KUALA LUMPUR, Nov 5 2022 – Malaysia’s publicly listed companies (PLCs) recorded an improvement in their corporate governance (CG) score for 2021.
The Minority Shareholder Monitoring Group (MSWG) said that based on the assessment of 864 companies in 2021, the overall CG score was 83.58 points out of a maximum attainable score of 130 points.
“This is a commendable 5.4% increase from 79.28 points in 2020, especially when considering that PLCs encountered numerous business challenges presented by the COVID-19 pandemic,” MSWG said in a statement today.
According to MSWG, over the past five years, Malaysia’s PLCs have shown consistent and steady improvements in the CG Score from 62.20 points in 2017 to 83.58 points in 2021.
“The upward trend is also observed in the Top 100 PLCs and ACE Market PLCs. This steady improvement is indeed encouraging and is a testament that the ASEAN CG Scorecard (ACGS) is an effective tool for corporate governance reform,” MSWG said.
MSWG said the 2021 assessment is based on disclosures in the latest annual report, CG report and sustainability report for the financial year ended 30 April 2020 to 31 March 2021. Other sources of information include materials on PLCs’ websites, announcements to Bursa Malaysia and any other publicly available information, including media and analysts’ reports, it said.
“The consistent improvement in the average CG scores over the last five years suggested that more and more companies are aligning their CG best practices with international and regional best practices, beyond the requirements of national legislation as measured by the scorecard.
Further analysis of the individual components of the scorecard also demonstrated improvements across all parts, with the role of stakeholders’ parameter improving significantly since 2017,” said Chief Executive Officer of MSWG Devanesan Evanson.
For 2021, 44 trophies were awarded to 34 PLCs under the categories of Excellence Award for CG Disclosure; and Industry Excellence Award for CG Disclosure, it added.
The ACGS is made up of two levels of scoring to capture the implementation of the substance of good corporate governance.
Level 1 scoring consists of the main Scorecard items based on the OECD Principles of Corporate Governance which covers the five areas – rights of shareholders; equitable treatment of shareholders; the role of stakeholders; disclosure and transparency; and responsibilities of the board.
Level 2 scoring consists of bonus items reflecting other emerging good CG practices; and penalty items reflecting actions and events that are indicative of poor CG practices.
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