This marks a development in the area compared to the 1st MICG report published in 2017
by ASILA JALIL/ pic by BLOOMBERG
THE top 100 companies listed on Bursa Malaysia have improved efforts to combat corruption since 2017.
According to Malaysian Institute of Corporate Governance (MICG) 2019 report on Transparency in Corporate Reporting (TRAC), 99 of the companies listed provided a whistleblowing channel where employees can report suspected breaches of anti-corruption policies in the companies.
Out of the 99, 83 companies allow confidential and/or anonymous reporting.
This shows a development in the area compared to the first report published in 2017, where only 85 companies had confidential reporting channel and the remaining 15 companies did not fulfil the criteria.
Four other areas that showed development are commitment to legal compliance including anticorruption laws; code of conduct or anti-bribery and corruption policy that apply to both employees and directors; publicly stating their commitment to anti-corruption and enabling employees to raise concerns; and report violations without the risk of reprisal.
“On this basis, we find that many companies have made combating corruption a priority matter since 2017.
“However, even within this list of top five achievements, there are still many gaps and a significant number of companies still fall short of the maximum points available for these five items,” the report stated.
The report also ranked top 10 companies that scored the highest in corporate reporting transparency.
Malaysian Resources Corp Bhd is ranked first followed by KLCC Property Holdings Bhd and KLCC Real Estate Investment Trust, Malaysia Airports Holdings Bhd, AMMB Holdings Bhd, Unisem (M) Bhd, MISC Bhd, Sime Darby Bhd, Petronas Chemicals Group Bhd, Petronas Gas Bhd and Petronas Dagangan Bhd.
The TRAC 2019 project was designed to establish the current status of the anti-corruption practices of the country’s top 100 listed companies based on information available in the public domain. The size of the company was defined by the market capitalisation value as stated by Bursa Malaysia as at Dec 31, 2018.
“For the TRAC Report 2019, we chose to reflect the government’s national agenda to combat corruption.
“Especially in view of the introduction of corporate liability under the new Section 17A of the Malaysian Anti-Corruption Commission Act 2009 — which will take effect on June 1, 2020 — MICG decided that the 2019 assessment should focus on the reporting of the company’s anti-corruption programme. Scores for this dimension were very low in 2017,” MICG president Datuk Yusli Mohamed Yusoff said.
Meanwhile, Bursa Malaysia chairman Datuk Shireen Ann Zaharah Muhiudeen (picture) said both private sector and the business community must play their part as the country moves forward in the anti-corruption agenda.
“Corruption cannot be justified as a cost of doing business. The impact of the corporate liability provisions is that we cannot adopt anything other than international best practices,” she said.
The report also showed that 89 companies enabled employees and others to raise concerns and report violations without risk of reprisal, which is the highest number recorded in the full result.
Meanwhile, 82 companies had no public domain statement containing a commitment to conduct a bribery risk assessment periodically, which is the weakest area recorded in the report.
“Bearing in mind that risk assessment is the foundation of an effective anti-corruption programme, this is an area which should be addressed as a priority.
“With risk management being both corporate governance and a listing requirement, incorporating bribery and risk management into the Enterprise Risk Management programme should be manageable for Malaysia’s top companies, even if an element of specialist technical knowledge is required to do this accurately,” the report said.
The report also stated that the average state of development for the 100 companies is 54%, which is 24% higher than the score reached in 2017.