Overview of the Corporate Governance Reform Agenda Legal and Institutional Developments Implementation Reporting CG-Enforcement Actions
Multilateral Co-operative Involvement Resources Training Events Useful Links
Main            

OVERVIEW OF THE CORPORATE GOVERNANCE REFORM AGENDA

Finance Committee Report on Corporate Governance

Historically, while developmental initiatives to improve the various aspects of the legal and institutional framework for corporate governance in Malaysia have progressed on a periodic and ongoing basis, the financial crisis provided further impetus necessary for the adoption of a concerted and holistic approach towards corporate governance reform by both government and industry.

In March 1998, a High-level Finance Committee on Corporate Governance, comprised of both government and industry was formed for the purpose of swiftly identifying and dealing with weaknesses highlighted by the crisis in the then existing governance framework. The Finance Committee's findings, which were reported through the publication of the Finance Committee Report on Corporate Governance (Report) in March 1999, represents the end-product of an extensive collaborative effort between government and industry, with the implementation of key aspects of the Report, such as the introduction of the Malaysian Code on Corporate Governance, having been spearheaded by industry.

The members of the Finance Committee comprise the Ministry of Finance, SC, Companies Commission of Malaysia, Financial Reporting Foundation, Malaysian Accounting Standards Board, Bank Negara Malaysia, Association of Banks Malaysia, Association of Merchant Banks Malaysia, the then Bursa Malaysia, Association of Stockbroking Companies Malaysia, Malaysian Association of The Institute of Chartered Secretaries and Administrators and Federation of Public-listed Companies.

An Implementation Project Team, subsequently formed and tasked to lead and oversee the implementation of the recommendations of the Report, is currently working towards the completion of the implementation process. The members of the Implementation Project Team comprise the Ministry of Finance, SC, Companies Commission of Malaysia, Bank Negara Malaysia, Bursa Malaysia and Federation of Public-listed Companies.

In summary, the thrust of the Malaysian corporate governance reform agenda underlying the Report focuses on the following key areas:

  • Fair treatment of all shareholders and protection of shareholder rights, with particular focus on the rights of minority shareholders;
  • Transparency – through the timely disclosure of adequate, clear and comparable information concerning corporate financial performance, corporate governance and corporate ownership;
  • Accountability and independence of the board of directors;
  • Strengthening regulatory enforcement; and
  • Promoting training and education at all levels to ensure that the framework for corporate governance is supported by the necessary human resource capital.

Details on the status of implementation of the Report are available. The Report is also available for download.

Capital Market Masterplan

Building on the Report's recommendations, the Capital Market Masterplan or CMP (released in February 2001), contributes towards furthering the development of the Malaysian corporate governance reform agenda. The CMP contains 152 recommendations dealing with the development of the institutional and regulatory framework for the capital market from 2001 to 2010, 10 recommendations of which focus specifically on corporate governance. Further details on the CMP, including reporting on the extent of its implementation, are available in the Capital Market Masterplan section of the SC website.

Corporate Law Reform Committee (CLRC)

The Companies Commission of Malaysia has established the Corporate Law Reform Committee in August 2003 to spearhead the corporate law reform programme with the objective to undertake a comprehensive review of the corporate law in Malaysia. Corporate governance reforms are high on the priority of the Corporate Law Reform Committee with one of the four working groups focusing solely on the issues of corporate governance and shareholders' rights. The SC is the chair and the secretariat for this working group. Further details on the Corporate Law Reform Committee can be found in the Strategic Framework paper for the Corporate Law Reform Programme of Companies Commission of Malaysia.