According to the Securities Commission’s (SC) website, MCCG 2017, which was introduced in April 2017, comprise 34 standard practices to support three key main principles, which are board’s leadership and effectiveness; effective audit, risk management, and internal controls; and corporate reporting and relationship with stakeholders. In addition, the MCCG 2017 has laid out two additional practices meant for large corporations and four step-up practices to encourage companies to adopt even higher governance standards. Last year, the MCCG 2017 got a little boost from the SC with the introduction of “Conduct of Directors of Listed Issuers and Their Subsidiaries”. With the exception of Chapter 5 on Group Governance, which was effective from Jan 1 this year, the rest of the guidelines were already effective since July 30 last year. In essence, under the guidelines, a director must exercise his/her powers for a proper purpose and in good faith in the best interest of the company. A director, who is appointed by virtue of his/her position as a representative of a shareholder, must act in the best interest of the company in which he/she sits as a board member and not his/her nominator. Key lapses we see is in the area of independence of directors, both in terms to tenure and numbers as a percentage of total number of directors. Lapses are also seen in number of women directors on the board of companies while in terms of disclosure of remuneration, some companies are still shying away from disclosing salaries of their top five personnel of their senior management.

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theStar