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
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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
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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
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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
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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
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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
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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?
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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
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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
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Engagement with stakeholders
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To…• Employees
• Shareholders
• Potential investors
• Consumers(G)
Understanding their concerns, expectations &
company’s impact
on them
ENGAGE WITH…
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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
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AGM Checklist
NEW ProgramCompany Secretary: Assistant, Adviser or Both?
13Asia School of Business
Asia 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!
Asia School of Business
Asia School of Business
Asia School of Business