APPOINTED DIRECTORS ‘MUST BE COMPETENT’
Bid to stop country from falling further in CGW rankings
THE appointment of directors, particularly in government-linked companies (GLCs) should be based on competency understanding and experiences on corporate governance.
This was among the suggestions made during a roundtable discussion on the Corporate Governance Watch (CGW) 2016 report held by the Malaysian Institute of Integrity yesterday.
Malaysian Institute of Integrity economic institution director Mohd Ismail Abdul Jalil said the roundtable discussion, which involved experts in the related fields, was aimed at identifying issues that had caused Malaysia to face a sudden drop in the CGW 2016 report, and what could be done to prevent the country from falling further in the rankings.
“The report is important as it discussed the corporate governance practices in the country. Should our rankings and scores continue to drop in the CGW report, we may lose the confidence of our investors and this would effect the country’s economy.”
Ismail said other suggestions mooted by the experts during the two-hour discussion was that directors be required to attend courses on corporate governance and that a limit should be placed on the number of directorship positions a person could be appointed to, particularly in GLCs.
“We will look into the suggestions which we believe are valid and bring it to the agencies, such as the Integrity and Governance Division, so that action can be taken.”
The CGW 2016 report, which featured 11 Asian countries and Australia as the benchmark, was produced by sponsor CLSA in collaboration with the Asian Corporate Governance Association in September.
Malaysia’s position dropped from fourth place in 2014 to sixth place in the 2016 report with a 56 registered score. It was the first time Malaysia recorded a drop in its score since 2010.
At first place was Singapore with a 67 score, followed by Hong Kong (65), Japan (63), Taiwan (60) and Thailand (58).
Malaysia, together with China, Philippines and Indonesia, had registered a fall in rankings and scores. Singapore, Japan, Taiwan, India and Korea have recorded an improvement.