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Recommendation for Flat Cargo

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RECOMMENDATIONS
Membership of audit committee According to the Malaysian Code of Corporate Governance, to ensure that no one individual group dominates the board’s decision making, there should be an equal number of executive and non-executive directors (inclusive of independent non-executive directors) in the Board of Directors. However, based on the hierarchy of the Board of Directors in Flat Cargo Berhad, there are more executive directors than non-executive directors. It is unhealthy scenario as non-executive directors’ views might not be taken into consideration in the company’s important decision making process as they have the minority say. On the other hand the Code for an audit committee states that there should at least be 3 members of whom the majority of them should be independent and all members should be non-executive directors. Although the audit committee of Flat Cargo Berhad reveals that the majority of the committee consist of independent directors but they are all not non-executive member. Therefore, Mr. Ali Bin Ahmad is not a suitable candidate of the committee. We should understand the roles of Executive and Non-Executive Directors. As we know, Executive Directors are the internal member of the company who are involve in decision making of the management team and daily operation. Non-Executive Directors are the outside director who may hold or may not hold a share in the company and they may be hired due to their expertise and entitled for sitting fees for attending the meeting. However, they play an important role in the company’s decision making in terms of selection of the board of directors and their remuneration. Therefore, it is strongly recommended that they reshuffle the Board of Directors composition to an equal ratio of executive and non-executive directors to comply with the Code. This course of action

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