The Refreshed Malaysian Code on Corporate Governance 1/1

Last week saw the launch of the revised Malaysian Code on Corporate Governance (MCCG) by the Securities Commission. As usual, the MCCG would be incorporated in the Listing Requirements of Bursa Malaysia and must be complied with by public listed companies in Malaysia. For financial institutions, the Policy Document on Corporate Governance is another layer of expectations which must also be observed.

The MCCG focuses on three key principles, Board leadership and effectiveness, Effective Audit and Risk Management and Integrity in Corporate Reporting and Meaningful Relationship With Stakeholders.

To ensure effective implementation, the MCCG is expected to be implemented with CARE - Comprehend, Apply and REport. Comprehend means the board is expected to understand and internalise the spirit and intention behind the prescribed principles and recommended practices including their intended outcomes. Apply is where the substance of the recommended practices are implemented to achieve the intended outcomes. Report requires a fair and meaningful disclosure on the company's corporate governance practices is made. It is hoped that a strong culture of governance would be practised across the company.

Where companies are not able to apply the practices, they are expected to identify and implement alternatives practices which would result in the same outcomes. 

The MCCG also has Step-Up practices which are expected to be applied by Large Companies. These are exemplary practices which support companies in moving towards excellence in corporate governance. Large companies are the top 100 companies listed on Bursa Malaysia and those where their market value exceed RM 2 billion at the beginning of the financial year.