains their entire responsibility. FGV Board to review the Board Committees on regular basis to ensure the right composition of Board Committee considering the appropriate knowledge, competence and expertise to complement the existing skills of the Board. ESG Metrics ESG is a framework that helps stakeholders understand how an organisation is managing risks and opportunities related to ESG criteria. ESG takes the holistic view that sustainability extends beyond just environmental issues. In other words, they measure FGV’s ability to survive over the long term. Hence, ESG metrics and reporting strategy should be closely tied to FGV’s overall ESG strategic plan and narrative across important ESG criteria. The BEE 2023 underscored the Board’s provision of strategic guidance and effective monitoring. Notably, the Board rigorously evaluates management’s proposals, displaying acumen in deliberating and challenging recommendations. Furthermore, it ensures alignment of the Company’s integrity with regulatory requirements and internal processes, while demonstrating a consistent commitment to staying abreast of ESG developments and initiatives. Additionally, the BEE 2023 assessed the effectiveness of Board Committees, scrutinising their ToR, structure, processes, members’ accountability and responsibility, and the relationship between the Chairman and stakeholders. In April 2024, the Company Secretary presented the analysis of the BEE 2023 results and feedback from the Board and Board Committee members to the Board for further review and approval. Based on the Board Improvement Plan on the findings from BEE 2022 and the assessment from the BEE 2023,the Key Focus Areas are as follows:
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