Compliance level of public listed companies improving – SIDC

KOTA KINABALU: The latest revision of the Malaysian Code on Corporate Governance (MCCG) which was released early this year emphasises on the internalisation of corporate governance culture.

However, it is aimed not only at public listed companies, but also non-listed entities including state-owned enterprises, small and medium enterprises (SMEs) and licensed intermediaries to embrace the code, said Securities Industry Development Corporation (SIDC) Professional Development Director, Salleh Hassan.

He also said that the compliance level of public listed companies was improving annually but noted that it was a challenge to get smaller ones to improve.

He added that it would benefit the smaller business entities when they adopt the code as this would send a positive signal to the market and that adopting the code would help create a good ecosystem.

The latest revision entails 36 practices with focus on three principles namely, board leadership and effectiveness; audit, risk management and internal controls; and corporate reporting and relationship with stakeholders.

One of the facets mentioned during the press conference was the practice of the board of company establishing a Code of Conduct and Ethics for the company, and together with management implement its policies and procedures which include managing conflicts of interest, preventing abuse of power, corruption, insider trading and money laundering.

The new code also mentioned the board of company establishing, reviewing and together with the management implementing policies and procedures on whistleblowing.

The first batch of companies required to report their application of the code will be those with financial year ending 31 December 2017.

Also mentioned was the corporate governance threeyear strategic plan which included enhancing the Securities Commission Malaysia’s (SC) corporate surveillance and enforcement of corporate governance breaches; introducing a corporate governance framework for licensed and registered intermediaries; strengthening the corporate governance ecosystem through the establishment of the Institute of Corporate Directors Malaysia and Corporate Governance Council; increase women participation on boards from the current 17.7 percent to 30 percent for the top 100 companies listed in Bursa Malaysia; leveraging technology for monitoring and reporting of corporate governance practices, and facilitating shareholder participation and voting at general meetings; and inculcating corporate governance early among SMEs and youth through the introduction of a corporate governance toolkit and corporate governance in tertiary curriculum respectively.

The time frame to formulate the corporate governance toolkit will be between 2017 and 2020.

Salleh (front row, second left) with the participants attending the Malaysian Code on Corporate Governance training held at a hotel near here yesterday.