EquitiesFirst has joined forces with Nasdaq Governance Solutions to publish a series of research reports on corporate governance for selected markets in APAC. We have assembled a team of experts on corporate governance in each of the subject markets to provide background and key insights on the space. These reports are for both investors in and management of listed companies focused on creating long-term value in their enterprises.

The topic areas will range from governance best practices, technological shifts, regulatory trends, communication, investor expectations and other topics tailored specifically to each of the regions.

BACKGROUND

After the political scandal and upheavals of Malaysia, the rankings of corporate governance have dropped. However, analysis suggests that Malaysia has done better than commonly perceived. This report takes you through the evolution of corporate governance in Malaysia over the last 20 years.


EXECUTIVE SUMMARY

Rankings of corporate governance of Asian markets by the Asian Corporate Governance Association over the past two decades have placed Malaysia between the fourth and the seventh. The recent 1MDB scandal and political upheavals reversed an upward movement in recent years, and in the latest ranking, it has resulted Malaysian in a joint fifth ranking amongst 12 Asian markets.

Despite the change in ranking, analysis suggests that the regulatory framework and corporate governance for issuers listed on the Malaysian stock exchange are better than commonly perceived.

Some key takeaways from this paper are:

  • Corporate governance rules and guidelines in Malaysia are relatively stricter and more prescriptive than in many other markets.
  • There has been clear progress in the adoption of corporate governance best practices
  • Malaysia is one of the most progressive markets in promoting gender diversity in Asia.
  • The days of long-serving Independent Directors on Malaysian boards are coming to an end and this can help further improve independence, competencies and renewal on boards.
  • Areas of improvement remain in terms of age diversity and director selection processes

Some key takeaways from this paper are:

  • Corporate governance rules and guidelines in Malaysia are relatively stricter and more prescriptive than in many other markets.
  • There has been clear progress in the adoption of corporate governance best practices
  • Malaysia is one of the most progressive markets in promoting gender diversity in Asia.
  • The days of long-serving Independent Directors on Malaysian boards are coming to an end and this can help further improve independence, competencies and renewal on boards.
  • Areas of improvement remain in terms of age diversity and director selection processes


ABOUT THE AUTHOR

“Corporate Governance in Malaysia: Exceeding Expectations” was written by Professor Mak Yuen Teen and co-published by Nasdaq and EquitiesFirst. It is the seventh in the series Corporate Governance: Driving Value Creation in Asia Pacific.

Mak Yuen Teen is Professor (Practice) of Accounting at the NUS Business School and a former Vice Dean of the School. He holds First Class Honours, Masters and PhD degrees in accounting and finance, and is a fellow of CPA Australia. Professor Mak founded the first corporate governance centre in Singapore in 2003 at the NUS Business School and was a member of the Governing Council of the Singapore Institute of Directors.

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