DBR and Investor Protection
The Malaysian Code on Corporate Governance was released in March 2000 and outlined principles and best practices on corporate governance. Among the recommendations in the code was one requiring companies listed on the KLSE to provide sufficient disclosure so that investors and others could assess the companies’ performance and governance practices and respond in an informed way. It was also recommended that listed companies be required to explain any circumstances justifying their departure from the best practices on corporate governance as outlined in the code.
Accordingly, in February 2001, amendments to the KLSE Listing Requirements included new rules aimed at raising the standards of conduct of directors, and company officers of public-listed companies as well as developing effective internal governance mechanisms. In particular, effective June 2001, paragraph 15.26 of the KLSE Listing Requirements requires all public-listed companies to include as part of their annual report statements, a statement relating how they have applied the principles as set out in Part 1 of the Malaysian Code on Corporate Governance and the extent of their compliance (and reasons for areas of non-compliance) with the “Best Practices in Corporate Governance” as set out in Part 2 of the Malaysian Code on Corporate Governance.
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