1. Introduction: corporate governance| 2|
2. Introduction: selected companies| 3|
3. Analysis of the two companies on the practice of corporate governance| 4| 4. Application of corporate governance (detail review) - Malayan Banking berhad | 7| 5. Application of corporate governance (detail review) - Public Bank Berhad | 15| 6. Conclusion| 22|
7. References| 23|
8. Appendix: a. The Malaysian Code on Corporate Governance (Code) b. Statement of corporate governance – Malayan Banking Berhad c. Statement of corporate governance – Public Bank Berhad| |
INTRODUCTION: CORPORATE GOVERNANCE
Corporate governance is the process and structure used to direct and manage the business and affairs of the company towards enhancing business prosperity and corporate accountability with the ultimate objective of realizing long term shareholder value, whilst taking account the interests of other stakeholders The Malaysian Code on Corporate Governance (Code), was first issued in March 2000, and then was later revised in 2007. The Code essentially aims to set out principles and best practices on structures and processes that companies may use in their operations towards achieving the optimal governance framework. These structures and processes exist at a microlevel which includes issues such as the composition of the board, procedures for recruiting new directors, remuneration of directors, the use of board committees, their mandates and their activities.
Listing Requirements of Bursa Malaysia requires all listed companies to state in their annual reports: • How they have applied the principles set out in Part 1;
• The extent to which they have complied with the best practices set out in Part 2; • Identify and give reasons for areas of non-compliance; and • Where applicable, state the alternative practice(s) adopted.
The code also states that the boards are not required to comment on every item of the revised Code which they have complied with, but to disclose each area of non-compliance.
Sanctions for non-disclosure
Where a company fails to disclose the matters in its annual report, set out in para 4.1 of the code, Bursa Malaysia can take action against the company or its directors as set out in the Listing Requirements of Bursa Malaysia.
INTRODUCTION: SELECTED COMPANIES
For this Assignment we were asked by our lecture to analyze the annual reports of two companies listed in the main board of bursa Malaysia and compare how they apply corporate governance. The two companies I selected for this assignment are; 1- Malayan Banking Berhad (Maybank)
2- Public Bank Berhad
1- Malayan Banking Berhad (Maybank) was incorporated on 31 May 1960 and commenced operations on 12 September 1960. On 17 February 1962, the bank was listed on the Kuala Lumpur Stock Exchange (now known as Bursa Malaysia). Today, it is the largest financial services group in Malaysia. Its extensive products and services include commercial banking, investment banking, Islamic banking, offshore banking, leasing and hire purchase, insurance, factoring, trustee services, asset management, stock broking, nominee services, venture capital and Internet banking. The Maybank Group has an extensive global network of 1,750 branches in 14 countries namely Malaysia, Singapore, Philippines, Brunei Darussalam, Indonesia, Vietnam, Cambodia, Papua New Guinea, Hong Kong SAR, People's Republic of China, Bahrain, Uzbekistan, Pakistan, Great Britain and the United States of America. 2- Public Bank Berhad was Established in 1966 by its Founder and Chairman, Tan Sri Dato’ Sri Dr. Teh Hong Piow, Public Bank is a leading provider of financial services in Malaysia with banking operations in Hong Kong and China, Cambodia, Vietnam, Laos and Sri Lanka. In Malaysia, Public Bank is one of the most efficient banks as reflected by its low cost to income ratio. The...