Malaysia has launched a raft of new corporate governance proposals designed to build its image as a secure, investor-friendly destination.

The five-year Corporate Governance Blueprint makes a total of 35 recommendations to improve transparency and disclosure, and ensure company directors remain accountable through continuing education. Chairman and CEO roles will be separated and an individual may act as an independent chairman for a maximum (and cumulative) nine years. Company directors will also be limited to a maximum five directorships.

Whistle-blowing obligations will be extended through existing legislation to corporate advisers and even secretaries. Poll voting will be mandated by shareholders for related-party transactions and proxies will not be allowed to vote by show of hands where a shareholder has nominated more than one.

The Malaysian Securities Commission (SC) will engage in a public consultation and feedback process on its proposed changes, particularly those relating to CEO/Chairman division and poll voting. It will also set up a working group and special task force to garner opinions on other proposals like: half-yearly reporting, electronic voting, a new code of conduct for institutional investors, director compensation, and third-party funding of litigation to empower shareholders.

According to Business Times, Malaysia’s capital market has grown at an annual 11% since 2000, outstripping the economy and going from RM718 million (US$240 million) in 2000 to RM2 trillion ($66.88 billion) today. The country’s investment management and Islamic finance industries have also reached significant sizes. Zarinah Anwar, the Securities Commission chairperson, said concerns over efficacy of the markets and ability to manage investment risks still needed to be addressed, while the new measures would elevate standards and “inculcate a good corporate governance culture.”

source & article: Business Times