Malaysia’s corporate governance remains progressive

The country has developed strong regulatory and market institutions and ratcheted-up enforcement for capital market breaches in the past few years

by ANIS HAZIM / Pic by TMR FILE PIX

ASIAN Corporate Governance Association has consistently ranked Malaysia between fourth and seventh for corporate governance of Asian markets over the past two decades.

The EquitiesFirst and Nasdaq report noted that the 1Malaysia Development Bhd scandal and political upheavals have reversed a recent upward movement, resulting in a joint fifth position in the latest ranking.

“However, Malaysia has been strategic and progressive in making reforms to its corporate governance rules. These are informed by regular regulatory reviews designed to address problems that ail the market,” the report, written by Mak Yuen Teen said.

He stated that Malaysia has developed strong regulatory and market institutions and ratcheted-up enforcement for capital market breaches in the past few years.

Mak, who has monitored Malaysian developments over the last 20 years, said the reality is quite different from common perceptions about the country’s corporate governance.

“While there is no doubt that political and public governance issues will hurt investor confidence, there are many companies and directors in Malaysia who take good corporate governance seriously,” he added.

The capital market regulators are also prepared to introduce necessary reforms to enhance investor protection.

“This is not the same inclination as we observe in some other markets where stock exchanges and regulators lower the bar to attract more listings. As with any market, some companies are well-governed and managed and those that are not. Investors should carefully assess the corporate governance of companies they invest in,” Mak noted.

He said that there is cause for optimism that corporate governance will continue to improve in Malaysia.

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