malaysia code on corporate governance

Malaysian Code on Corporate Governance

Dr Elsa Satkunasingam

Iclif Executive Education Center

1 June 2021

The content of this presentation is not for public sharing without the explicit permission of ASB. Data presented in this file is still subject to the approval of multiple stakeholders.

Asia School of Business

CARE: What’s different?

2

Large companies that have departed from a practice have to

adopt it within a reasonabletimeframe and provide

justification for that timeframe i.e. 3 years or less

In particular, Large Companies are encouraged

to adopt the Step Up practices

Mid-cap and small-cap companies are encouraged to

adopt practices meant for Large Companies

Disclosures have to be informative and useful to

stakeholders including shareholders

Adoption of best practices by subsidiaries of listed

companies – to align the culture of the whole group.

Focus on substance and not form – to build stakeholder

confidence



Role of the Chairman

3

Not to be member of board committees

Not to combine board & board committee meetings (G)

Why? Why?

Self Review Threat

• Comply with the LR on AC meetings

• Facilitate objective & independent discussions

1 2



Non-executive Directors

4

1. Non-executive directors encouraged to meet annually without executive directors

2. To enable open discussions without being too influenced by executives and management



Board evaluation

5

What is different?

• In addition to disclosure of outcomes, companies have to disclose the actions taken and how it has or will influence board composition

• Not just historical but forward looking



Reappointments

• Based on performance & contribution

• 9-year tenure & two-tier voting process

• Information to shareholders

Board appointments & re-appointments

6

NC

Appointments

• Time commitments and integrity & governance

• Reasons for not using external sources

• Information to shareholders

• Gender (30% WOB)

• Gender diversity policy for board and management



Board remuneration

7

Remuneration P&Ps should reflect the different roles and

responsibilities of non-executives, executive directors

and senior management.

The appropriate level of remuneration should be linked

to the company’s

performance in managing sustainability risks and

opportunities.

Controlling shareholders with a nominee or connected director on the board should abstain from voting on the

resolution to approve directors’

fees

Table separate resolutions on the approval of the fees of each non-executive director



Audit Committee

8

Cooling off period for former partner (all partners including those in the affiliate firm e.g. advisory and tax consulting)

before joining the client’s audit

committee is 3 years.

Information in the audit firm’s

Annual Transparency Report should be considered when

assessing the suitability, objectivity and independence of

the external auditor. (G)

MCCG 2017 : Cooling off period for former key audit partner before

joining the client’s audit committee was 2 years.

What’s Different?



Sustainability

9

Disclose achievement of targets to stakeholders

Senior management drives material matters

Training & review board composition

Performance evaluations against progress in achieving targets

STEP UP : Designated Person within Management to integrate sustainability into operations

Responsibility for governance & setting strategies, priorities & targets



Bursa Malaysia LR

10

Disclose in Sustainability Statement

Governance structure

• Incorporated into Board’s agenda

• Sustainability Committee

• Risk Management Committee

Managing Material Sustainability Matters

• Policies

• Measures and actions taken

• Relevant indicators & performance



Engagement with stakeholders

11

To…• Employees

• Shareholders

• Potential investors

• Consumers(G)

Understanding their concerns, expectations &

company’s impact

on them

ENGAGE WITH…



AGMs

12

Robust discussions on

financial and non-financial performance

1

Virtual AGMs –smooth

broadcast and interactive

participation

2

Questions posed at the

AGM should be made visible to

participants

3

Minutes of meetings

circulated within 30 days

4

Establish channel for feedback outside of AGMs (G)

5



AGM Checklist

NEW ProgramCompany Secretary: Assistant, Adviser or Both?

13Asia School of Business


Date: 29 & 30 July 2021

Time: 9am – 1pm

Mode: Online

Fee: RM1,200 per pax

(before SST)

• What is the role of the

Company Secretary?

• Assistant, Adviser or Both?

• To speak or not to speak?

• What if the Board does not

listen?

THANKYOU!




malaysia code on corporate governance

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