Development of Corporate Governance in Malaysia

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The worst financial crisis that hit Asian countries in 1997 until 1998 was once a turning point for Malaysian corporate governance practices (Corporate Governance Asia, 2010). The post crisis researchers argue that among the significant factors of that crisis are inefficiency of corporate governance as well as weak financial structure of companies. Since the financial crisis was closely related to the failure of public listed companies, the Malaysian government began to realize the importance of improving corporate governance practices in order to stabilize the economic condition (Rahman, 2011). Thus, the corporate governance practices improvement was focusing on legislations and the capital market infrastructure (Rahman, 2011). Subsequent to the Asian financial crisis in 1997, the corporate governance reforms took place in Malaysia. According to Rashidah Abdul Rahman (2011), the reforms began with the formation of High Level Finance Committee in 1998 as the first step in order to carry out a detailed research on governance and to suggest for corporate governance improvements. Meanwhile, the improvement of governance practices will be observed by the Malaysian Institute of Corporate Governance (Rahman, 2011). In late 1990s, the corporate governance practices improvements were obviously stressed on the transparency enhancement in public listed companies. These improvements included the disclosures of directors and CEO’s interests towards companies as well as the required submission of quarterly reports of all public listed companies (Rahman, 2011). Besides, a new Malaysian Code on Takeovers and Mergers was introduced as an improvement to the Malaysian Code of 1987 in the year 1999 (Rahman, 2011). These beginning steps of corporat... ... middle of paper ... ...ce to Enterprise Risk Management (ERM) and Value Creation. 3rd Asia-Pacific Business Research Conference, (pp. 1-10). Kuala Lumpur. Law, A. (2012). Malaysian Code on Corporate Governance 2012 - Implications and Challenges to the Boards of PLCs. Kuala Lumpur: Crowe Horwath. PricewaterhouseCoopers. (2012). Malaysian Code on Corporate Governance 2012. Kuala Lumpur: PricewaterhouseCoopers. Rahman, R. A. (2011). Effective Corporate Governance. Shah Alam: Universiti Publication Centre (UPENA). Securities Commision Malaysia. (2014). General Article: Corporate Governance. Retrieved March 26, 2014, from Securities Commision Malaysia: http://www.sc.com.my/corporate-governance/ Securities Commission Malaysia. (2014). General Section: Audit Oversight Board. Retrieved March 26, 2014, from Securities Commission Malaysia: http://www.sc.com.my/general_section/audit-oversight-board/

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