The Corporate Governance (CG) Survey Report 2004, released yesterday, showed a high level of compliance with the local code on CG among publicly listed companies but they lagged when it came to complying with the recommended international best practices (IBP).
Overall, there was a general improvement over the year on compliance with local and international CG requirements, said Securities Commission chairman Tan Sri Md Nor Md Yusof.
Md Nor was speaking after launching the report at a half-day, Enhancing Standards of CG Practice seminar in Kuala Lumpur.
He said most companies had complied with Malaysia's CG code but there were still areas for improvement in IBP.
Md Nor said it was also encouraging to note that some government-linked companies (GLCs) were among the top 10 most compliant firm.
The report, based on a survey of 97 top capitalised companies on Bursa Malaysia, was a joint effort of the Nottingham University Business School (NUBS) and Minority Shareholder Watchdog Group.
Of the 97 companies surveyed, the score for basic compliance (CG principles and best practices enjoined by the code and the listing rules) was 40% and for IBP it was 26%. The overall weighted CG score was 85%.
In terms of overall weighted CG compliance score, Public Bank led the top 10 list with 85%, improving from its eighth ranking in the first survey in 2003.
The bank came ahead of United Plantations, Telekom Malaysia Bhd, AMMB Holdings Bhd, Malayan Banking Bhd, Tenaga Nasional Bhd, British American Tobacco, JT International Bhd, IJM Corporation Bhd and Tanjong Plc.
The top 10 laggards were Sarawak Enterprise, Hume Industries Bhd, YTL Cement, YTL Corporation Bhd, Malaysian Pacific Industries Bhd, WTK Holdings Bhd, Magnum Corporation Bhd, Hong Leong Industries Bhd, Oriental Holdings Bhd and OYL Industries Bhd.
By sector, companies in the financial industry had better compliance levels in the three categories of overall weighted CG score, IBP score and basic compliance score, followed by plantation sector players.
The least performing firms were in the consumer and technology sectors.
NUBS associate professor of accounting, Salleh Hassan said in his presentation that the high level of CG compliance was an achievable target but there was a need to focus more on IBP as the latter would differentiate companies.
In terms of directors salaries, he said that 21% of the companies showed the precise amount paid to the highest paid director/officer. Bernama
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