The code has 36 practices to support three principles namely board leadership and effectiveness; effective audit, risk management, and internal controls; corporate reporting and relationship with stakeholders.

A key feature of the new code is the introduction of the Comprehend, Apply and Report (CARE) approach, and the shift from “comply or explain” to “apply or explain an alternative”. This is meant to encourage listed companies to put more thought and consideration when adopting and reporting on their corporate governance practices.

The MCCG also adopts a differentiated and proportionality approach in the application of the code taking into account the differing sizes and complexity of listed companies. The code now identifies certain practices and reporting expectations to only apply to companies on the FTSE Bursa Top 100 Index and those with market capitalization of RM 2 billion or more.

Another new dimension in the code is the introduction of ‘Step Up’ practices to encourage companies to go further in achieving corporate excellence. This includes the practice which requires Audit Committee to comprise only of independent directors and the establishment of a Risk Management Committee.

The new MCCG is the result of a comprehensive review undertaken by the SC in 2016 drawing inputs from domestic and international stakeholders, lessons from past and recent governance failures and changes in market structures and business needs. The code, which was first introduced in 2000 following the recommendations made by the High Level Finance Committee in 1999 , had been reviewed twice in 2007 and 2012.