“Balancing act for effective governance”

IN the aftermath of high-profile corporate scandals like Enron, 1Malaysia Development Bhd (1MDB) and most recently Serba Dinamik, questions surrounding the dynamics between the board, management and auditors have come under intense scrutiny.

These scandals have highlighted the critical role that boards play in the oversight and monitoring of companies, as well as the complex interplay of interests and relationships within corporate governance structures.

As we delve into these dynamics, it becomes evident that effective governance hinges on transparency, accountability and the ability of all stakeholders to navigate the delicate balance of power and responsibility.

Institutional investors in Malaysia wield considerable influence as we remain net buyers of the capital markets, often mopping up what foreign investors sell off.

In a capital market size of RM3.8 tril (where institutional investors’ assets under management are RM2.4 tril or more), and many of our members managing funds for the general rakyat’s pension, social security, etc, our chosen board representatives play a pivotal role in shaping these dynamics, bringing an additional layer of scrutiny and accountability to the governance process.

As stewards of shareholder interests, institutional investors advocate and continue to demand for transparency, disclosure and alignment of interests between management and shareholders.

In the recent Asian Corporate Governance Association (ACGA) CG Watch 2023 report, Malaysia ranked first for the Auditors and Audit Regulators category, an accolade that Malaysia has held for three consecutive years. Malaysia ranked fifth overall out of the 12 markets, with so much still to be done. – April 18, 2024


The Institutional Investors Council Malaysia (IIC) represents institutional investors, shaping corporate governance through the Malaysian Code for Institutional Investors (MCII) and following recommendations from the Corporate Governance Blueprint 2011.

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.

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