Govt weighs regulatory subsidiary for Bursa

KUALA LUMPUR: The government is considering the establishment of a regulatory subsidiary for Bursa Malaysia to improve governance and address risks related to conflicts of interest, says Deputy Minister of Finance I Datuk Seri Ahmad Maslan.

Its establishment will also align with global principles, which stress the need for a clear division of responsibilities among various authorities, according to Ahmad Maslan.

He said transparency in procurement awards and quality execution of any government business are now the rule rather than the exception.

“Signs of confidence and commitment in our global growth drivers indicate that we are on the right track.

“The rise in both foreign direct investment and domestic direct investments shows that the foreign and domestic investors are once again confident in Malaysia’s economic growth and potential,” he said in his keynote address during the 2023 Organisation for Economic Co-operation and Development (OECD)-Asia Roundtable on Corporate Governance.

Ahmad Maslan also launched the revised Group of 20 (G20)/OECD principles of corporate governance (principles) – a global benchmark for legal, regulatory and institutional frameworks for corporate governance, that were endorsed at the G20 Leaders’ Summit in New Delhi last month.

The revised principles aimed to address the emerging changes and challenges faced by corporations globally, such as those surrounding climate change and digitalisation, leading to new uncertainties and vulnerabilities.Securities Commission chairman Datuk Seri Dr Awang Adek Hussin said support and guidance for small and medium enterprises (SMEs) to mitigate risks from supply chain vulnerabilities and disruption are crucial.

“The SC is working closely with the relevant agencies to develop a governance toolkit for SMEs and at the end of this month, our affiliate Capital Markets Malaysia will also be issuing a simplified environmental and social governance disclosure guide for SMEs,” he said in his opening address yesterday.

Trustee of the IFRS Foundation and senior adviser at MUFG Bank Masamichi Kono said government leadership is key in terms of climate goals and energy transition.

“There seems to be a growing trend where the governments’ approach is for the private sector to take the lead in identifying the best practices.

“The public-private partnership model is now seen in many parts of the climate policy arena,” he said during a panel discussion.

Apart from sustainability and resilience, the revised principles also sought to promote a clear regulatory framework.

Valoris Stewardship Catalysts managing director Mike Lubrano said recognising company groups in the principles is long overdue.

“In terms of how we can improve corporate governance for company groups, each jurisdiction needs to define what it means to be a company group and to define it in a way that is relevant for the challenges that are being presented in that market,” he said.

Meanwhile, Singapore Exchange regulation chief executive officer Boon Gin Tan said there is room for improvement in the aspect of diversity within Asian companies in terms of implementing the principles of corporate governance,.

“The reason why we want a diverse board is not about being politically correct, or about giving other people opportunities, it is actually about better decision making,” he said.

On this note, Awang said effective since June, listed companies on Bursa must have at least one woman on the board.

He added that companies must also work to meet the 30% target and to date, 40% had met the goal.