Corporate Governance in Malaysia
Malaysia has a range of corporate governance reforms that have been strengthened over the years. The Companies Act 2016 governs the regulatory framework of companies set up in Malaysia.
The Malaysian Code on Corporate Governance (MCCG) introduced in 2000 has been a significant tool for corporate governance reform, and has influenced corporate governance practices of companies positively. The MCCG reflects global principles and internationally recognised practices of corporate governance which are above and beyond the minimum required by statute, regulations or those prescribed by Bursa Malaysia Berhad (the stock exchange of Malaysia). The MCCG was reviewed in 2007 and 2012 to ensure that it remains relevant and is aligned with globally recognised best practices and standards. In April 2017, the MCCG was updated to take on a new approach to promote greater internalisation of corporate governance culture.
The Corporate Governance Guide (“Guide”) by Bursa Malaysia Berhad (“Bursa”) seeks to enrich the application and actualisation of corporate governance practices by providing practical guidance to listed issuers. It is also hoped that the Guide will cultivate listed issuers’ appreciation on the drivers of sound corporate governance. The Guide was developed to reflect the new modes of thinking as well as the “CARE” (i.e. C – Comprehend; A – Apply and Re – Report) concept that underpins the MCCG. Premised on the objective of bringing about cultural and behavioural change, the Guide serves to provide insights into best practices of corporate governance, including how such practices can be applied and actualised in substance rather than in form, so as to help businesses in building sustainable value. There is also the CG disclosure framework under Bursa Malaysia Securities Berhad Listing Requirements.
The various Government initiatives (i.e. the Malaysian Anti- Corruption Commission (MACC) (Amendments) Act 2018, Guidelines on Adequate Procedures 2018 and the National Anti-Corruption Plan (NACP) 2019 -2023), deliver key messages that strong corporate governance is fundamental for the sustainability of the Malaysian economy. Section 17A of the MACC Act 2019, came into force on 1 June 2020, focuses on the new corporate liability provisions.
(last updated 2 July 2020)
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Resources:
Contact:
Malaysian Institute of Corporate Governance (MICG)
3A-02 Block F
Pusat Dagangan Phileo Damansara 1
9 Jalan 16/11, Off Jalan Damansara
46350 Petaling Jaya
Selangor Darul Ehsan
Malaysia
+603 7957 6799
About:
MICG was established in March 1998 following recommendation by the High Level Finance Committee on Corporate Governance. The Institute was incorporated as a company limited by guarantee, with founding members consisting of the Federation of Public Listed Companies (FPLC), Malaysian Institute of Accountants (MIA), Malaysian Institute of Certified Public Accountants (MICPA), Malaysian Institute of Chartered Secretaries and Administrators (MAICSA), and Malaysian Institute of Directors (MID).
MICG’s principal activities are to promote and encourage corporate governance development, provide education and training for the benefit of its members and other interested institutions or bodies in Malaysia.
