THE Malaysian Association of the Institute of Chartered Secretaries and Administrators (Maicsa) has welcomed the proposal by the Securities Commission (SC) to accord legal protection to company officials who alert authorities of corporate wrongdoings within their firms.
In a statement, association president Paul Chan said legislation to protect the so-called whistle blowers would result in higher levels of transparency and the lowering of risk as swift and timely measures are taken to address commercial misconducts.
Chan said that company secretaries, as independent advisers to boards of directors, were in a unique position to advise them of instances when the corporation would run foul of the law.
If their advice was not heeded, these independent advisors could then take the lead in notifying the authorities or regulators of areas where the corporation was not acting in the interest of the shareholders and stakeholders, he said, adding that as company watchdogs, company secretaries had very often faced a moral dilemma when they find their companies acting ultra vires.
According to Maicsa, only Britain and South Africa have so far passed specific whistle blower legislation to protect employees of both public and private who report misdeeds, whilst in the US, laws in place currently only protect public sector workers.
Last week, SC chairman Datuk Ali Abdul Kadir said that the commission was working on a proposal to include provisions to indemnify company officers who alert the authorities of corporate misdeeds in the revised Companies Act currently being drawn up by the Companies Commission of Malaysia.
Presently, only auditors are accorded legal protection for whistle blowing.
According to Chan, the move was timely as the capital market moved into the final phase of the disclosure-based regime.
By affording these professionals proper protection against malfeasances in corporate proposals, regulators and authorities could place greater reliance on the high standards observed by decision makers in their proposals, he said.