SC reports improving corporate governance

Syndicated News
Written by Syndicated News

KUALA LUMPUR, May 6 2019 : The Securities Commission Malaysia (SC) released its inaugural Corporate Governance Monitor (CG Monitor) 2019 today, which highlights positive levels of adoption for a majority of the practices recommended in the Malaysian Code and Corporate Governance (MCCG).

Chairman Datuk Syed Zaid Albar said according to the report which reviewed the performance for 2018, among the 36 practices outlined in the MCCG, 27 had an adoption level of over 70 per cent.

“In fact, mid and small cap companies are among the trailblazers in the adoption of the CG best practices. Many of them have put in place good CG practices such as disclosing the remuneration of senior management, introducing a nine-year tenure limit for independent directors, and having a wholly-independent audit committee.

“This shows we are moving in the right direction with greater appreciation of the value of adopting good CG practice, even among the smaller companies,” he said in his speech at the launch of the report here, today.

The release of the CG Monitor was made possible by leveraging on advanced analytics in line with the SC’s Corporate Governance Priorities (2017-2020), which enabled it to have greater insights into the progress made, and challenges faced by listed companies in implementing corporate governance best practices.

These observations will form future policy recommendations and interventions in promoting corporate governance in Malaysia.

Meanwhile, Syed Zaid said the report showed there were still 447 companies with long-serving independent directors on their boards, and some with a tenure of more than 30 years.

“A recent survey conducted by the Institutional Shareholder Services Inc showed that 70 per cent of the institutional investors who participated in the survey, agreed that having a large number of directors with long-tenure is a concern.

“Lengthy tenures are believed to prevent boards from introducing new skills and ideas to the running of the business. A refreshed board on the other hand, lets the company make improvements and there is also something to be said for new viewpoints and greater diversity,” he added.

The report also stated that 164 listed companies had started exercising greater scrutiny on the retention of long-serving independent directors through the use of the two-tier voting process.

Syed Zaid said there were also 226 independent directors with a tenure of more than 12 years who resigned and did not seek re-election after the introduction of the two-tier voting process

The CG Monitor 2019 presents observations on three thematic reviews on long-serving independent directors (policies and practices), gender diversity on boards and CEO remuneration of the top 100 listed companies.

On the participation of women on the boards of the top 100 listed companies, the CG Monitor stated Malaysia had made slow but steady progress, with a seven-percentage points increase to 23.7 per cent last year from 16.6 per cent in 2016.

Syed Zaid said unlike other countries, progress in gender diversity on boards and senior management in Malaysia was achieved without mandating a quota in the law, which saw women account for 28 per cent of senior management positions in all listed companies, higher than the Asia Pacific average of 23 per cent.

“An interesting observation from the CG Monitor is that the percentage of women directors increased in the younger age groups, as women accounted for 15 per cent of the 51 to 60 age group compared to 43 per cent in the 20 to 30 age group, suggesting a strong pipeline for gender diversity on boards in the future,” he added.

For this year, Syed Zaid said the SC would review the anti-corruption measures of listed companies as part of efforts at implementing the National Anti-Corruption Plan, which identified corporate governance as one of the six priority areas. – Bernama



About the author

Syndicated News

Syndicated News

News sourced from Bernama, Reuters, AFP and other accredited news agencies, including credible blogsites and news portals.