Corporate Governance - REGULATION | Securities Commission Malaysia

Corporate Governance

The Securities Commission Malaysia (SC) is dedicated towards promoting the internalisation of a culture of good governance amongst capital market participants. Greater emphasis is being placed on self and market regulation to complement the existing comprehensive regulatory framework. We believe that a strong corporate governance culture must be premised on a dynamic synthesis of efforts between regulators and the market.

Malaysian Code on Corporate Governance

DOWNLOAD MALAYSIAN CODE ON CORPORATE GOVERNANCE

The Malaysian Code on Corporate Governance (MCCG) introduced in 2000 has been a significant tool for corporate governance reform, and has influenced corporate governance practices of companies positively. The MCCG reflects globally accepted principles practices of corporate governance which are above and beyond the minimum required by statute, regulations or those prescribed by Bursa Malaysia. The MCCG was reviewed in 2007, 2012, 2017 and 2021 to ensure that it remains relevant and supports the inculcation of good corporate governance culture and practices.

The 2021 update of the MCCG introduces best practices and guidance to–

improve board policies and processes including those related to director selection, nomination and appointment;
strengthen board oversight and the integration of sustainability considerations in the strategy and operations of companies; and
encourage the adoption of the best practices, particularly those found to have relatively lower levels of adoption, as highlighted in the SC’s Corporate Governance Monitor report.

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Frequently Asked Questions (pdf)

Guidance and FAQs on the Conduct of General Meetings for Listed Issuers

The Covid-19 pandemic and the ensuing enforcement of the Movement Control Order (MCO) have changed the ordinary course of life and business. For businesses, it has also affected engagements between the company and its shareholders, which includes the conduct of general meetings.

The Guidance and FAQs on the Conduct of General Meetings for Listed issuers (Guidance Note) is issued by the Securities Commission Malaysia (SC) to guide all companies listed on Bursa Malaysia Securities Bhd on the conduct of general meetings during a period when the MCO is in place or outside of an MCO period; but where safe distancing requirements remain (e.g. restriction on mass gatherings). This includes the conduct of fully virtual general meetings and hybrid general meetings.

Any query in relation to this Guidance Note can be directed to [email protected]

Guidance Note (pdf)
(Date Issued: 18 April 2020)
(Revised: 16 July 2021)

Survey on the conduct of fully virtual general meeting

Corporate Governance Council

In April 2020, the SC established the Corporate Governance Council (CG Council), which brings together key corporate governance stakeholders to provide strategic direction for the development of corporate governance policies and initiatives for the capital market and to co-ordinate its implementation.

The establishment of the CG Council is in line with the SC’s Corporate Governance Strategic Priorities (2017-2020) which seeks to enhance Malaysia’s position as a market with strong corporate governance framework and culture.

Members of the CG Council comprise –

YBhg. Datuk Syed Zaid Albar (Chairman), Executive Chairman, Securities Commission Malaysia (SC)
Ms. Foo Lee Mei, Managing Director, SC
YBhg. Datuk Muhammad Umar Swift, Chief Executive Officer, Bursa Malaysia Berhad (Bursa)
YBhg. Tan Sri Zarinah Anwar, Chairman, Institute of Corporate Directors Malaysia (ICDM)
YBhg. Dato’ Yusli bin Mohamed Yusoff, President, Malaysian Institute of Corporate Governance (MICG)
Puan Rohaya Mohammad Yusof, Chairperson, Institutional Investors Council Malaysia (IIC)
Mr. Devanesan Evanson, Chief Executive Officer, Minority Shareholders Watch Group (MSWG)

Annual General Meeting Corporate Governance Checklist for Shareholders

download the Annual General Meeting Corporate Governance Checklist for Shareholders

The Annual General Meeting Corporate Governance Checklist (Checklist) highlights questions for shareholders to consider in preparation for an Annual General Meeting (AGM). Shareholders play an important role in driving responsible corporate behaviour and the AGM is one of the platforms where they can raise material issues for discussion or seek explanation from the board and management.

The Checklist covers primarily issues related to resolutions commonly tabled at AGMs such as the appointment or reappointment of directors, approval of directors’ fees and the appointment of auditor. General meetings are important platforms for directors and senior management to engage shareholders to facilitate greater understanding of the company’s business, governance and performance. Thus, the Intended Outcome of Practice 12 of the Malaysian Code on Corporate Governance is that shareholders are able to participate, engage the board and senior management effectively and make informed voting decisions at General Meetings.

While the Checklist was developed for shareholders, other stakeholders such as consumers and potential investors are encouraged to use the Checklist to understand and evaluate the performance, policies and practices of companies.

Corporate Governance Monitor

download corporate governance monitor

The Corporate Governance Monitor is an annual publication by the SC on the overall state of play in relation to the adoption of the Malaysian Code on Corporate Governance (MCCG), quality of corporate governance disclosures and observations from selected thematic reviews for the year. Using advanced analytics, data from more than 800 public listed companies are analysed to produce the report. The data and observations in the Corporate Governance Monitor, can be used -

by boards to review the company’s corporate governance policies and practices;
to support shareholders in evaluating the corporate governance performance of companies;
by advocates to promote good governance; and
to consistently track progress in the adoption of corporate governance best practices.

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Corporate Governance Monitor 2019
Corporate Governance Monitor 2019 - Launch Video

Corporate Governance Strategic Priorities 2017-2020

DOWNLOAD CORPORATE GOVERNANCE STRATEGIC PRIORITIES 2017-2020

The Corporate Governance Strategic Priorities (2017-2020) is the product of an extensive review by the SC on the state of corporate governance of public-listed companies (PLCs) in Malaysia. The review drew inputs from domestic and international stakeholders, lessons from past and recent corporate governance failures, and changes in market structure and business needs. It also took into account the growing need for companies to address the converging interest of corporate citizenship, social and environmental concerns. There are five strategic priorities, which are as follows:

Priority 1 – Enhancing the corporate governance regulatory framework
Priority 2 - Strengthening the corporate governance ecosystem
Priority 3 – Promoting greater gender diversity on boards
Priority 4 – Embedding corporate governance culture early in the life cycle of companies and among youth
Priority 5 – Leveraging technology to enhance monitoring of corporate governance practices and shareholder activism

Malaysian Code for Institutional Investors

The Malaysian Code for Institutional Investors aims to set out broad principles of effective stewardship by institutional investors such as their disclosures of stewardship policies, monitoring of and engagement with investee companies and managing conflict of interests.

Download the Malaysia Code for Institutional Investors (pdf)

ASEAN Corporate Governance Scorecard: Country Report & Assessment

The ASEAN Corporate Governance Scorecard was introduced in 2011. The scorecard is a corporate governance initiative of the Association of Southeast Asian Nations (ASEAN), under the ASEAN Capital Markets Forum (ACMF) Implementation Plan for the development of an integrated capital market, to complement other ACMF initiatives and promote ASEAN as an asset class. This initiative is led by Securities Commission Malaysia and supported by the Asian Development Bank (ADB) through its regional technical assistance for ASEAN capital market integration. The scorecard hopes to raise corporate governance standards of publicly listed companies (PLCs) in ASEAN countries and increase their visibility to investors.

The country report highlights the areas of strengths and areas for further improvement of each participating country which provided regulators, PLCs, Institute of Directors, and other stakeholders useful data points to guide corporate governance reforms, strategies, and measures in their respective country.

The Organisation for Economic Co-operation and Development (OECD) Principles of Corporate Governance were used as the main benchmark for the Scorecard. These cover Rights of Shareholders, Equitable treatment of Shareholders, Role of Stakeholders, Disclosure and Transparency and Responsibilities of the Board.

Corporate Governance Blueprint 2011

Download Corporate Governance Blueprint 2011

The Securities Commission Malaysia’s five-year Corporate Governance Blueprint (Blueprint) which was launched on 8 July 2011, provides the action plan to raise the standards of corporate governance in Malaysia by strengthening self and market discipline and promoting greater internalisation of the culture of good governance. It engenders a shift in corporate governance culture from mere compliance with rules to one that more fittingly captures the essence of good corporate governance; namely a deepening of the relationship of trust between companies and stakeholders.

Developed through a highly consultative process with industry, the Blueprint focuses on six connected themes of the corporate governance ecosystem namely shareholder rights, the roles of institutional investors, boards, gatekeepers and influencers, disclosure and transparency as well as public and private enforcement.