Of late we are witnessing new initiatives being introduced to enhance corporate governance in Malaysia. Increasingly, various stakeholders are contributing their bit to shape the competitiveness of our capital market.

The primary initiative perhaps was the announcement made during the launch of the new fund-raising framework and board structure where the regulatory framework has been further refined.

Under the new market-based regulatory approach, the Securities Commission would focus on ensuring compliance with minimum requirements, standards of corporate governance, resolutions of conflict of interest, preservation of public interest and adequate disclosure.

With such approach taken, it would be critical for market participants such as promoters, directors and their professional advisers to ensure market discipline is maintained and appropriate governance standards are adhered to.

The recently launched Malaysian Alliance of Corporate Directors (MACD) has, among others, the purpose of promoting sound corporate governance and influence the conduct of business and public affairs for common good.

It is hoped that MACD and other similar organisations would further enhance the professionalism of directors, who would be the ones setting the standards of governance and steering the future of the companies under their care.

The Audit and Assurance Standards Board and the Ethics Standards Boards of the Malaysian Institute of Accountants (MIA) will also be launched this week.
 
The two boards would not only ensure the standards adopted by the accounting profession in Malaysia continue to be at par with international standards but would also participate actively at the international level when the standards are discussed and crafted.

Public representation in the two boards would ensure public interest is taken into account in all decisions made. At the same time, the boards would complement the work of the announced Audit Oversight Board (AOB) when the AOB comes into operation.

Bursa Malaysia is organising its Corporate Governance Week which is intended to provide a platform for all stakeholders to exchange information, experience and knowledge about best practices in corporate governance.

Among the highlights of the week are the launch of corporate governance guide which would provide further insights into good corporate governance practices, particularly to directors.

The challenge for all the market players would be to ensure corporate governance is actualised.

While the Code on Corporate Governance and guidance which were issued provide the framework and advocate best practices, the actual test would be how far these code and best practices are applied.

Governance should not be viewed as a process to ensure all the boxes are ticked. It should come from sincere intention of performing and behaving in the best interest of all the shareholders while considering the interests of other stakeholders as well.

Without doubt, leadership in corporations would be the one that sets the tone of governance.

At the same time, governance is not distinct and sort of “add on” to business but it is part and parcel of business. The formalisation of the code on corporate governance makes it seems complicated. Some argue that this is another cost of business.

However, if one is sincere in appreciating the intentions behind the principles and best practices, one would see that the ultimate outcome is a robust and sustainable business which runs in tandem with the needs of the society it serves.

The inside-out approach where good governance is considered a pathway towards sustainable business is preferred over the “standards and procedures” approach where the objective is shifted towards behaving in compliance with minimum requirements as prescribed by regulators.

Ultimately corporate governance is actualised by people, who play different roles in the management and operations of corporations. Therefore, the battle is about winning the hearts and minds of these key individuals who have the ability to make a difference in governance.

While we sometimes prefer a quick fix to issues, when it comes to governance, one has to consider its supply chain and any long lasting outcome would require the strengthening of the whole chain.

One important part is the education and inculcation of good values, the main engine of good governance. If this is considered, it makes governance the issue for everybody — parents, teachers, regulators and the society at large. One cannot expect to benefit from good governance if he or she refuses to play a role.

Hopefully, the activities in promoting and enhancing good governance whether at the corporate, enterprise or human level would be part of what we do as a civilised society. It is something that requires continuing effort, and each and every one of us should make it an agenda of our life.

Nik Hasyudeen is the president of the Malaysian Institute of Accountants. He can be contacted at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .