Corporate governance—Malaysia—Q&A guide

The following Share Incentives practice note provides comprehensive and up to date legal information covering:

  • Corporate governance—Malaysia—Q&A guide
  • 1. What are the primary sources of law, regulation and practice relating to corporate governance? Is it mandatory for listed companies to comply with listing rules or do they apply on a ‘comply or explain’ basis?
  • 2. What are the primary government agencies or other entities responsible for making such rules and enforcing them? Are there any well-known shareholder or business groups, or proxy advisory firms, whose views are often considered?
  • 3. What powers do shareholders have to appoint or remove directors or require the board to pursue a particular course of action? What shareholder vote is required to elect or remove directors?
  • 4. What decisions must be reserved to the shareholders? What matters are required to be subject to a non-binding shareholder vote?
  • 5. To what extent are disproportionate voting rights or limits on the exercise of voting rights allowed?
  • 6. Are there any special requirements for shareholders to participate in general meetings of shareholders or to vote? Can shareholders act by written consent without a meeting? Are virtual meetings of shareholders permitted?
  • 7. Are shareholders able to require meetings of shareholders to be convened, resolutions and director nominations to be put to a shareholder vote against the wishes of the board, or the board to circulate statements by dissident shareholders?
  • 8. Do controlling shareholders owe duties to the company or to non-controlling shareholders? If so, can an enforcement action be brought against controlling shareholders for breach of these duties?
  • 9. Can shareholders ever be held responsible for the acts or omissions of the company?
  • More...

Corporate governance—Malaysia—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to corporate governance in Malaysia published as part of the Lexology Getting the Deal Through series by Law Business Research (published: June 2021).

Authors: SKRINE—To’ Puan Janet Looi; Alia Abdullah

1. What are the primary sources of law, regulation and practice relating to corporate governance? Is it mandatory for listed companies to comply with listing rules or do they apply on a ‘comply or explain’ basis?

The corporate governance framework in Malaysia comprises laws, requirements and guidelines issued by the authorities to cover all listed and unlisted companies, with a particular focus on encouraging listed companies to adopt recommended corporate governance practices by using a 'comply or explain' approach. The primary sources are as follows.

Companies Act 2016

As Malaysia is a common law jurisdiction with its origins of law based on English common law, laws relating to the good governance of companies, such as directors' duties, the rights of shareholders and accountability to shareholders and other stakeholders, can be found in case law and are also codified in the Companies Act 2016. This Act came into force on 31 January 2017 and repealed the Companies Act 1965. It regulates the management, duties and accountability of directors, the rights of shareholders and the reporting and disclosure requirements for private, public and listed companies and corporations, including foreign companies and

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