...MALAYSIAN CODE ON CORPORATE GOVERNANCE 2012 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 Principle 7: Ensure timely and high quality disclosure Principle 8: Strengthen relationship between company and shareholders Table 1: Comparison between the MCCG 2012 and the 2007 Code 1 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...
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...MALAYSIAN CODE ON CORPORATE GOVERNANCE 2012 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 Principle 7: Ensure timely and high quality disclosure Principle 8: Strengthen relationship between company and shareholders Table 1: Comparison between the MCCG 2012 and the 2007 Code 1 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...
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...Report Report Question Corporate governance, how a company is run, is becoming an important issue for companies to consider due to numerous recent high-profile corporate failures. As a result, businesses are starting to use a corporate governance statement as a way to communicate their corporate governance practices and promote their ethical credentials to interested parties, such as shareholders. This statement is often incorporated into the company’s annual report. To assist with the development of good corporate governance and clear corporate governance statements the ASX Corporate Governance Council has developed a set of principles and recommendations to guide companies. Explain what corporate governance is and its relationship to business ethics. Select the key principles in the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations that focus on ethics and explain how the principle relates to ethics. Evaluate how well your BACC001 Accounting for Business company’s corporate governance statement communicates information related to the ethics focused principles in the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations. Reading List Corporate Governance Principles and Recommendations (ASX Corporate Governance Council 2010) ‘Corporate Governance and Business Ethics: Insights from the strategic planning experience’ (Bonn & Fisher 2005) ‘Examining Corporate Governance Policies as a Routine Part...
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...Question1 What is corporate governance? Corporate governance refers to the framework of rules, set of systems, relationships, principles and processes by which a company is governed. (Corporate Governance Principles and Recommendations, 2014) Corporate governance is based on principles such as conducting the business with all integrity and fairness, being transparent with regard to all transactions, making all the necessary disclosures and decisions, complying with all the laws of the land, accountability and responsibility towards the stakeholders and commitment to conducting business in an ethical manner. Good corporate governance provide the confidence to investor, which is crucial to the ability of entities listed on the ASX to compete for capital. (Corporate Governance Principles and Recommendations, 2014) How important is it to investors in evaluating which corporations to invest in? There is a level of confidence that is associated with a company that is known to have good corporate governance, which is crucial to the ability of entities listed on the ASX to compete for capital. (Corporate Governance Principles and Recommendations, 2014) Corporate governance is known to be one of the criteria that foreign institutional investors are increasingly depending on when deciding on which companies to invest in. They provide the guidelines as to how the company can be directed or controlled such that it can fulfil its goals and objectives in a manner that adds to the value...
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...1/22/2013 Suneel Younis Mughal Ub 300 92 001 1.0 Corporate Governance Corporate Governance practice aim to ensure that the board is accountable to stakeholders, especially shareholders, and that management is accountable to the board (Lipton, Herzberg & Welsh, 2010).It is helpful to an understanding of corporate governance to appreciate that it is concerned with how corporate entities are governed as distinct from the way the businesses within those entities are managed. Governance relates to where the company is going. Management is concerned with getting the company there. This distinction is central is determining the role and function of the board and its relationship with management (Lipton et al., 2003). In the ASX Corporate Governance is described as “the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled in corporations. It encompasses the mechanisms by which companies, and those in control, are held to account. Corporate governance influence how the objectives of the company are set and achieved, how risk is monitored and assessed, and how performance is optimised (Lipton et al., 2003). There is no single model of good corporate governance. The eight core principles that the ASX Corporate Governance Council believes underlie good corporate governance. 1. Lay solid foundation for management and oversight-Fundamental to any corporate governance structure is establishing the roles of senior executives...
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...How is good corporate governance achieved? 3 2.2 Why is this concept important to Australia? 4 2.3 What are the roles, responsibilities and powers of the Board of Directors, Management and shareholders? 5 2.3.1 The roles, responsibilities and powers of the Board of Directors 5 2.3.2 The roles, responsibilities and powers of the Board of Management 7 2.3.3 The roles, responsibilities and powers of the Board of Shareholder 8 2.4 How does the Board add value to a company? 9 2.5 What are at least two of the theories that are used to “measure” corporate governance? How do they measure “good” corporate governance? e.g. Contractual theory and the communitarian theory, stakeholder theory. 10 2.6 What disclosures to shareholders are required by law and why? 11 3 Conclusions 13 4 Bibliographies 14 1 Introduction Nowadays, the company governs has become the global economic which a subject matter grows day by day. When a company maintains the competitive power, attracting investments, guaranteed that sustainable, and struggle against corruption, it must to applying good governance. In the most foundation's level, the company governs sets up “the game rule” to handle the related property rights and the domination separation. Board of directors’ benefit, the coordinated enterprise's owners, the superintendent and other benefit counterparts, were considered that is the essential effective revolution company governs the frame in a company. The good corporate management...
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...Introduction Corporate governance refers to the method by which a corporation is directed, administered or controlled. It includes the laws and customs affecting that direction, as well as the goals for which it is governed. Corporate governance mechanisms and controls are designed to reduce the inefficiencies that arise from moral hazard and adverse selection. Corporate governance is also viewed as a process of monitoring performance by applying appropriate counter-measures and dealing with concepts such as transparency, integrity and accountability. Corporate governance requires corporations to exercise immense accountability to shareholders and the public, and also monitors the management of organisations in running their businesses. Corporate governance is normally divided into two categories, that is, self and statutory. Self-regulation involves aspects of corporate governance that are difficult to legislate. The issues in this category involve the human element, ie the independence of the board of directors, the relationship with the management and appraisal of the director’s performance. Statutory regulation, on the other hand, is the framework of corporate governance that can be explained in legal terms. The legislative and regulatory rules include: 1. Duties, obligations, rights and liabilities of directors, controlling shareholders and company officers. 2. Disclosure and transparency. Today, good corporate governance is considered vital as it promotes morality...
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...Code of Corporate Governance – A Critical Comparison between Bangladesh and Malaysia James Bakul Sarkar Assistant Professor in Accounting and MBA Coordinator Faculty of Business ASA University Bangladesh E-mail: jamssarkar@yahoo.com Mob: 0171-6599599 Dewan Muhammad Nur A Yazdani Lecturer in Marketing Faculty of Business ASA University Bangladesh E-mail: dewanm@hotmail.com Mob: 0172-7681817 Md. Abdul Mannan Assistant Professor Department of Business Administration Stamford University Bangladesh Mob:0171-6418892 Code of corporate governance – A critical comparison between Bangladesh and Malaysia Abstract: Corporate governance is the way in which the corporate entities are governed. The question is: Who will determine the way- the entity itself or the regulator. Different stakeholders with quite diversified interests have stakes (interests) in the operation of business. Consequently, the business entity should not be allowed to operate in every respect in the way it likes; the regulators should come forward to impose certain restrictions and principles on the corporate affairs to upkeep the best interests of stakeholders like investors, creditors and after all the capital market. Such restrictions and principles can be termed as Code...
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...Governance Case Study Impetus for Corporate Governance – Corporate governance in Australia was introduced in 2003 when the ASX Corporate Governance Council introduced the “Principles of Good Corporate Governance and Best Practice Recommendation”. The governance regulations introduced by Australia’s ASX came as a result from investors’ concerns in the quality of corporate governance, following the collapse of some major companies, such as HIH, Harris Scarfe, Ansett, and OneTel. Since the guidelines were introduced, Australia’s ASX has issued revisions and updates that were designed to improve corporate governance in Australia and help avoid further collapses of major Australian companies. In contrast, corporate governance guidelines were introduced in South Africa in 1994, with the publication of the “King Report on Corporate Governance”. The introduction of corporate governance guidelines came as a result of democracy taking hold of South Africa and the country’s readmission into the community of nations and the world economy. The King Report was designed to help align the interests of corporations and its many stakeholders, including individuals, companies, and society. The United Kingdom introduced corporate governance guidelines in 1992, with the Cadbury Report on “The Financial Aspects of Corporate Governance”. The guidelines were introduced partly because of the financial situation in Europe, which brought to light the public’s concerns over the standards for...
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...New Zealand Principles of Corporate Governance and Responsibility. A Global Perspective. Prepared by: Mark Gray Large businesses around the world are controlled in a variegated fashion. Whilst the Anglo American system of corporate control is heavily based on a strict structure of a Board of Directors, in itself controlled by a chairman and constituting a various number of executive and non-executive directors. Whilst the primary function of the Board has fundamentally been seen as one of accountability, monitoring and goal setting, there is large chasm of difference in Board performance, and this highlighted graphically by the numerous large scale Corporate collapses in the United States. Indeed the U.S economy has been severely affected by ‘avoidable’ corporate bankruptcies. As the United States comprises a large proportion of the largest corporations in the world, it is not surprising that it has suffered a large number of corporate failures of corporate governance (Blackmore, 2006). The speedy corporate meltdown of very large U.S corporations, the like of Lehman Brothers and Enron threw the entire U.S business community into turmoil, prompting the U.S and other governments to speedily regulate as a deterrent to all business owners. This approach is ‘rules based’ and relies heavily on legislation for business compliance and good corporate governance. Although there have been corporate failures in New Zealand, most recently...
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...Profile British American Tobacco Malaysia (BATM) has grown together with the nation from 1912 to 2012, into one that is involved in the full spectrum of the tobacco industry, with an unrivalled portfolio of highly successful international brands. The Company is now the market leader of the Malaysian cigarette industry, with approximately 63 percent market share, and ranks amongst the top 25 public listed companies on Bursa Malaysia Securities Berhad in terms of market capitalization (British American Tobacco (Malaysia) Berhad, 2013). The corporate governance of the BATM is set out in the BATM’s Code of Corporate Governance which has been established and enhanced based on the principles and best practices outlined in the Malaysian Code on Corporate Governance 2012 (MCCG 2012), Bursa Malaysia Main Market Listing Requirements (BMMMLR), Standards of Business Conduct of BATM and etc. By ensuring the highest standards of corporate governance, the Board believes that it able to strengthen the Company’s sustainability, effectiveness of...
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...PFIZER INC. CORPORATE GOVERNANCE PRINCIPLES Role and Composition of the Board of Directors 1. General. The Board of Directors, which is elected by the shareholders, is the ultimate decision-making body of the Company, except with respect to those matters reserved to the shareholders. It selects the Chief Executive Officer and other members of the senior management team, which is charged with the conduct of the Company’s business. Having selected the senior management team, the Board acts as an advisor and counselor to senior management and ultimately monitors its performance. The function of the Board to monitor the performance of senior management is facilitated by the presence of non-employee Directors of stature who have substantive knowledge of the Company’s business. 2. Succession Planning. The Board also plans for succession to the position of Chief Executive Officer as well as certain other senior management positions. To assist the Board, the Chief Executive Officer annually provides the Board with an assessment of senior managers and their potential to succeed him or her. He or she also provides the Board with an assessment of persons considered potential successors to certain senior management positions. 3. Board Leadership. The independent Directors will annually elect a Chairman of the Board, who may or may not be the Chief Executive Officer of the Company, based on the recommendation of the Corporate Governance Committee as a result of its annual review of the Company’s...
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...company's corporate governance statement. This statement sets out the key corporate governance principles adopted by the Directors in governing David Jones and reflects the corporate governance policies and procedures which applied during the year ended 28 July 2012. The corporate governance statement of David Jones is very specific and coherent. It provides the information very clearly and shows the detail that how their behaviors applies the Australian Securities Exchange requirement. Based on their corporate governance statement, it is very clear that the Board has a good performance in corporate governance across the company. Firstly, the structure of board and directors is good. For example. the majority of the board are independent directors. Directors come from different backgrounds with complementary skills and experience; they also do not have conflicts of interest with the company. Secondly, David Jones has a good performance on the control of risks. David Jones’ approach to risk oversight, risk management and internal control has been developed and is consistent with recognized industry reference material and guidelines. Thirdly, the remuneration is fair and responsible. The Remuneration and Nominations Committee helps the Board to decide the suitable remuneration of Directors and executives regarding to their performance. Based on the corporate governance statement, it is also very clear that David Jones applies the ASX(Australia Securities Exchange) principle and...
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...Corporate Governance | Should accountability, transparency and effective risk management be regarded as the most important principles of Corporate Governance? | | What actually corporate governance is and how it actually affects a corporation? What are the main players playing a part in corporate governance? These are the questions one must understand in order to see the role of principles like accountability, transparency and effective risk management in corporate governance. So corporate governance is defined as “the relationship between a company’s shareholders, directors, and management as defined by the corporate charter, bylaws, formal policy, and rule of law”. (Gallegos, 2004, p. 37). This definition clearly shows the relationship of a company’s shareholder, directors and management. But this definition is only limited to what are the main players of corporate governance. In order to understand its impact on a corporation or company, ASX defines it as, “Corporate governance is the system by which companies are directed and managed. It influences how the objectives of the company are set and achieved, how risk is monitored and assessed, and how performance is optimized. Good corporate governance structures encourage companies to create value (through entrepreneurism, innovation, development and exploration) and provide accountability and control systems commensurate with the risks involved’. (ASX Principles of Good Corporate Governance and Best Practices...
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...history of Development CG The term of corporate governance not just been introduced but it also drew attention of the public about the weaknesses of Malaysian corporate governance practice due to the Asian Financial Crisis in 1997. After 1998, the government of Malaysia decided to adopt the corporate reforms to enhance the quality of good corporate governance practice in the country. The main sources of the Corporate Governance reforms agenda in Malaysia other than Malaysian Code on Corporate governance are the Capital Market Master Plan (CMP) and also Financial Sector Master Plan (FSMP). This sources provides guidelines on the principles and best practices in corporate governance and the direction for the implementation as well as charts for the future prospects of corporate governance in Malaysia. Malaysian Code on Corporate Governance is an initiative that established by the Financial Committee on Corporate in 1998. This committee is consists of both government and also industry. MCCG was introduced on March 2000. This code brought a systematical change in structure of public and also private corporation. The principles underlying the report focus on four areas which are board of directors, directors’s remuneration, shareholders and accountability and audit. Compliance with the code is not mandatory. However, the listed companies in Bursa Malaysia are required to prepare their annual report on how they have applied the principles and best practices set out in the code and...
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