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Managing Conflict Of Interest: A Pillar Of Corporate Governance With An Esg Focus

In today’s dynamic business landscape, corporate governance forms the foundation of ethical and sustainable operations. Within the framework of Environmental, Social, and Governance (ESG) principles, Conflict of Interest (COI) management stands out as a critical area where robust policies and practices not only ensure compliance but also strengthen trust among stakeholders.

Understanding Conflict of Interest

A conflict of interest arises when an individual’s personal interests clash with their professional obligations to the company. This can manifest in various forms, such as financial, relational, or situational conflicts. Left unchecked, conflicts of interest can erode corporate integrity, distort decision-making, and jeopardize the organization’s reputation.

TNB has established a Conflicts of Interest Policy in August 2018, which underwent its second revision on 16 December 2024. The revised policy explains the relevant principles and processes for preventing or managing COI, and how such principles and processes are to be implemented.

This policy applies to TNB and its Subsidiaries, encompassing the Board of Directors, Key Senior Management, and all personnel. TNB regards conflicts of interest as a serious matter, reflecting its commitment to ESG principles and sustainable governance.

Principles and Processes for Preventing and Managing Conflicts of Interest

We are committed to maintaining the highest standards of governance by preventing and managing conflicts of interest through clearly defined principles and processes. These include:

1. Category of Conflicts of Interest (COI):

I. Actual COI

The person faces a real, existing conflict.

II. Potential COI

The person is in or could be in a situation that may result in a conflict.

III. Perceived COI

The person is in or could be in a situation that may appear to be a conflict, even if there is no actual or potential conflict.


  • All actual, potential or perceived conflicts should therefore be declared and managed according to TNB Conflict of Interest policy.

2. Transparency and Disclosure:

  • All personnel, including the Board of Directors, Key Senior Management, and employees across the Group and its Subsidiaries, should disclose all forms of COI both on an annual basis and immediately on occasions when a conflict arises.

3. Defined Roles and Responsibilities:

Responsible Parties Responsibilities
Board of Directors (BOD), Key Senior Management, TNB Personnel and its Subsidiaries
  • Responsible to adhere to the principles and rules set out in this policy.
  • Responsible for regularly declaring COI (Annually and as and when required) using the appropriate Disclosure Form.
Company Secretary (CoSec)
  • Handles COI declarations for the TNB Board of Directors.
  • Responsible to report to the BAC any COI situation arise on bi-annual basis and as and when required.
Group People Division (GPD)
  • Manages COI declarations for Key Senior Management.
  • Upon compilation of COI declaration and mitigation for Key Senior Management, GPD shall forward the COI report to Cosec for reporting to the BAC, on bi-annual basis and as and when required.
  • Responsible to ensure that new TNB Personnel receive a copy of this policy and are provided access to the COI disclosure system during the onboarding process.
  • Inform the new TNB Personnel that any actual, potential or perceived conflicts should be declared. The Integrity Department (ID) will work with GPD to ensure the relevant materials are provided to the new personnel.
Board Integrity Committee (BIC)
  • Responsible for providing the policies and guidance on COI.
  • Work with the BAC which oversees and manages the policies and guidance on COI.
  • The BIC shall obtain the approval of the BAC of such policies and guidance on COI.
Board Audit Committee (BAC)
  • Responsible to review and report to the BOD any COI situation that arises, persists, or may arise together with the measures to resolve, eliminate or mitigate such conflicts, in the BAC report, on bi-annual basis and as and when required.
Integrity Department (ID)
  • Responsibility for overseeing the implementation, communication, monitoring and updating of this policy and shall report to BIC.
Subsidiaries
  • Where a Subsidiary has its own BOD, the Cosec of that Subsidiary shall be responsible for BOD statutory declaration at Subsidiary BOD, Cosec of that Subsidiary shall forward the COI report to Cosec for reporting to the BAC, on bi-annual basis and as and when required.

4. Oversight and Monitoring:

  • TNB internal auditors will audit the COI governance & reporting and COI implementation annually.

5. Regular Review and Training:

  • Ongoing education programs are implemented to help all personnel understand their responsibilities and the importance of compliance with this policy through e-learning platform and TNB internal bulletins.

6. Enforcement and Accountability:

  • Non-compliance is addressed rigorously. Disciplinary actions, up to and including termination of employment, will be enforced. Legal action may also be taken if TNB’s or its Subsidiaries’ interests are harmed due to policy violations.

Implementation of Principles and Processes

The effective implementation of these principles involves:

1. Policy Communication:

Disseminating the COI policy across all levels in TNB and its Subsidiaries to ensure universal understanding and adherence.

2. Digital Disclosure & Manual Disclosure Mechanisms:

Providing accessible platforms and mechanisms for personnel to report potential conflicts confidentially and securely.

3. Regular Monitoring & Reporting:

Conducting periodic audits and assessments to identify risks and ensure policy adherence.

4. Stakeholder Engagement:

Engaging stakeholders to align practices with ESG commitments and foster a culture of integrity.

Consequences of Non-Compliance

TNB and its subsidiaries maintains a zero-tolerance stance on conflicts of interest. Violations of this policy will result in:

1. Disciplinary Action:

  • Sanctions may include warnings, suspension, or termination of employment.

2. Legal Action:

  • TNB reserves the right to pursue legal action if its interests, or those of its Subsidiaries, are or could be harmed as a result of non-compliance.

Effective conflict of interest management is more than a compliance requirement—it is a strategic imperative aligned with ESG commitments. By prioritizing transparency, accountability, and ethical behavior, TNB builds resilient, trust-driven organizations. In doing so, it safeguards its reputation while contributing to a sustainable and equitable business ecosystem.

Our Conflict of Interest Policy


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