Securities Commission Malaysia updates Code on Corporate Governance to promote board leadership and oversight of sustainability

28 May 2021

On 28 April 2021, the Securities Commission Malaysia (“SC”) issued the updated Code on Corporate Governance (“CCG”) to introduce new best practices and further guidance to strengthen the corporate governance culture of listed companies.

Updates to the CCG include:

• discouraging the appointment of active politicians on the boards of listed companies; 
• recommending that the two-tier voting process be implemented for re-appointment of independent directors with tenures of more than nine years. The two-tier voting process was first introduced in 2017. It acts as a speed bump for boards and shareholders to enable careful evaluation of the decision to retain independent directors with tenures of more than 12 years and provide minority shareholders the opportunity to vote against such retention in the second tier of the voting process; 
• recommending all listed companies to have a board composition of at least 30% women directors; and 
• addressing the urgent need for companies to manage environmental, social and governance (ESG) risks and opportunities.