Companies Commission Malaysia revises Code of Ethics for Company Director and Company Secretary

30 October 2023

On 11 September 2023, the Companies Commission of Malaysia (“CCM”) issued a revised Code of Ethics for Company Director and Company Secretary (“Revised Code”). The Revised Code supersedes the previous Code of Ethics issued by CCM.

This article provides a brief overview of the key changes.

Directors

Some of the new key obligations on directors are as follows:

  • Directors are to ensure the company has established an adequate procedure to reasonably protect both the company and top management from the liabilities in accordance with corporate liability provisions under section 17A of the Malaysian Anti-Corruption Commission Act 2009;
  • Directors must be accountable for the environmental, social, and governance (ESG) practices in the company;
  • Directors must adopt policies and procedures to prevent the company from being exposed to anti-money laundering and counter-financing of terrorism (“AML/CFT”) activities, and to ensure shareholders and employees are kept abreast of matters under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (“AMLA”) and the corresponding Guidelines;
  • Directors are to attend continuous professional development programmes to keep abreast of corporate governance developments and regulatory requirements;
  • The existing requirement for company directors to be conscious of the interest of shareholders employees, creditors and customers of the company has been expanded to include the interest of the suppliers of the company;
  • The existing requirement for company directors to immediately disclose all contractual interests whether directly or indirectly with the company has been expanded to specify the requirement for full disclosure; and
  • The existing requirement for company directors to attend meetings has been expanded to include participating at meetings, and to know what is required of the board and each of its directors, and to discharge those functions.

Company secretaries 

The Revised Code requires company secretaries to carry out the following:

  • Take necessary steps to ensure compliance with relevant legislations, regulations, procedures, rules and guidelines governing a company;
  • Keep abreast with the requirements of the practising certificate issued under section 241 of the Companies Act 2016;
  • Facilitate communication among the board members, the board and management, the chairman and the chief executive officer, the company and its shareholders, and the company and its stakeholders; and
  • Undertake AML/CFT measures as required under Part IV (Reporting Obligations) of the AMLA.