It is mandatory that all public listed companies are to adhere to the Malaysia Code of Corporate Governance; however, the undermining problem here is that the composition of the board of directors and audit committee does not comply with the Code. Below shows the Hierarchy Chart of Board of Directors and Audit Committee of Flat Cargo Berhad.
BOARD OF DIRECTORS
According to the Malaysian Code of Corporate Governance, there should be an equal number of executive and non-executive directors (inclusive of independent non-executive directors) in the Board of Directors. This is to ensure that no one individual group dominates ...view middle of the document...
However, they plays 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 will ensure that independence is upheld as non-executive members’ view are not neglected in the important decision making of the company. This will indirectly, diminish any fraudulences as the decision will be more transparent and formal.
They should also strengthen the audit committee by selecting a non-executive member to replace Mr. Ali Bin Ahmad. When selecting, it is also essential that they look into their qualification to ensure they hold the sufficient requirement for the designated position. It will be beneficial if those hired are from a financial background to ensure the reliability of the financial statement of the company.
As the Malaysian Code of Corporate Governance emphasizes on the use of good recruitment policy, therefore it is recommended that the higher authority restructure their recruitment policy especially in their selection process and regulate to conformance. On the other hand, they can also provide necessary training to enhance the efficiency of their human resources at the same time comply with the Code.
Flat Cargo Berhad (FCB) was one of the largest air freight company in Malaysia with several subsidiaries included FC Spare Sdn Bhd, Cargo Management Sdn Bhd, FCB (SPV) Ltd, Cargo Air Services Sdn Bhd and FC Air Ltd. They started their operation in 1997 with their head-office situated in Selangor. Initially they started with only two air-craft namely Boeing 737-200F and Cessna Grand Caravan and later expended their business overtime.
Their primary business is serving as an air cargo carrier to local and international companies as well as some government linked companies. The primary business of their subsidiaries are air freight services and air-craft ground handling services. FCB was also the only Intra-Asian overnight express cargo whom provide air freight transportation, which include...