The Securities Commission Malaysia (SC) released the Malaysian Code on Corporate Governance (CG) 2012 (MCCG 2012) as the first major deliverable of the Corporate Governance Blueprint 2011 (Blueprint) launched in July last year.
Aimed at enhancing board effectiveness of listed companies through
strengthening board composition, reinforcing the independence of
directors and fostering commitment of directors, the new code will
supercede the Malaysian Code on Corporate Governance 2007.
"In essence, the Malaysian Code on Corporate Governance 2012 and the
Blueprint seek to embed a culture of good corporate governance,
addressing the key components of the corporate governance ecosystem to
strengthen self and market discipline. Boards and shareholders must
embrace the fact that good business is not just about achieving the
desired financial bottom line by being competitive. It is equally about
creating shareholder value, which can only be sustained by well-informed
strategic direction and engaged oversight, which stretch beyond
short-term financial performance," said Tan Sri Zarinah Anwar, Chairman
of the SC.
The new CG code sets out eight broad principles and specifies the
best practices of good corporate governance at a higher level than that
expected by regulations. Each principle is followed by a series of
recommendations, which include the formalisation of a board charter,
capping of the tenure of independent directors to nine years and the
separation of chairman and CEO roles. It also elaborates on the need for
boards to recognise and manage risks and for companies to encourage
shareholder participation.
To support and enhance the capacity of directors to fulfil the
demands of their role, the new code puts greater emphasis on the role of
the Nominating Committee, chaired by a senior independent director, in
relation to the recruitment, assessment, and training needs of
directors.
"Good corporate governance cannot be achieved merely on the strength
of regulations. Directors have a duty not just in setting strategic
direction and overseeing the conduct of business in compliance with
laws, they should also be effective stewards and guardians of the
company in respect of ethical values, and ensuring an effective
governance structure for the appropriate management of risks and level
of internal controls," added Tan Sri Zarinah.
The MCCG 2012 will be effective on 31 December 2012 although listed
companies are encouraged to make an early transition to the principles
and recommendations elaborated in this new code.
No comments:
Post a Comment