KUALA LUMPUR: Malaysian public-listed companies (PLCs) showed progress in adopting the Malaysian code on corporate governance (MCCG), according to the Securities Commission’s (SC) Corporate Governance Monitor (CG Monitor) 2024 report.
The report, released today, measured the adoption of the MCCG best practices for financial years ending 2022 and 2023.
The regulator said there was a 90% adoption rate for 30 out of the 48 best practices, highlighting the commitment of many companies to sound corporate governance.
SC chairman Mohammad Faiz Azmi emphasised the importance of corporate governance in driving resilient markets, and it must evolve to meet new challenges.
“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.
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.
However, the report highlights three critical areas that require further improvement: refreshing board composition, enhancing shareholder participation, and deeper integration of sustainability governance practices.
The report also showed that only 18% of companies 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 companies were encouraged to look to the Institute of Corporate Directors Malaysia, the registry of which now lists 1,007 board-ready members.
“This offers companies a valuable pool of qualified candidates with fresh perspectives, ensuring boards remain dynamic and capable of addressing evolving governance challenges,” it added.
The report also found that more than 50% of companies continued to conduct virtual or hybrid AGMs this year despite the SC announcing on Aug 1 that all AGMs must be physical or at least hybrid by March 1, 2025.
Notably, the report also noted a significant uplift in sustainability governance, with more than 96% of companies now adopting sustainability issues.
