KUALA LUMPUR: Malaysian public-listed companies (PLCs) showed progress in adopting the Malaysian Code on Corporate Governance (MCCG), according to the Securities Commission Malaysia’s (SC) Corporate Governance Monitor (CG Monitor) 2024. The CG Monitor, released today, measures the adoption of the MCCG best practices based on Corporate Governance reports issued by PLCs for financial years ending 2022 and 2023.
According to BERNAMA News Agency, the report indicated that 30 out of the 48 best practices recorded adoption levels above 90 per cent, highlighting the commitment of many PLCs to sound corporate governance. The SC chairman Datuk Mohammad Faiz Azmi emphasised the importance of corporate governance in driving resilient markets, stating that it must evolve to meet new challenges and drive long-term resilience. He asserted the need for companies to align governance with strategic priorities by integrating sustainability, enhancing stakeholder engagement, and renewing leadership to stay agile.
Mohammad Fai
z highlighted that as Malaysia aims for a more inclusive and sustainable economy, the SC would continue to support companies in adopting practices that deliver long-term value for businesses and the wider community. However, the 2024 report identifies three critical areas for improvement: refreshing board composition, enhancing shareholder participation through physical and hybrid annual general meetings (AGMs), and deeper integration of sustainability governance practices.
The report also revealed that only 18 per cent of PLCs have adopted the nine-year tenure limit for independent non-executive directors, signifying the necessity for more proactive measures to refresh board composition. The retention of long-serving directors for up to 12 years through the two-tier voting process remains prevalent. The SC encouraged PLCs to utilize resources from the Institute of Corporate Directors Malaysia, which now lists 1,007 board-ready individuals in its Directors Registry, offering a valuable pool of qualified cand
idates with fresh perspectives.
Additionally, the CG Monitor 2024 found that over 50 per cent of PLCs continued to conduct virtual or hybrid AGMs this year. However, as announced by the SC on August 1, all PLCs must conduct physical or hybrid general meetings starting March 1, 2025. This shift aims to enhance shareholder engagement, enabling more meaningful participation and interaction at AGMs.
The report also noted a significant uplift in sustainability governance, with more than 96 per cent of PLCs now adopting practices that focus on board and management oversight of sustainability issues, including clearer communication of sustainability strategies and targets.
Source: ABN News