Overview of Fraser and Neave Holdings and Nestle Finance Essay

The chairman and CEO of F&N are two different people. Y.A.M Teng Ku Syarif Bendahara Perlis Syed Badarudin Jamalullail is the F&N's chairman, while the CEO of the company is Mr Tan Ang Meng.

Independent non-executive directors of F&N make up of at least one-third of the board membership. There are 4 independent non-executive directors of 11 board members. All directors are non-executive directors except the CEO.

The non-executive directors of F&N are capable, skill and experience. They full of experience and have varied skills that relevant to the company business operations. They manage the business affairs of the company and approve strategic plans, key business initiatives as well as major investment and funding decisions. They also assign the conduct of daily operating affairs to the CEO.

The board also had identified a senior independent non-executive director in the annual report. Leslie Oswin Struys is the senior independent non-executive director of F&N and it had been stated in the annual report. He was appointed to act as an additional communication channel for corporate governance affairs in the company.

Size of the boards was examined by the company to determine the impact of the number upon its effectiveness. The board has 11 directors including non-executive and executive directors. Of the eleven directors, six are nominees of the two largest shareholders and four are independent as well as one non-executive director, CEO. The Board is broadly balanced that reflect the interests of significant shareholders, management and minority shareholders in the company.

The Board held 8 board meetings in the year 2009, the details of directors' attendance was recorded. Most of the board of directors attended 8/8 of board meetings where five meetings were held at its registered office and the other three meetings were held off-site in Kuala Lumpur.

The Nominating Committee composed of four non-executive directors, three of whom are independent with the responsibility in assessing recommendations for Board appointments and Board Committees. All Nominating Committee members attended the sole meeting scheduled during the year. Proposed changes in the composition of the main Board, committees and subsidiary boards were reviewed at this meeting prior to the submission of recommendations to the Board. The directors also reviewed and kept abreast of developments in the area of board performance assessment. A formal evaluation process has been put in place to assess the effectiveness of the Board as a whole.

The Remuneration Committee of F&N was formed in May 2001, which consists of four non-executive of board members that. The Committee is responsible for reviewing succession planning, remuneration policies and practices of the company. They also supervise the allocation of share options to employees under the Company's ESOS scheme. Two Remuneration Committee meetings were held during the year.

Procedures relating to the re-election of directors are accorded in the Company's Articles of Association. New directors are subject to election at the Annual General Meeting as following the first appointment which is Huang Hong Peng was appointed on 1 March 2009. In addition, one-third of the directors are required by rotation to submit themselves for re-election by shareholders at every AGM of the Company.

During the year 2009, the directors of the Company attended various external and internal training programs and seminars such as Directors' Continuing Education Program, Mandatory Accreditation Program, The Global Economy in the Aftermath of the Financial Crisis, and Risk Management Program. From time to time, the directors attend training to keep abreast with current developments as well as the new statutory and regulatory requirements.

The Audit Committee of F&N comprise five directors, the majority of whom are independent, including the Chairman and at least one member shall be an accountant. The Audit Committee's chairman was Tan Sri Dato' Dr Lin See Yan. He was supported by a majority of independent Board members. Mr Anthony Cheong Fook Seng is a member with an accounting qualification. A total of four meetings were held and all the Audit Committee members attended all the meetings during the year.

Nestlé (Malaysia) Berhad

The chairman and CEO of Nestle is two different person. Tan Sri Dato' Seri Syed Zainol Anwar Jamalullail is the Chairman whereas Peter Robert Vogt is the Managing Director.

The board composed of more than one-third of independent non-executive directors. The Board has eight members while four members are independent non-executive directors.

The non-executive directors of Nestlé are capable, skill and experience The non-executive directors have diverse experience including professional backgrounds, representing a high level of business, international and financial knowledge, which is core to the setting of strategies, monitoring of strategy achievement, ultimately leading.

Nestlé does not have a senior independent non-executive director but consist a chairman of board of directors which is Tan Sri Dato' Seri Syed Zainol Anwar Jamalullail.

The size of the Board of Directors was reviewed by Nestle to determine the impact of the number on its effectiveness. The Board of Directors is very well balanced between the number of executive and non-executive directors and between independent and non-independent directors. The Independent Non-Executive Directors are able to provide the independent unbiased views and advice in its decision making, to ensure that the best interest of the Company, shareholders and employees, whereas the Executive Directors are responsible to ensure the implementation of the strategies and policies as resolved by the Board of Directors.

Four meetings of directors were held by the Board in the financial year. The record of attendance is all the directors have full or 100% attendance except Tan Sri Dato' Ernst Zulliger and Mohd. Rafi k Bin Shah Mohamad only attended three of four general meetings.

The Board does not consider the necessary to setting up a separate Nomination Committee as the turnover of directors is very low with only eight persons and that all proposals for appointment and resignation of directors are fully deliberated by the Board of Directors. Two nominations of new directors were fully deliberated by the Board of Directors in 2009. The nomination of Datuk Rafi ah Binti Salim as an Independent Non-Executive Director and Peter Robert Vogt was appointed as a Non-Independent Executive Director.

Non-establishment of the Remuneration Committee due to the managing director, and the finance & control executive, Marc Philippe Seiler and the non Independent non-executive Director, Dato' Frits Wout Marie van Dijk are proposed and employed directly by Nestlé S.A. Each of these directors are employees which based on contracts of expatriation employment and their remuneration package consisting of emoluments and benefits are in accordance with the remuneration practices of the worldwide Nestlé group of companies as established by the Human Resource function of Nestlé S.A. in Vevey, Switzerland. The fees and benefits paid to the Independent Non-Executive Directors including the Independent Non-Executive Chairman are proposed by the Company to the Board of Directors and during the deliberation on the amount of fees and benefits to be paid to the Non-Executive Directors, the Non-Executive Directors would abstain from discussing their own remuneration.

The re-election and re-appointed of directors are contained in Articles 90.1 and 90.2 of the Company's Articles of Association, one-third of the directors for time being shall retire from office and be eligible for re-election, provided always that all directors shall retire from office once at least in each three years but shall be eligible for re-election, to allow the shareholders the opportunity to renew their mandate at the Annual General Meeting.

As the continuous training for directors, the management updated them on a timely basis with reading material based on latest development on directors' roles and responsibilities. The managing director had attended training on "Crisis Management" as well as attended and was a speaker of "Corporate Responsibility Forum" and etc. and the finance & control executive attended the Mandatory Accreditation Programme, was a speaker on the topic of "Improving Business Performance Through Management Accounting" and conducted training on "Dynamic Forecasting and Consensus Planning". The other directors have attended trainings or conducted trainings in areas relevant to their capacity as directors from time to time.

The Audit Committee consists of five members who are all Independent, Non-Executive Directors. The post and current Chairman of the Audit Committee are both qualified chartered accountants, being members of the Malaysian Institute of Accountants. During the financial year, the Audit Committee held five meetings. A quorum established by the presence of the Chairman and at least two members in the Audit Committee meetings. The Audit Committee responsible to plan and conduct internal audits and to ensure that the Company's financial statements are prepared in accordance with applicable generally accepted accounting principles.

In conclusion, both of the companies were pursuing the best practice of corporate governance by complying with the Malaysian Code on Corporate Governance [Revised 2007] in order to protect the companies' reputation, shareholders and stakeholders.

Question

Is the chairman and the CEO is two different person?

Is the independent non executive directors make up of one third of the board?

Is the non-executive and executive directors are capable, skill and experienced?

Have the general meeting be held in the year?

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