1. Code of Conduct
The subsidiary hall have a formal Code of Conduct which defines acceptable behaviour for the Board members, management and staff. The Board members shall lead by example and observe the highest standards of conduct, to serve as role models for others within the subsidiary.
The Code of Conduct shall be applicable to all employees. Policies and procedures shall established to cover at least the following areas:-
i. Conflict of interests (see section 2)
ii. Outside Employment
A proper approval system shall be in place for subsidiary’s employees who take part in outside activities which may affect or bring about conflict of interests to the employees’ official duties.
iii. Post Employment
Exit procedures for employees leaving the organisation, either due to termination, resignation, end-of-contract or retirement, ensuring that confidentiality of information continues to be up held by the leaving employees and subsidiary’s assets, if any, are returned.
iv. Lending and borrowing money
Subsidiary shall provide clear terms and conditions to advise employees on who they can lend money to or borrow money from, and the situations when they can lend or borrow money.
v. Financial embarrassment
Subsidiary shall ensure that their employees maintain high standards of personal conduct and integrity by not falling into any financial embarrassment. Definition for financial embarrassment, the disciplinary actions and guidelines for the declaration of indebtedness shall be clearly communicated and documented by the subsidiary.
vi. Gifts and entertainment
Establish guidelines stating that gifts and entertainment shall, as far as possible, be rejected. If rejection is not possible, employees shall make a declaration on the gifts received, and any entertainment shall be returned in kind to the related parties.
vii. Disciplinary procedures
Establish procedures of investigation and actions to be taken when employees are suspected of misconduct. The corresponding disciplinary actions to be handled out to the employee shall also be clearly documented.
viii. Confidentiality of Information
Subsidiary shall ensure that its employees are bound contractually from revealing secret, confidential or restricted information of the organisation during and after their tenure with the organisation.
ix. Media Communication
Subsidiary shall establish guidelines for employee’s compliance on how they should conduct themselves when managing the various forms of media, including social media.
The Code of Conduct shall be communicated to subsidiary Board members, management and staff in the subsidiary; new Board members, management and staffs shall sign a written declaration that they have read and understood the code. There shall also be an effective monitoring and enforcement system to ensure compliance with the Code.
2. Conflict of Interest
Conflict of interests refers to an actual of perceived conflict between duty of the employee to act in the interests of the subsidiary, and their private interests in business or relationships outside the subsidiary. Example include:-
- Having an employment, directorship or material shareholding in an external entity which may be in conflict with the interests of the subsidiary; and
- Making official decisions which are influenced by any personal relationship
The Board shall establish a conflict of interests’ policy for Board members, management and staff, and put in place mechanism to ensure that they are not influenced by conflict of interests in carrying out the work, whether real or perceived. At the minimum, the conflict of interests’ policy shall:-
- Define what is considered as conflict of interests, including deemed interests, and provide examples of such situations;
- Prescribe procedures for disclosure of any conflict of interests (e.g. timing and nature of disclosure of interests); and
- Include mechanisms for recognising and dealing with any conflict of interests (e.g. annual declaration of conflict of interests, disqualification from decision –making process where conflict of interest exist).
The Board of Directors is also subject to Company Act Section 156(1), which states that every director of a company who is in any way, whether directly or indirectly, interested in a transaction or proposed transaction with the subsidiary shall as soon as practicable after the relevant facts have come to his knowledge declare the nature of his interest at a meeting of the directors of the subsidiary. The directors shall declare and abstain from making transactional decisions at subsidiary Board meetings which are in conflict with their role in LTA, other subsidiary Boards or companies.