Governance and Corporate Responsibility

Corporate Governance Overview

• Corporate governance is a system of rules, practices, and processes by which a company is directed and controlled.
• It primarily involves the relationship between the board of directors, shareholders, and other stakeholders.

Role of the Board of Directors

• The board of directors runs the company on behalf of the shareholders.
• Directors must act within their legal powers and promote the company's success, aligning their actions with shareholder interests.

Statutory Duties of Directors (Section 7.1 of Company's Act 2006)

1. Act Within Powers

• Directors must only operate within their legal authority.

1. Promote Company Success

• Directors must prioritize actions that benefit the company, avoiding detrimental decisions.

1. Exercise Independent Judgment

• Decisions should be made based on sound reasoning rather than external pressures.

1. Diligence

• Directors must employ reasonable skill, care, and diligence in their roles.

1. Avoid Conflicts of Interest

• Personal interests should not interfere with duties to the company.

1. Do Not Accept Benefits from Third Parties

• Acceptance of bribes or similar advantages is prohibited.

1. Declare Interests in Transactions

• Any personal interests in company activities must be disclosed.

Long-Term Planning

• Directors should aim for long-term success rather than short-term gains.
• This includes cultivating beneficial relationships and understanding the impact of business decisions.
• Foster good community relations and protect the environment.

Financial Responsibilities

• Directors must prepare financial statements in compliance with local and international standards.
• Statements must be accurate and free from material misstatements due to error or fraud.
• Implementation of internal controls and segregation of duties is necessary to prevent fraudulent activities and errors.

Compliance with Laws and Regulations

• Directors are responsible for ensuring the company adheres to local and relevant laws governing business conduct.

Going Concern Principle

• The "going concern" status indicates that the business will continue its operations for the foreseeable future, not expected to cease operations imminently.
• Directors must assess and report on the company's ability to continue as a going concern, based on financial health and management's plans.

Balanced Assessment of Company Position

• Directors should provide a fair and understandable evaluation of the company's financial and operational status to stakeholders.