KUALA LUMPUR: Only 18 per cent of Malaysian public listed companies (PLCs) have adopted the nine-year tenure limit for independent non-executive directors, according to the Securities Commission Corporate Governance Monitor (CG Monitor) 2024.
According to the CG Monitor, the retention of long-serving directors for up to 12 years through the two-tier voting process remains prevalent.
PLCs were encouraged to leverage the resources from the Institute of Corporate Directors Malaysia (ICDM), whose Directors Registry now lists 1,007 board-ready individuals.
The CG Monitor measures the adoption of the MCCG best practices based on Corporate Governance reports issued by PLCs for financial years ending 2022 and 2023.
A total of 1,010 PLCs were covered in the report.
It also found that over 50 per cent of PLCs continued to conduct virtual or hybrid AGMs this year.
However, as announced by the SC in August, all PLCs must conduct physical or hybrid general meetings starting 1 March 2025.
This shift is expected to enhance shareholder engagement, enabling more meaningful participation and interaction at AGMs.
It also found that more than 96 per cent of PLCs adopted practices that focus on board and management oversight of sustainability issues.
These include clearer communication of sustainability strategies and targets, andensuring boards remain informed about relevant sustainability developments.
The report underscored three critical areas that require further improvement namely refreshing board composition, enhancing shareholder participation through physical/hybrid annual general meeting, and deeper integration of sustainability governance practices.
It said 30 out of 48 best practices recorded adoption levels of above 90 per cent.
The SC Chairman Datuk Mohammad Faiz Azmi said corporate governance must evolve to meet new challenges and drive long-term resilience.
"Companies should align their governance with strategic priorities by integratingsustainability, enhancing stakeholder engagement, and renewing leadership to stay agile."
"As Malaysia strives towards a more inclusive and sustainable economy, the SC will continue to support companies in adopting practices that deliver long-term value for both businesses and the wider community," he added.