FGV Annual Report 2018

24 PRACTICED LEADERSHIP BY EXAMPLE FGV HOLDINGS BERHAD In the fourth quarter of 2018 and the first quarter of 2019, steps were taken to strengthen FGV’s leadership in key functions, especially with the appointment of Dato’ Haris Fadzilah Hassan as the new Group Chief Executive Officer (GCEO). With the new members of the Board and Management team in place, the Board is confident that the right steps are being taken to restore FGV’s operations and financial standing, while governance and oversight processes are strengthened. THE YEAR IN REVIEW As a result of impairments totalling RM949 million over the 12 months ended 2018, FGV recorded a Loss Before Zakat and Tax (LBZT) of RM1.02 billion on the back of turnover of RM13.46 billion. Without the impairments, FGV would have recorded a LBZT of RM74 million for the year compared to a profit in 2017. This performance can be partly attributed to the decline in Crude Palm Oil (CPO) price, which averaged at RM2,282 per MT in 2018, compared to RM2,792 per MT in 2017. FGV’s poor operational performance was also contributed to the Group’s results. There is clear evidence that FGV lags its peers in terms of productivity and cost, due to inefficiencies that were compounded by the sub-optimal oil palm age profile of its estates. STATEMENT FROM THE CHAIRMAN Dear Shareholders, It is my fervent hope that history will regard 2018 as a watershed year for FGV Holdings Berhad (FGV) – the year your Board of Directors took bold, concrete steps to set FGV back on the right track. DATUK WIRA AZHAR ABDUL HAMID Chairman All of us on the Board agree that we were challenged, as we never have been before. There were several occasions when we debated long and hard over the best way forward, when there were difficult decisions to be made. On every occasion, we were guided by the principles of good governance, fairness and responsibility, fully aware that we serve our Shareholders, all of you, equally and without distinction. I am pleased to report that today, we are starting to see the potential signs of recovery, although there is still some way to go. REINFORCING OUR GOVERNANCE In 2018, there were five new appointments to the Board to strengthen our oversight on governance and transformation. These new appointments comprise of Dr. Nesadurai Kalanithi, Dato’ Yusli Mohamed Yusoff, Datin Hoi Lai Ping, Mohd Hassan Ahmad and Dato’ Dr. Othman Haji Omar. With these appointments, your Board today consists of a diverse group of people with a combination of industry and subject matter expertise, who bring with them a wealth of experience and knowledge. The Board also established two Special Board Committees; Special Board Committee 1 to evaluate the Group’s past transactions and Special Board Committee 2 to monitor the Group’s performance and advise on the steps needed to achieve agreed key result areas. Special Board Committee 2 also assumed the roles and responsibilities of the previous Group President/Chief Executive Officer (GP/CEO) in the interim period between the resignation of the previous GP/ CEO and the appointment of the Interim Chief Executive Officer (Interim CEO). Special Board Committee 2 has ceased to operate following the appointment of the Interim CEO and Special Board Committee 1 will cease to operate once review of specific past transactions are concluded. For further details on the establishment of Special Board Committees can be found in the Corporate Governance Overview Statement on pages 56–57.