Securities Commission chairman Datuk Mohammad Faiz Azmi
KUALA LUMPUR: Malaysian public-listed companies (PLCs) are showing progress in adopting the Malaysian Code on Corporate Governance (MCCG), according to the Securities Commission (SC) Corporate Governance Monitor (CG Monitor) 2024 report.
The CG Monitor, released yesterday, measures the adoption of the MCCG best practices based on corporate governance reports issued by PLCs for the financial years ending 2022 and 2023.
The regulator said that 30 out of the 48 best practices recorded adoption levels above 90%, highlighting the commitment of many PLCs to sound corporate governance.
SC chairman Datuk Mohammad Faiz Azmi emphasised the importance of corporate governance in driving resilient markets and the need to evolve to meet new challenges.
“Companies should align their governance with strategic priorities by integrating sustainability, enhancing stakeholder engagement, and renewing leadership to stay agile,” he said in a statement yesterday.
As Malaysia strives towards a more inclusive and sustainable economy, the SC would continue supporting companies in adopting practices that deliver long-term value for businesses and the wider community, Mohammad Faiz said.
The 2024 report, however, highlighted three critical areas that require further improvement – refreshing board composition, enhancing shareholder participation through physical and hybrid AGMs, and deeper integration of sustainability governance practices.
The report also showed that only 18% of PLCs have adopted the nine-year tenure limit for independent non-executive directors, highlighting the need for more proactive measures to refresh board composition.
Meanwhile, the retention of long-serving directors for up to 12 years through the two-tier voting process remains prevalent.
The SC said PLCs were encouraged to leverage the resources from the Institute of Corporate Directors Malaysia, whose Directors Registry now lists 1,007 board-ready individuals.
“This offers PLCs a valuable pool of qualified candidates with fresh perspectives, ensuring boards remain dynamic and capable of addressing evolving governance challenges,” it added.
The CG Monitor 2024 also found that over 50% of PLCs continued to conduct virtual or hybrid AGMs this year.
However, as announced by the SC on Aug 1, all PLCs must conduct physical or hybrid general meetings starting March 1, 2025, and this shift is expected to enhance shareholder engagement, enabling more meaningful participation and interaction at AGMs.
Notably, the report also noted a significant improvement in sustainability governance, with more than 96% of PLCs now adopting practices that focus on board and management oversight on sustainability issues, including clearer communication of sustainability strategies and targets.
Introduced in 2000, the MCCG ESG calls for measures that are in line with global regulatory trends for listed companies.
The MCCG emphasises the need for corporate boards to integrate sustainability considerations in their decision-making in relation to formulating corporate strategy and governance. — Bernama
