SC to develop governance guidance for SMEs

KUALA LUMPUR: The Securities Commission Malaysia (SC) is working closely with relevant agencies to develop an environmental, social and corporate governance (ESG) toolkit for small and medium enterprises (SMEs).

Its affiliate, Capital Markets Malaysia will also be issuing a Simplified ESG Disclosure Guide for SMEs, said SC chairman Datuk Seri Dr Awang Adek Hussin.

He noted that support and guidance for SMEs are crucial to mitigate risks from supply chain vulnerabilities and disruption.

"We are also supporting the inculcation of corporate governance across the supply chain, particularly by SMEs," he said in his keynote address at the 2023 Organisation for Economic Co-operation and Development (OECD)-Asia Roundtable on Corporate Governance here today.

Awang Adek said Malaysia's guidelines are already broadly aligned with the updated G20/OECD’s Principles of Corporate Governance, endorsed by leaders last month.

At the same time, the Advisory Committee on Sustainability Reporting is developing a national-level approach to address the International Sustainability Standards Board sustainability disclosure standards.

"Malaysia has always been exemplary in terms of corporate governance. The OECD appreciated Malaysia's move to start our governance journey very early and we have made good progress.

"It's an ongoing exercise to get our companies to be better aligned, to be better prepared in their sustainability journey," he said.

Awang Adek said for the next 18 months, the focus will also be on current governance priorities, adding that the SC will continue to address regulatory response to promote board governance.

The revised G20/OECD Principles emphasise the responsibilities of the board, including the importance of measures to enhance board and management diversity.

On that note, in June 2023, Bursa Malaysia made it mandatory for listed companies to have at least one woman on their board of directors (BODs).

The mandatory requirement came after the revision of the Malaysian Code of Corporate Governance 2021 by the SC, which recommended that women directors comprise at least 30 per cent of all BODs.

In August, the SC, Institute of Corporate Directors Malaysia and Bursa Malaysia rolled out the Leading for Impact Programme, a new mandatory onboarding training on sustainability for current and future directors of listed firms.

Awang Adek added that to-date, more than 1,000 directors have signed up to participate in the programme. - Bernama