Malaysian Code on Corporate Governance 2012

MALAYSIAN CODE ON CORPORATE GOVERNANCE 2012

ii Malaysian Code on Corporate Governance 2012

Contents

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CONTENTS

Foreword Corporate GovernanCe in Malaysia Corporate GovernanCe prinCiples and reCoMMendations principle 1: ESTAbLISh CLEAR ROLES AND RESPONSIbILITIES principle 2: STRENGThEN COMPOSITION principle 3: REINfORCE INDEPENDENCE principle 4: fOSTER COMMITMENT principle 5: UPhOLD INTEGRITY IN fINANCIAL REPORTING principle 6: RECOGNISE AND MANAGE RISkS

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iv Malaysian Code on Corporate Governance 2012

principle 7: ENSURE TIMELY AND hIGh qUALITY DISCLOSURE principle 8: STRENGThEN RELATIONShIP bETwEEN COMPANY AND ShAREhOLDERS table: CoMparison between the MCCG 2012 and the 2007 Code

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Foreword

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fOREwORD
By TAN SRI ZARINAH ANWAR CHAIRMAN, SeCuRITIeS CoMMISSIoN MAlAySIA

the securities Commission Malaysia (sC) had in July 2011 released the Corporate Governance Blueprint 2011 (blueprint) which sets out the desired corporate governance landscape going forward. the essence of the blueprint is to achieve excellence in corporate governance through strengthening self and market discipline and promoting good compliance and corporate governance culture. boards and shareholders must embrace the understanding that good business is not just about achieving the desired financial bottom line by being competitive, but by also being ethical and sustainable. the Malaysian Code on Corporate Governance (Code), first issued in March 2000, marked a significant milestone in corporate governance reform in Malaysia. the Code was later revised in 2007 (2007 Code) to strengthen the roles and responsibilities of the board of directors, audit committee and the internal audit function. the Malaysian Code on Corporate Governance 2012 (MCCG 2012) focuses on strengthening board structure and composition recognising the role of directors as active and responsible fiduciaries. they have a duty