Corporate Governance Blueprint 2011

Corporate
Governance
Blueprint 2011
Towards Excellence in
Corporate Governance

Suruhanjaya Sekuriti Malaysia
3 Persiaran Bukit Kiara
Bukit Kiara
50490 Kuala Lumpur
Malaysia
Tel: [phone] Fax: [phone] www.sc.com.my Copyright
© July 2011 Securities Commission Malaysia

All rights reserved. No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (graphical, electronic, mechanical, photocopying, recording, taping or otherwise), without the prior written permission of the Securities Commission Malaysia.

Perpustakaan Negara Malaysia

Cataloguing-in-Publication Data

Corporate governance blueprint 2011 : towards excellence in corporate governance
Bibliography : p. 77
ISBN 978–983–9386–67–7
1. Corporate governance--Malaysia. 2. Industrial management.
1. Suruhanjaya Sekuriti Malaysia.
658.4009595

This book is printed using eco-friendly recyclable and bio-degradable paper

CONTENTS
FOREWORD BY MINISTER OF FINANCE II, MALAYSIA
MESSAGE FROM CHAIRMAN OF
THE SECURITIES COMMISSION MALAYSIA

v vii INTRODUCTION

1

CHAPTER 1

5

SHAREHOLDER RIGHTS
CHAPTER 2

13

ROLE OF INSTITUTIONAL INVESTORS
CHAPTER 3

21

THE BOARD’S ROLE IN GOVERNANCE
–
–
–
–

ROLES AND RESPONSIBILITIES
INDEPENDENCE OF THE BOARD
COMPOSITION OF THE BOARD
COMMITMENT OF BOARD MEMBERS

CHAPTER 4

43

DISCLOSURE AND TRANSPARENCY
CHAPTER 5

53

ROLE OF GATEKEEPERS AND INFLUENCERS
CHAPTER 6

61

PUBLIC AND PRIVATE ENFORCEMENT
IMPLEMENTATION

69

ACRONYMS AND ABBREVIATIONS

75

REFERENCES

77

ACKNOWLEDGEMENTS

79

FOREWORD by YB DATO’ SERI AHMAD HUSNI HANADZLAH
Minister of Finance II, Malaysia

Malaysia is transforming itself into a high-income nation by 2020. The New Economic Model (NEM) and the Economic Transformation Programme (ETP) provide the economic framework to significantly increase productivity,

References: Asian Corporate Governance Association (ACGA), 2010 “Australian Corporations Act 2001” Cadbury, Sir A., 2002, “Corporate Governance and Chairmanship. A Personal View, Oxford”, Oxford University Press Campbells Cash and Carry Pty Limited v Fostif Pty Ltd, 2006, 229 CLR 386 Employees Provident Fund, 2010, “Corporate Governance Principles and Voting Guidelines” Global Corporate Governance Forum, Winter 2010, “Progress Report”, pg 12 “Hong Kong Securities and Futures Ordinance”, 2003 International Corporate Governance Network (ICGN), 2007, “Statement of Principle on Institutional Shareholder Responsibilities” -----, 2009, “Global Corporate Governance Principles: Revised” “India’s Companies Bill” 2009 Institute of Directors in Southern Africa, 2009, “King Report on Corporate Governance for South Africa (King III)” Institutional Investors Commitee and Minority Shareholder Watchdog Group, 2007, “Guide of Best Practices for Institutional Investors” International Organization of Securites Commissions (IOSCO), 2010, “Principles for Periodic Disclosure by Listed Entities, Final Report” KPMG, 2010, “Fraud Survey 2009” McKinsey & Company, 2007, “Women Matter” Minority Shareholder Watchdog Group, 2010, “Malaysian Corporate Governance Report” Organisation for Economic Co-operation and Development (OECD), 2003, “White Paper on Corporate Governance”, OECD Publishing -----, 2004, “Principles of Corporate Governance” -----, 2011,“The OECD Principles for Good Governance”, -----, 2011, “Corporate Governance in Asia 2011: Progress and Challenges, Corporate Governance”, OECD Publishing PricewaterhouseCoopers Malaysia, 2007, “Board Remuneration & Practices” Securities Commission Malaysia, 2000, “Malaysian Code on Corporate Governance” -----, 2009, “Survey on Malaysian Boards”