Introduction of Corporate Governance: Company Law Malaysia

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Introduction of corporate governance
After the 1997 Asian Financial Crisis, the investor confidence in Malaysia was severely affected. Since the issuance of the Malaysian Code on Corporate Governance in 2000, the Securities Commission Malaysia has continuously been improving their governance framework, where the code was revised and securities were amended. In 2011, the Corporate Governance Blueprint was issued, which was used as a base to deliver the Malaysian Code on Corporate Governance 2012 (MCCG 2012). Corporate governance is generally the process and structure used to direct and manage the business and affairs of the company while defining the relationship between stakeholders and management by taking their interests into account . For listed companies like Makkaferri Berhad to enhance board and managerial effectiveness, they are required to comply with MCCG 2012 and report their compliance in their annual report.

Principle 1: Establish clear roles and responsibilities
Under the MCCG 2012, it states that the board should ensure that it is supported by a suitably qualified and competent company secretary . The role of a secretary is essential in every company. Apart from acting as a link between the company and various stakeholders, they are also in charge in providing support by ensuring that board policies and procedures are adhered to. Generally, the board regularly consults the secretary on procedural and regulatory requirements. As Makkaferri Berhad does not have any secretary, it is recommended for the company to appoint a suitably qualified and competent secretary who can support the board in carrying out its roles and responsibilities. Before the selection process, the company should list down the necessary require...

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...69E, they should give notice in writing to inform the company of their interests, where this notice shall be given within one month if they were substantial shareholder on the date when this division came into operation, or within seven days if they became substantial shareholders after that date.

Conclusion
Although it is not a law to adopt the standards, companies should go beyond the minimum prescribed by regulation and adopt this as part of their governance structure and processes. As the code is not universal or perfectly suitable for each and every company, they can determine the best approach for adopting the principles to suit their individual needs. With strong governance, not only will there be more effective and efficient decision making, it also contributes to better access to capital and information for sustainability and prosperity in the long run.

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