Public-listed Companies Show Progress In Adopting MCCG Best Practices -- SC

KUALA LUMPUR, Nov 4 (Bernama) -- 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.

The regulator said 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.

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The SC chairman Datuk Mohammad Faiz Azmi emphasised the importance of corporate governance in driving resilient markets, and it must evolve to meet new challenges and drive long-term resilience.

“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 today.

Mohammad Faiz said that 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. 

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The 2024 report, however, highlights three critical areas that require further 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 showed that only 18 per cent 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 per cent 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 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. 

-- BERNAMA