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Ethics Standards Board (ESB)

Chairman:
Zahrah Abd Wahab Fenner

Members:
Dr. A. Bakar Sarpon
Eugene Wong Weng Soon
Francis Chan Feoi Chun
Ravindran Navaratnam
Rita Benoy Bushon
Dr. Sharifah Khadijah Syed Agil
Tan Soo Yan

Observers:
Hajah Zainun Taib
Selvarany Rasiah

1. STRUCTURE OF THE BOARD

The Ethics Standards Board (“ESB”) is a standard setting body designated by, and operating independently under the auspices of the Council of the Malaysian Institute of Accountants (“MIA”).

2. Objectives

2.1	To serve the public interest by issuing professional and ethical standards with integrity of the accounting profession by setting out the highest principles of professional and ethical standards;
2.2	To promote adherence to high quality professional and ethical standards and furtherance of international convergence of standards;
2.3	To review exposure drafts issued by IFAC International Ethics Standards Board for Accountants and to submit comments thereon;
2.4	To develop and issue guidance or clarification to assist with the implementation of the Institute’s By Laws;
2.5	To support the efforts of the Institute in promoting greater awareness and understanding of the Institute’s By Laws;
2.6	To speak out on public interest issues where the professionalism and ethical conduct of accounts is required and relevant.

3. Responsibilities

3.1	To develop and submit to MIA Council an annual plan that specifies ESB’s strategic direction, priorities and agenda, including a report on how projects were selected and priorities set;
3.2	To implement an effective working process for all projects and commission task forces, advisory groups or other groups, as appropriate, to aid in the development of ethics standards, guidelines or other materials;
3.3	To communicate with and seek input from stakeholders on a timely basis;
3.4	To advise MIA as to the adequacy of human and financial resources to accomplish the ESB’s objectives;
3.5	To recommend and sponsor ethics research in Malaysia, particularly on issues that may be of relevance to the Malaysian environment; and
3.6	To have MIA Council review the effectiveness of the ESB's process at least once every 3 years.

4. Composition of Members MEETING PROCEDURES

4.1	Selection criteria
4.1	The best person for the job;
4.2	A balance between the personal and professional qualifications of a nominee and representational needs;
4.3	Members should be represented by the sector of the accountancy profession, size of organization and level of economic development;
4.4	Candidates for appointment as public members may be put forward by any individual or organization; and
4.5	For the first board, however, the public members will be nominated by the MIA’s Nomination Committee.
4.2	Composition of Members
	Composition Appointed by 1 Voting Chairman MIA Council 8 Voting Members Recommended by MIA’s Nominating Committee and appointed by MIA Council Total 9   4 Non-voting Observers MIA Council
4.3	Proposal for 9 Members (including Chairman)
	a) 3 council members (chairman is appointed from the Council); b) 2 from the accounting firms; and c) 4 public members.
4.3.1	The 4 public members could include amongst others, representatives from the:-
	a) Minority Shareholders Watchdog Group; b) Federation of Public Listed Companies Berhad; c) Malaysian Investors Association; d) Malaysian Institute of Directors; e) Malaysian Institute of Management; f) Malaysian Institute of Integrity; g) Educationist
4.3.2	All members are subject to rotation.
4.4	Proposal for observes from each of the following
	a) Securities Commission; b) Bursa Malaysia Berhad; c) Auditor General and d) Audit Oversight Board
4.4.1	Observers may attend the ESB meeting, have privilege of the floor, and participate in projects, but have no vote.
4.4.2	The observers would be expected to possess the technical skills to participate fully in the ESB meetings regularly to maintain an understanding of current issues.
4.5	Subject Matter Experts
5.	TERMS OF MEMBERS
5.1	One third of the ESB membership is subject to retirement every year. The retiring ESB member shall be eligible and may offer himself/herself for re-appointment by MIA Council.
5.2	Continuous service on the ESB is limited to six consecutive years, unless that member is appointed to serve as Chair for a further period of not more than three years.
5.3	Notwithstanding subsection 5.1, the first members referred to in section 4 shall serve as ESB members from the date of their appointments until the third year of the establishment of the ESB, thereafter one third of the ESB members be subject to retirement in accordance with subsection 5.1.
6.	MEMBERS' CODE OF CONDUCT
6.1	ESB members are required to sign a Code of Conduct on appointment/re-appointment declaring that they will act in the public interest and with integrity in discharging their roles.
7.
7.1	Quorum for each ESB meeting requires the presence, in person or by simultaneous telecommunications link of at least 5 appointed members.
7.2	The ESB meeting shall be chaired by the Chairman. In the event of his absence; the members present shall select one of their numbers to take the chair for the duration of the meeting.
7.3	Meeting of ESB shall be held at least 2 times a year. Additional meetings and conference calls maybe convened to achieve ESB’s tasks.
7.4	Each member of ESB has one (1) vote.
7.5	The affirmative vote of at least two-thirds of members present at a meeting in person or by simultaneous telecommunications link is required to approve changes to the By-Laws or approve Exposure Drafts.
7.6	Any voting member of ESB who fails to attend in any 12 month period from the appointed date, at least 50% of all the meetings of ESB shall, in the absence of circumstance that in the opinion of the Chair are extenuating, automatically ceases to be a member of the ESB at the end of the financial year which he or she was in default.
7.7	The ESB meetings and agenda papers are to be in English, which is the official working language of MIA.
8.	REPORTING
8.1	ESB shall publish an annual report outlining its work program, activities and progress made in achieving its objectives during the financial year.
8.2	ESB shall review its membership and Term of References to ensure that they continue to meet the needs of the ESB and the public, and submit the results of this review to MIA Council at least once every three years.
9.	AMENDMENTS TO THE TERMS OF REFERENCE
9.1	The ESB members may propose amendments of the Terms of Reference for the consideration of the MIA Council. In the event of MIA Council wishing to amend the Terms of Reference other than on the recommendation of the ESB, the ESB members shall be given the opportunity to discuss such changes and to represent their views to the MIA Council before any changes are approved.