Keynote Address at the 2023 OECD-Asia Roundtable on Corporate Governance

Speaker: Yang Berhormat Datuk Seri Ahmad Maslan Deputy Minister of Finance I, Malaysia
Location: Securities Commission Malaysia
Delivered: 11 October 2023

Full Speech:

Yang Berbahagia Dato’ Seri Dr. Awang Adek Hussin
Chairman, Securities Commission Malaysia

Mr. Yoshiki Takeuchi
Deputy Secretary General, Organisation for Economic Co-operation and Development

Mr. Satoru Kawasaki
Deputy Commissioner for International Affairs, Japan Financial Services Agency

Participants of the Roundtable,

Members of the media,

Ladies and Gentlemen,

Assalamualaikum warahmatullahi wabarakatuh dan salam sejahtera.

Opening

Firstly, thank you to the Securities Commission Malaysia and the OECD for inviting me to give the keynote address at this year’s Roundtable and to officiate the Asia launch of the revised G20/OECD Principles of Corporate Governance.
We are pleased that Malaysia is hosting the launch of the revised Principles, a renewed and strengthened position on governance expectations and best practices for markets across the globe.

Ladies and gentlemen

Restructuring our economy – the Madani framework
Malaysia recognises the immense role that good governance plays in shaping the long-term prosperity, and sustainability of the country.
We are committed to keep good governance as the foundation on which the country, companies and investors operate. The plan to improve the country’s governance will continue, to eradicate wastage leakage from corruption and the abuse of power.
The governance principles of integrity, accountability, and transparency underscores Malaysia’s MADANI Economy framework. The framework is based on identifying and mitigating structural issues in the Malaysian economy to achieve high growth and ensuring a just and equitable distribution of economic wealth to the people.
Targeted initiatives will be implemented to catalyse new economic activities as well as industries and enhance of firm and worker productivity

Ladies and gentlemen,

National Energy Transition Roadmap
The first major component in the MADANI Economy framework is the National Energy Transition Roadmap (NETR) which was launched in August this year to speed up the country’s energy transition. The roadmap is driven by key projects that fall into six energy transition levers which are – energy efficiency; renewable energy; hydrogen; bioenergy; green mobility; and carbon capture, utilisation and storage.
Under the NETR Responsible Pathway 2050, Malaysia aims to increase installed RE capacity target to 40% by 2040 and 70% by 2050. Further, we aim to achieve close to fully phased-out coal from the power generation mix by 2050.
The capital market will play an important role in financing businesses’ transition towards more sustainable practices, by broadening the available capital market instruments to meet this need.
The SC has prioritised sustainability since 2011, when the Capital Market Masterplan 2 included SRI as a key growth strategy. Malaysia’s decision to develop the SRI segment made sense because the country was already a global leader in Islamic finance, and the similarities between Islamic finance and sustainable finance.
Now, under the Capital Market Masterplan 3, the SC continues to enable funding and capital mobilisation for competitive businesses of all sizes and stages of development.
Bursa Malaysia has also launched the Bursa Carbon Exchange (BCX), which will support the country’s shift towards a low carbon economy. The BCX recently commenced trading and facilitating off-market transactions of carbon credits.

Ladies and gentlemen,

New Industrial Master Plan 2030
It is also important for Malaysia to revitalise its manufacturing sector, and the New Industrial Master Plan 2030 (NIMP 2030) provides the strategic answer for this.
NIMP 2030, was launched in early September as a strategic component of the MADANI Economy framework. It will drive focus towards high-impact, high-growth sectors — E&E, chemicals and aerospace, to name a few.
It has four main goals, which is to advance economic complexity; tech up for a digitally forward nation; achieve net-zero; and safeguard economic security and inclusivity.
It is estimated that the NIMP 2030 will need RM95 billion over its seven years, to help the country's economy grow. This will mostly come from private equity, capital and financial markets. Close to 10% of the investment requirement, or RM8.2 billion, will be allocated by the government to fund the NIMP 2030 action plans.

Governance Anchoring Action

Ladies and gentlemen,
To reclaim our lead, Malaysia needs to strengthen and retain trust of its people, investors, and businesses.
Good governance is not to be trifled with. The reforms we have made, and will implement such as transparency in procurement awards and quality execution of any government business, are now the rule, rather than the exception.
The Fiscal Responsibility Act (FRA), which will be tabled in Parliament this month, outlines the fiscal management principles and standards to enhance accountability, governance, and transparency. Other fiscal frameworks such as the Medium-Term Fiscal Framework (MTFF) and Medium-Term Revenue Strategy (MTRS) will supplement this.
The Parliament will also consider the establishment and operationalisation of Bursa Malaysia’s regulatory subsidiary (RegSub). This will improve the existing governance structure and address the risks related to conflicts of interest. Establishment of the RegSub aligns with the revised G20/OECD Principles, which stresses the need for a clear division of responsibilities among various authorities and for safeguards to manage potential conflicts of interest.
Signs of confidence and commitment in our global growth drivers indicate that we are on the right track. The rise in both foreign direct investment (FDI) and domestic direct investments (DDI) shows that both foreign and domestic investors are once again confident in Malaysia's economic growth and potential.

Global Challenge, Global Solution

Ladies and gentlemen,
Our vision of prospering with high governance standards depends on our ability to learn from the past and continue with the reform agenda in a sustained manner.
Good corporate governance, and a global agreement on the standards is critical. A single global standard will establish a common understanding of corporate governance and facilitate global capital flows. It provides a credible framework of rights and responsibilities supported by the rule of law and effective enforcement.
The challenges we face is global in nature, and hence a global solution is required. On that note, it gives me great pleasure to officiate the Asia launch of the revised G20/OECD Principles of Corporate Governance.
Thank you.