The Corporate Governance in Malaysia is set by the following:-
- Malaysian Code on Corporate Governance 2012
- Chapter 15 Corporate Governance of the listing requirements
- The Green Book – issued by the Putrajaya Committee (2006)
The objective of good Governance shall be Performance Management of Directors and Top Management, and the achievement of corporate social responsibility.
A corporation is a legal entity. Profit-oriented corporation creates conditions for people to produce business results bound by corporate legislation. If a corporation fails, shareholders normally only stand to lose their investment. Corporate Governance and strategic oversight is necessary for a corporation to stand strong as a good corporate citizen when surrounded by a competitive environment.
The shareholders are the top and final authority in the chain of command, but because it is unrealistic for a large number of shareholders to give the business the detailed attention it requires, they elect a board of directors and give that board considerable authority. The board therefore, becomes second in command and is responsible to the shareholders’ for the successful operations of the business.
The Role and Responsibilities of the Board of Directors
- Reviewing and adopting a strategic plan for the company
- Overseeing the conduct of the company’s business
- Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures
- Succession planning
- Overseeing the development and implementation of a shareholder communications policy for the company
- Reviewing the adequacy and the integrity of the management information and internal controls system of the company