Kenyataan Media
BURSA MALAYSIA’S CG ANALYSIS REPORT SHOWS IMPROVEMENTS IN CG DISCLOSURES IN 2016
Kuala Lumpur, 22 December 2016 – Bursa Malaysia Berhad’s (“Bursa Malaysia” or “the Exchange”) third Corporate Governance (“CG”) Analysis Report (“the Report”) showed improvements in listed issuers’ corporate governance disclosures in 2016 as compared to their disclosures in 2014. The quality of disclosures for each of the Six Principles assessed under the Malaysian Code of Corporate Governance (MCCG) 2012 was satisfactory.
The key highlights of the findings and observations showed that overall there was a high level of adherence to the Listing Requirements, and embracement of MCCG Principles and Recommendations.
The Exchange had undertaken a review of corporate governance disclosures in 280 listed issuers’ annual reports in 2014 and provided them with their scores. The review in 2016 marked the second time that these listed issuers’ corporate governance disclosures were reviewed. The review was undertaken to assess whether these listed issuers had improved their disclosures, further to our advocacy programmes and engagement activities carried out subsequent to the issuance of the first Report in 2014.
The quality of disclosures among all listed issuers had improved on average from approximately 61 per cent in 2014 to approximately 69 per cent in 2016. Large cap companies achieved average scores of 72 per cent as compared to 64 per cent in 2014, mid-cap companies scored 67 per cent as compared to 60 per cent in 2014 while small-cap companies recorded significant improvements from 60 per cent in 2014 to approximately 68 per cent in 2016. Furthermore, 30 per cent of small cap listed issuers scored bonus points for meaningful disclosures which provided insights into the listed issuers’ corporate governance practices. About 30 per cent of our large cap and 15 per cent of our mid cap listed issuers also scored bonus points for their disclosures.
Chief Executive Officer of Bursa Malaysia, Datuk Seri Tajuddin Atan said, “The improvement in scores shown by all our companies is indeed commendable. As the Exchange’s regulatory framework is benchmarked against the Organisation for Economic Co-operation Development (“OECD”) Principles of Corporate Governance, the high scores achieved by our listed issuers is a testament to the high standard of corporate governance in our marketplace, as well as the emphasis placed by our listed issuers in continuously stepping up their efforts and ensuring meaningful CG practices and disclosures”.
“As an exchange, we are committed to further enhancing the CG standards of our market. We are delighted to say that our supervisory approach with equal emphasis on corporate governance advocacy programmes and engagements with our listed issuers, have been successful and we will continue to do the same moving forward. It is especially heartening to note that our small-cap companies have improved their CG disclosures significantly which clearly shows that that the size of listed issuers’ market capitalisation is not a barrier to good quality CG practices,” Datuk Seri Tajuddin Atan added.
The report highlighted that there continues to be a high level of compliance to the Listing Requirements and strong adherence to the MCCG. The report also showed that listed issuers have uploaded comprehensive board charters on their website where they included details on the formal schedule of matters reserved for the board and the board’s oversight of management. There was an increase in the number of listed issuers who separated the position of Chairman and CEO in line with best practice. Furthermore, 94 per cent of listed issuers also disclosed that they assessed their independent directors annually as compared to 78 per cent in 2014, and 96 per cent of listed issuers who retained their independent directors beyond 9 years, provided justification in their notice of AGM. The Report also highlighted that 76 per cent of listed issuers provided relevant information on how they assessed the suitability and independence of their external auditors. In 2014, the number of listed issuers disclosing this information was 63 per cent. The most significant improvement was in the area of upholding the integrity of financial reporting which relates to disclosures about the audit committee and internal audit’s activities. Disclosures improved by approximately 10 per cent from 58 per cent in 2014 to 68 per cent in 2016.
While disclosures have improved since 2014, the findings showed that there is still room for improvement, especially disclosures on the activities of the board, board committee and individual directors. Only 56 per cent disclosed the criteria for evaluation of individual directors, 40 per cent disclosed criteria for evaluation of board committee and 65 per cent disclosed criteria for evaluation of the board. Most listed issuers also continued to issue generic disclosures in their Statement of Risk Management and Internal Control.
In addition to this report, each of the listed issuers reviewed will receive their individual disclosure scores and a detailed report which will indicate areas where they have made adequate disclosures as well as areas for improvement. The consolidated reports are useful to both listed issuers and investors as these provide a comparative analysis of corporate governance practices across a wide segment of companies.
Bursa Malaysia will continue with its efforts to build a market of quality through various engagements with its listed issuers including advocacy programmes and other initiatives.
The 2016 Report on Analysis of Corporate Governance Disclosures in Annual Reports is available by clicking here.
Click here for the list of public listed companies annual reports' review.