Draft MSME governance code for consultation

KUALA LUMPUR: The draft Governance Code for Malaysian micro, small and medium enterprises (MSMEs) has been issued for public consultation.

The draft was issued by the SME Governance Working Group, chaired by the Securities Commission (SC), and aims to improve transparency, integrity and to ensure a competitive business environment.

The SME Governance Working Group was formed with the support of the Entrepreneur and Cooperative Development Ministry and comprises representatives from the ministry, SME Corp and the Malaysian Institute of Corporate Governance.

“Strengthening the resilience of MSMEs through a stronger governance foundation is critical to thrive in today’s dynamic market,” SC chairman Datuk Seri Awang Adek Hussin said in a statement.

Adoption of the said code by MSMEs will be voluntary, the SC said.

The code complements other existing guidance available for MSMEs including the Simplified ESG Disclosure Guide and the ESG Quick Guide for MSMEs, it said.

He said it was important to promote good governance practices among MSMEs, which accounts for 97.4% of the country’s business establishments.

The code focuses specifically on governance practices, including those required to ensure clear accountability for decision making in relation to the management of sustainability risks and opportunities of a company.

The governance practices in the code are recommended based on the size and business maturity spectrum of MSMEs, it noted.

The code also aligns with the principles of the Malaysian Code on Corporate Governance, which is aimed at listed companies.

The SC said the code’s implementation will be led by the Malaysian Institute of Corporate Governance, together with SME Corp and other relevant agencies.

Interested parties and the public are invited to submit their comments on the draft code at www.micg.org.my/msmecode before April 30.