LPI Capital : Corporate Governance Report for Integrated Annual Report 2022

CORPORATE GOVERNANCE REPORT

STOCK CODE	:	8621
COMPANY NAME	:	LPI CAPITAL BHD
FINANCIAL YEAR	:	December 31, 2022

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.

1

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 and the Co-Chairman ensured that :-
application of the			(i)	appropriate procedures are in place to govern the Board's
practice				operation and lead the Board in establishing and monitoring
				good corporate governance practices in the Company.
			(ii) 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 formulated
			strategic vision and business directions for the Company.
		• The	Directors promoted sustainability through appropriate
			environmental, social and governance considerations in the
			Company's business strategies. They also ensured 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" were 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 were supported by a sound strategy that is directed by
			a clear risk appetite statement approved by the Board.
		• 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 to ensure the
			Management has the necessary skills and experience. The Board
			Succession Plan had been put in place to identify suitable
			candidates and competencies of the new directors in ensuring
			the Board has the required skills and experience to fill the defined
			gaps.
				2

• The Enterprise Risk Management and Sustainability Department of the subsidiary of LPI Capital Bhd ("LPI") had 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, Lonpac Insurance Bhd ("Lonpac") had adopted Business Resumption Continuity Plan ("BRCP"), and carried out the testing on Business Continuity Plan and Disaster Recovery Plan twice yearly, in accordance with BRCP.
• The Management's proposals which requiring 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 were 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, Compliance and Sustainability Committee, in assisting the Board, submitted the periodic reports on the risks positions of the Group and notes the minutes of the Risk and Sustainability Committee and Compliance Committee of the subsidiary, Lonpac.
• 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 atwww.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, in leading the Board in its collective oversight of
application of the		management, was responsible for the effective overall functioning of
practice		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 and the Chief Executive Officer ("CEO"), are holding
application of the		separate position and their respective roles & responsibilities are
practice		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