Kuala Lumpur, 15 November 2011
SC Invites Comments on Independent Chairman and Poll Voting
The Securities Commission Malaysia (SC) today published a consultation paper seeking public feedback on independent chairman and poll voting.
The five-year Corporate Governance Blueprint (Blueprint) launched in July this year recognises that good corporate governance culture needs to start from the top, with boards playing the role of stewards and guardians to raise corporate governance standards.
To be able to set the right ‘tone from the top’, boards must have the capacity and be independent of management to fulfill their fiduciary responsibilities and this is especially important in the case of the chairman who is generally responsible for leading the board. This led the Blueprint to recommend mandating the separation of the position of the chairman and CEO, and that the chairman should be a non-executive member of the board.
The SC envisages moving one step further to require an independent chairman, an issue which has been widely debated. The publication of the consultation paper provides the opportunity for all parties to contribute their views in respect of whether or not the chairman should be an independent director.
The consultation paper also seeks to gather the public’s views on whether poll voting should be mandated for all resolutions requiring shareholders’ approval.
The Blueprint recommends that poll voting should only be mandated for resolutions approving related-party transactions. This is to allow disinterested shareholders to convey to companies that such transactions are not acceptable unless they benefit the companies. The consultation paper aims to solicit views on extending poll voting for all resolutions.
Shareholders have equal responsibility to protect and advance their own interests, to ensure that the companies they have invested in are well governed. This can be done through greater shareholder activism such as participating in the company’s decision making process through voting.
The consultation paper in relation to the issues elaborated above is available here . Please submit your written comments to the address/email below by 15 December 2011.
Market Development Department
3 Persiaran Bukit Kiara
50490 Kuala Lumpur
SECURITIES COMMISSION MALAYSIA