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Jul 5 2012 onwards

MKT App 4 Corporate Governance Best Practice Standards



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The definitive version of DFSA handbook text is the PDF version as that is the text of the instrument as made and published by the DFSA.

General

1. This Appendix sets out, by way of Guidance, best practice standards relevant to each of the Corporate Governance PrinciplesG (the "Principles") set out in section 3.2. While the PrinciplesG have the status of RulesG that apply to a Reporting EntityG , the standards in this document are best practice standards that may be adopted by a Reporting EntityG to achieve compliance with the PrinciplesG .
2. A Reporting EntityG to which the PrinciplesG apply is required under Rule 3.2.10 to state in its annual report whether the best practice standards have been adopted. In circumstances where a Reporting EntityG has not fully adopted or only partially adopted the best practice standards, it needs to explain in its annual report why the standards were not fully adopted or adopted only partially and what actions, if any, it has taken to achieve compliance with the PrinciplesG .
3. Article 39(1) of the Law provides that a Reporting EntityG must have a corporate governance framework which is adequate to promote prudent and sound management of the Reporting EntityG in the long-term interest of the Reporting EntityG and its shareholders. Accordingly, in providing its explanation in the annual report as noted in paragraph 2,, a Reporting EntityG should aim to illustrate how its actual practices achieve compliance with the outcomes intended by Article 39(1) of the Law and the Principles, and thereby contribute to prudent and sound management of the Reporting EntityG .
4. The annual report required under Rule 3.2.10 must include a statement by the Board of DirectorsG (the "Board"), stating whether or not, in its opinion, the corporate governance framework of the Reporting EntityG is effective in achieving the outcome required by Article 39(1) and promoting compliance with the Principles, with supporting information and assumptions, and qualifications if necessary. As the PrinciplesG are the core of the corporate governance framework, the way in which they are applied should be the central question for the BoardG as it determines how the Reporting EntityG conducts its affairs under its directorship in accordance with the letter and spirit of the applicable requirements including the PrinciplesG and the standards.
5. The "comply or explain" approach reflected in the standards recognises that there is more than one way to comply with the Principles to achieve sound and prudent governance of the Reporting EntityG . It also gives the Reporting EntityG the flexibility to tailor its governance practices to achieve effective outcomes taking into account the nature, size and complexity of its business. For example, a Reporting EntityG may have a small BoardG to reflect the small and less complex nature of its business, as opposed to a larger and more complex business which requires a larger BoardG . It may not be possible to have a large number of committees of the small BoardG to undertake the functions of committees discussed in this Appendix. In such cases, the BoardG as a whole may undertake all these functions, or alternatively, combine the roles of committees as appropriate.
6. Where the standards set out in this Appendix are not adopted due to particular circumstances of the Reporting EntityG , the reasons for deviating from the standards should be explained clearly and carefully in the Reporting Entity'sG annual report, thereby providing shareholders' the opportunity to make well informed decisions with regard to their voting and the exercise of their rights.
7. The standards in this Appendix are not exhaustive and hence a Reporting EntityG may implement any additional measures as required in order for it to comply with the Principles and contribute to sound and prudent governance of the entity.
8. For the purposes of this Appendix "Senior Management" includes any individual who either alone or jointly has ultimate responsibility for the day to day management, supervision and control of one or more (or all) parts of a Reporting Entity'sG business. Consistently with this, the BoardG should adopt a definition of "senior management" that includes the first layer of management below the BoardG .

Principle 1 — Board of directors

Rule 3.2.3

"Every Reporting EntityG must have an effective Board of DirectorsG ("the Board") which is collectively accountable for ensuring that the Reporting Entity'sG business is managed prudently and soundly."
9. The role of the Board of DirectorsG ("Board") is to provide leadership of the Reporting EntityG within a framework of prudent and effective controls which enable risks to which the Reporting EntityG is exposed to be identified, assessed and effectively managed.
10. The BoardG should set the Reporting Entity'sG business and strategic objectives and risk parameters, ensure that the necessary financial and human resources are in place for the Reporting EntityG to meet those objectives, and review management performance in achieving those objectives and outcomes. For this purpose, the BoardG should:
a. determine the nature and extent of the significant risks it is willing to take in achieving the relevant strategic objectives; and
b. set the Reporting Entity'sG values and standards and ensure that its obligations to its stakeholders are clearly understood and met.
11. The BoardG should meet sufficiently regularly to discharge its duties effectively. There should be a formal schedule of matters specifically reserved for its decision.
12. The mandate, composition and working procedures of the BoardG should be well defined.
13. The annual report of the Reporting EntityG should include a statement of how the BoardG operates and it should also set out the number of meetings of the BoardG .

Principle 2 — Division of responsibilities

Rule 3.2.4

"The BoardG must ensure that there is a clear division between the Board'sG responsibility for setting the strategic aims and undertaking the oversight of the Reporting EntityG and the Senior Management's responsibility for managing the Reporting Entity'sG business in accordance with the strategic aims and risk parameters set by the BoardG ."

Board and Senior Management

14. The division of responsibilities between the BoardG and the Senior Management of the Reporting EntityG should be clearly established, set out in writing, and agreed to by the BoardG . In assigning duties, the BoardG should ensure that no one individual has unfettered powers in making decisions. It should also ensure that there is a clear segregation of the functions of:
a. the oversight of the management by the BoardG ; and
b. the management of the Reporting Entity'sG business by the Senior Management in accordance with the strategic aims and risk parameters set by the BoardG .
15. BoardG members may include individuals undertaking Senior Management functions. For example, the chief executive of a Reporting EntityG may also be a BoardG member. Where this is the case, the BoardG should ensure that when assessing the performance of the Senior Management, the independence and objectivity of that process is achieved through appropriate mechanisms, such as the assignment of such a task to a non-executive DirectorG of the BoardG or a committee comprising a majority of non-executive DirectorsG .

Chairman and chief executive

16. In order to ensure that the Board'sG function of providing effective oversight of the management of the Reporting EntityG is not compromised, it is important that the role of the chairman of the BoardG and the role of the chief executive of the Reporting EntityG should not be held by the same individual.
17. However, if the BoardG decides that the chief executive should also hold the position of the chairman of the BoardG , there should be effective measures to ensure that the BoardG is able to properly discharge its function of providing effective oversight of the management of the business of the Reporting EntityG by its Senior Management. For example, the performance assessment of the chief executive and other members of the Senior Management should be undertaken by a non-executive DirectorG of the BoardG (such as the senior independent DirectorG ) or a committee comprising a majority of non-executive Directors who report to the BoardG directly on their assessment, and also, prior approval by shareholders of the appointment of the chief executive as chairman of the BoardG .
18. Except where the positions of the chairman of the board and the chief executive are held by the same PersonG , the division of responsibilities between the chairman and chief executive should be clearly established, set out in writing and agreed to by the BoardG .
19. The chairman should be responsible for providing leadership of the BoardG , ensuring its effectiveness in all aspects of the Board's role and setting its agenda.
20. Except where the positions of the chairman of the BoardG and the chief executive are held by the same individual, the chairman of the BoardG should meet the independence criteria set out in paragraph 31.
21. The annual report of the Reporting EntityG should:
a. identify the chairman, the deputy chairman (where there is one) and the chief executive; and
b. include a high level statement of which types of decisions are to be taken by the BoardG and which are to be delegated to the Senior Management.

Principle 3 — Board composition and resources

Rule 3.2.5

"The BoardG and its committees must have an appropriate balance of skills, experience, independence and knowledge of the Reporting Entity'sG business, and adequate resources, including access to expertise as required and timely and comprehensive information relating to the affairs of the Reporting EntityG ."

Balance of skills and independence

22. A major consideration that underpins the effectiveness of the BoardG is the availability at the BoardG level of the relevant skills, expertise and resources as are necessary to discharge the BoardG functions, taking due account of the nature, scale and complexity of the business of the Reporting EntityG .
23. It may well be that no single DirectorG has all the knowledge, skills and expertise needed by a BoardG to discharge its functions. The BoardG should have an appropriate number and mix of individuals to ensure that there is an overall adequate level of knowledge, skills and expertise commensurate with the nature, scale and complexity of the business of the Reporting EntityG .
24. In order to ensure that the BoardG is equipped with the necessary skills, expertise and resources appropriate to the business of the Reporting EntityG , there should be a formal, rigorous and transparent procedure for the appointment of DirectorsG to the BoardG . Appointments to the BoardG should be made on merit and against objective criteria, with due regard to the benefits of diversity on the BoardG . Care should be taken to ensure that appointees have enough time available to devote to the job. This is particularly important in the case of chairmanships.
25. All DirectorsG should be submitted for re-appointment at regular intervals, subject to continued satisfactory performance. The BoardG should ensure planned and progressive refreshing of the BoardG to ensure the on-going effectiveness of the BoardG , particularly the objectivity of the decision making by the BoardG and maintaining the skills and expertise as relevant to the Reporting Entity'sG business.
26. All DirectorsG should be subject to election by shareholders at the first annual general meeting after their appointment, and to re-election thereafter at intervals of no more than three years. The BoardG should satisfy itself that there is adequate succession planning in respect of BoardG membership and the Senior Management, so as to ensure an orderly and smooth change-over of positions whilst maintaining an appropriate balance of skills and experience within the Reporting EntityG and on the BoardG .

Chairman

27. For the appointment of a chairman, there should be a job specification, and an objective assessment against the relevant criteria including an assessment of the time commitment expected, recognising the need for availability in the event of crises. Generally, the nomination committee should undertake this function. A chairman's other significant commitments should be disclosed to the BoardG before appointment and included in the annual report. Changes to such commitments should be reported to the BoardG as they arise, and their impact explained in the next annual report.
28. The chairman should ensure that new DirectorsG receive an appropriate induction on joining the BoardG . The chairman should ensure that the DirectorsG continually update their skills and their knowledge and familiarity with the Reporting EntityG required in fulfilling their role both on the BoardG and its committees. All DirectorsG should have appropriate knowledge of the Reporting EntityG and should be provided with adequate access to its operations and staff to carry out their respective responsibilities.
29. The Reporting EntityG should provide the necessary resources for developing and updating its Directors'G knowledge and capabilities. The chairman should regularly review and agree with each DirectorG their training and development needs.

Executive and non-executive directors

30. The BoardG should include a balance of executive and non-executive DirectorsG (including independent non-executive DirectorsG ). No individual or small group of individuals should be able to dominate the Board's decision making. At least one third of the BoardG should comprise non-executive DirectorsG , of which at least two non-executive DirectorsG should be independent.
31. The BoardG should consider a non-executive DirectorG to be "independent" if that DirectorG meets, upon an assessment, objective criteria of independence set by the BoardG . Such independence criteria should encompass independence in character and judgement of the individual by having no commercial or other relationships or circumstances which are likely to affect or could appear to impair his judgement in a manner other than in the best interests of the Reporting EntityG . In making the assessment of independence against such criteria, the BoardG should consider matters such as whether the PersonG :
a. has already served as a member of the BoardG for a significant period;
b. has been an EmployeeG of the Reporting EntityG or a member of the GroupG within the last five years;
c. has or has had, within the last three years, a material business relationship with the Reporting EntityG , either directly or as a partner, shareholder, DirectorG or senior EmployeeG of another body that has such a relationship with the Reporting EntityG ;
d. receives or has received, in the last three years additional remuneration or payments from the Reporting EntityG apart from a Director'sG fee, or participates in the Reporting Entity'sG share option, or a performance-related pay scheme, or is a member of the Reporting Entity'sG pension scheme;
e. is or has been a DirectorG , PartnerG or EmployeeG of a firm which is the Reporting Entity'sG external auditor;
f. has close family ties with any of the Reporting Entity'sG advisors, DirectorsG or senior EmployeesG ;
g. holds cross DirectorshipsG or has significant links with other DirectorsG through involvement in other companies or bodies; or
h. represents a significant shareholder.
32. The terms and conditions of appointment of non-executive DirectorsG should be made available for inspection by any PersonG at the Reporting Entity'sG registered office during normal business hours. The letter of appointment should set out the expected time commitment. Non-executive DirectorsG should undertake that they will have sufficient time to meet what is expected of them. Their other significant commitments should be disclosed to the BoardG before appointment, with a broad indication of the time involved. The BoardG should be informed of subsequent changes.
33. The annual report of the Reporting EntityG should identify each non-executive DirectorG it considers to be independent, the senior independent DirectorG , and the chairman and members of each of the BoardG committees. It should also state the relevant skills and expertise which each DirectorG brings to the BoardG and set out the number of meetings of each of the committees and individual attendance by DirectorsG .
34. As part of their role as members of the BoardG , non-executive DirectorsG should constructively challenge and help develop proposals on business objectives and strategy for achieving those objectives. Non-executive DirectorsG should scrutinise the performance of Senior Management against agreed goals and objectives and monitor the reporting of their performance.

Nomination committee

35. The BoardG should establish and maintain a nomination committee to lead the process for appointments and make recommendations to the BoardG relating to the appointment of BoardG members and the Senior Management. A majority of members of the nomination committee should be independent non-executive DirectorsG . The chairman of the nomination committee should be an independent non-executive DirectorG .
36. The mandate, composition and working procedures of the nomination committee should be well defined. The nomination committee should make available on the website of the Reporting EntityG its written terms of reference explaining its role and the authority delegated to it by the BoardG .
37. The nomination committee should evaluate the balance of skills, knowledge, independence and experience on the BoardG and, in the light of this evaluation, prepare a description of the role and capabilities required for a particular appointment.
38. A separate section of the annual report of the Reporting EntityG should describe the work of the nomination committee, including the process it has used in relation to BoardG appointments. An explanation should be given if neither an external consultancy nor an open advertising process has been used in the appointment of the chairman or a non-executive DirectorG of the BoardG .

Secretary of the Reporting EntityG

39. The responsibilities of the Reporting Entity'sG secretary should clearly include, under the direction of the chairman, ensuring good information flows within the BoardG and its committees and between Senior Management and non-executive DirectorsG , as well as facilitating induction and assisting with professional development of BoardG members as required. The secretary should also be responsible for ensuring that BoardG procedures are fully complied with, and advising the BoardG through the chairman on all governance matters.
40. Both the appointment and removal of the secretary of the Reporting EntityG should be a matter for the BoardG as a whole.

Information and support

41. All DirectorsG should have access to accurate, timely and clear information relating to the business and affairs of the Reporting EntityG to enable them to discharge their duties, taking due account of the roles undertaken by such members. The chairman is responsible for ensuring that the DirectorsG receive such information. Senior Management has an obligation to provide such information, but DirectorsG should seek clarification or amplification where necessary. All DirectorsG should also have access to the advice and services of the secretary of the Reporting EntityG , as he is responsible to the BoardG for ensuring compliance with the BoardG procedures.
42. The BoardG should ensure that DirectorsG , especially non-executive DirectorsG , have access to independent professional advice at the Reporting Entity'sG expense where necessary to enable them to discharge their respective roles and responsibilities. Committees of the BoardG should also be provided with sufficient resources including information to carry out their role and responsibilities effectively.

Performance evaluation

43. The BoardG should undertake a formal and rigorous evaluation of its own performance and that of its committees and individual DirectorsG at least annually.
44. The chairman of the BoardG should act on the results of the performance evaluation by recognising the strengths and addressing the weaknesses of the BoardG and making any changes to the composition of the BoardG as required.
45. The BoardG should state in the annual report how performance evaluation of the BoardG , its committees and its individual DirectorsG has been conducted.

Principle 4 — Risk management and internal control systems

Rule 3.2.6

"The BoardG must ensure that the Reporting EntityG has an adequate, effective, well-defined and well-integrated risk management, internal control and compliance framework."
46. The BoardG should, at least annually, conduct a review of the effectiveness of the Reporting Entity'sG risk management, internal control and compliance framework ("systems and controls") and should report to the shareholders that it has done so. The review should cover all aspects of material controls, including management, financial, operational and compliance controls and risk management systems. The BoardG may satisfy this requirement by instructing an external auditor to undertake the review and report to it on its outcome. They should satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and effective.
47. The BoardG should establish formal and transparent arrangements for considering how it should apply the financial reporting and internal control systems, and for maintaining an appropriate relationship with its auditors.
48. The BoardG should establish policies and procedures for the identification and oversight and management of material business risks and disclose a summary of those policies and procedures in its annual report. The BoardG should also ensure that Senior Management implements the requisite risk management and internal control systems to manage material risks.

Audit committee

49. The BoardG should establish and maintain an audit committee to monitor and review the Reporting Entity'sG internal audit function and other internal controls. The main roles and responsibilities of the audit committee should be set out in written terms of reference, be available on the website of the Reporting EntityG and include at least the following:
a. monitoring the integrity of the financial statements of the Reporting EntityG and any formal announcements relating to the Reporting Entity'sG financial performance and reviewing significant financial reporting judgements contained in them;
b. reviewing the Reporting Entity'sG internal financial controls and, unless expressly addressed by a separate risk committee of the BoardG or the BoardG itself, internal controls and risk management systems;
c. monitoring and reviewing the effectiveness of the Reporting Entity'sG internal audit function;
d. making recommendations to the BoardG in respect of the appointment, re-appointment, removal and terms of engagement, including remuneration, of the external auditor;
e. reviewing and monitoring the external auditor's independence and objectivity and the effectiveness of the audit process;
f. developing and implementing policy on the engagement of the external auditor to supply non -audit services; and
g. reviewing the adequacy of arrangements by which staff of the Reporting EntityG may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters to ensure that arrangements are in place for the proportionate and independent investigation of such matters and for appropriate follow-up action.
50. The BoardG should appoint at least two independent non-executive DirectorsG to the audit committee. At least one of the independent non-executive DirectorsG appointed to the audit committee should have recent and relevant financial expertise. The chair of the audit committee should be an independent non-executive DirectorG .
51. A separate section of the annual report should describe the work of the audit committee in discharging its responsibilities. The annual report should also explain to shareholders how, if the auditor provides non-audit services, auditor objectivity and independence is safeguarded.

Principle 5 — Shareholder rights and effective dialogue

Rule 3.2.7

"The BoardG must ensure that the rights of shareholders are properly safeguarded through appropriate measures that enable the shareholders to exercise their rights effectively, promote effective dialogue with shareholders and other key stakeholders as appropriate, and prevent any abuse or oppression of minority shareholders."
52. The BoardG as a whole has responsibility for ensuring that a satisfactory dialogue with shareholders takes place. Such dialogue should be based on the mutual understanding of objectives and provision of adequate information relating to the Reporting EntityG including financial information, and how the business and affairs of the Reporting EntityG are carried out.
53. The BoardG should hold a general meeting of shareholders at least annually.
54. The BoardG should use the annual general meeting to communicate with shareholders on important aspects of the Reporting Entity'sG business and affairs and encourage their participation. Shareholders should have the opportunity to ask questions of the BoardG , to place items on the agenda of general meetings and to propose resolutions.
55. At any general meeting, the Reporting EntityG should propose a separate resolution on each substantial separate issue, and should in particular propose a resolution at the annual general meeting relating to the report and accounts. For each resolution, proxy appointment forms should provide shareholders with the option to direct their proxy to vote either for or against the resolution or to withhold their vote.
56. The chairman should arrange for the chairs of the audit, remuneration, and nomination committees to be available to answer questions at the annual general meeting and for all DirectorsG to attend either in PersonG or by electronic means.
57. Whilst recognising that most shareholder contact is with the chief executive and finance DirectorG , the chairman and other DirectorsG , including non-executive DirectorsG , as appropriate should maintain sufficient contact with major shareholders to understand their issues and concerns. The BoardG should keep in touch with shareholder opinion using means which are most practical and efficient taking into account the nature, scale and complexity of its operations and the nature of its shareholder base. The BoardG should use its website as a forum for the posting of information such as new strategies, calendar for important meetings and other events.
58. The chairman should ensure that the views of shareholders are communicated to the BoardG as a whole. In addition, the chairman should discuss governance and strategy of the Reporting EntityG at least with its major shareholders. Non-executive DirectorsG should be offered the opportunity to attend meetings with major shareholders and should expect to attend such meetings especially if requested by major shareholders.
59. The BoardG should ensure that no steps are taken which may prevent shareholders consulting with other shareholders on issues concerning their basic shareholder rights, subject to exceptions to prevent abuse. Similarly, the BoardG should also protect minority shareholders from any oppressive or abusive action by controlling or major shareholders.

Other stakeholders

60. While shareholders of the Reporting EntityG form the major stakeholder group of the Reporting EntityG , the BoardG should also ensure that there are adequate channels of communication with its other key stakeholders as appropriate to the nature, scale and complexity of its business operations, and the environment in which it operates. Such stakeholders may include employees, creditors and business customers of the Reporting EntityG . The BoardG should make an assessment of the level of information that should generally be made available to the public, or to any particular group of stakeholders, relating to the affairs of the company, and how best to make use of its website or any other channels of communication as appropriate to disseminate relevant information.

Principle 6 —Position and prospects

Rule 3.2.8

"The BoardG must ensure that the Reporting Entity'sG financial and other reports present an accurate, balanced and understandable assessment of the Reporting Entity'sG financial position and prospects by ensuring that there are effective internal risk control and reporting requirements."

61. The Board's responsibility to present a true, balanced and understandable assessment of its financial position and prospects should extend to interim and other price-sensitive public reports and reports to regulators as well as to information required to be presented by law.
62. The DirectorsG should explain in the annual financial report their responsibility for preparing that report and accounts, and there should be a statement by the auditor about their reporting responsibilities.
63. The DirectorsG should include in the annual report an explanation of the basis on which the Reporting EntityG generates or preserves value over the longer term (the business model) and the strategy for delivering the objectives of the Reporting EntityG .
64. The DirectorsG should report in annual and half yearly financial statements that the business is a going concern, with supporting assumptions or qualifications as necessary.

Principle 7 — Remuneration

Rule 3.2.9

"The BoardG must ensure that the Reporting EntityG has remuneration structures and strategies that are well aligned with the long-term interests of the entity."

Directors' remuneration

65. Levels of remuneration of DirectorsG should be sufficient to attract and retain DirectorsG of appropriate quality, taking into account the nature, scale and complexity of the business of the Reporting EntityG , and to provide effective direction and leadership to the Reporting EntityG in managing its business and affairs successfully. In doing so, the Reporting EntityG should avoid paying more than is necessary for this purpose.
66. The performance-related elements of remuneration should form an appropriate proportion of the total remuneration package of executive DirectorsG and should be designed to promote the long term interests and viability of the Reporting EntityG , to align their interests with those of shareholders and other key stakeholders and to give these DirectorsG appropriate incentives to perform at the highest levels.
67. Levels of remuneration for non-executive DirectorsG should reflect the time commitment and responsibilities of their respective roles and the objectivity of judgement in their decision making required by them. In considering whether to grant share options to non-executive DirectorsG , a Reporting EntityG should consider whether the granting of the share options will impair the objectivity or independence of the non-executive Directors'G decision making.
68. Generally, where non-executive Directors'G remuneration include share options, rights resulting from the exercise of share options should be subject to appropriate retention and vesting periods, generally until at least one year after the non-executive DirectorG leaves the BoardG .
69. There should be a formal and transparent procedure for developing policies on executive remuneration and for fixing remuneration packages of individual DirectorsG . No DirectorG should decide his own remuneration, and ideally, all Directors'G remuneration should be subject to recommendations of the remuneration committee if one exists, and otherwise upon the advice of an external consultant.

Remuneration committee

70. The BoardG should establish and maintain a remuneration committee to assess the remuneration of DirectorsG (including the chairman). The remuneration committee should comprise at least three members, with a majority of those members being independent non-executive DirectorsG . The chair of the committee should be an independent non-executive DirectorG . In addition, the chairman of the BoardG may also be a member but not the chair of the committee.
71. The remuneration committee should have delegated responsibility for setting remuneration for all executive DirectorsG and the chairman. The committee should also recommend and monitor the level and structure of remuneration for the Senior Management and other key control functionaries such as the risk or compliance officers and auditors, to ensure that the independence and objectivity of the decision making by such control functionaries is not compromised or impaired by their remuneration structure. An important consideration that should be taken into account in setting remuneration of key control functionaries of the Reporting EntityG is that their remuneration is not substantially linked to the profits generated by business or trading units whose activities are subject to monitoring and oversight by those functionaries.
72. The mandate, composition and working procedures of the remuneration committee should be well defined. The remuneration committee should make available on the website of the Reporting EntityG its written terms of reference explaining its role and the authority delegated to it by the BoardG .
73. The remuneration committee should also be responsible for appointing any external consultants in respect of executive Directors'G remuneration. Where external consultants are appointed, a statement should be made available of whether they have any other connection with the Reporting EntityG .
74. The BoardG itself, or where required by the articles of association or other constituent documents, the shareholders, should determine the remuneration of the non-executive DirectorsG .
75. The annual report of the Reporting EntityG should contain sufficient information relating to the overall remuneration policy and strategy of the Reporting EntityG to demonstrate that the remuneration, particularly of the executive DirectorsG and Senior Management to properly link rewards to corporate and individual performance and outcomes, and to ensure that any performance-based remuneration granted is structured in such a way so as to not induce inappropriate risk taking by such individuals.
Derived from RM81/2011 (Made 30th November 2011). [VER1/11-11]