DESPITE the devastation of the COVID-19 pandemic that have impacted many local companies, the Minority Shareholders Watch Group’s (MSWG) corporate governance (CG) assessment of Malaysian public listed companies shows a continuous improvement in 2020 to 79.28 points from 74.84 points in 2019.
At the same time, the average score for the top 100 PLCs and bottom 100 PLCs (based on ranking) have also improved from 98.40 points in 2019 to 101.73 points in 2020 and from 58.75 points in 2019 to 63.17 points in 2020 respectively.
2020 marks the ninth year that MSWG has undertaken the CG assessment project to assess all Malaysian PLCs, excluding those listed on the LEAP Market, PN17 and GN3 companies by using the ASEAN CG Scorecard. In total, 851 PLCs were assessed in 2020.
For the 2020 assessment, it covered annual reports, CG reports and sustainability reports issued for financial year ended April 30, 2019 to March 31, 2020. Meanwhile, the cut-off date for other relevant information and developments is the date of the adjudication committee meeting.
Below are some key findings from the 2020 CG assessment:
- The number of PLCs paying dividend has declined to 445 from 460 in 2019 assessment. (2018: 499). Considering the prolonged COVID-19 pandemic, this figure is expected to drop further in 2021 as PLCs are either badly impacted by the pandemic or are more prudent in profit distribution to shareholders.
- The number of PLCs adopting integrated reporting has increased from 22 in 2019 assessment to 33 in 2020 assessment. Integrated reporting is an approach that enhances the way businesses think, plan and report to their stakeholders on how value is created within their organisation.
- In the 2020 assessment, a total of 274 PLCs conducted their annual general meeting virtually due to the COVID-19 pandemic.
- The number of PLCs that have established a tenure limit policy for their independent directors has increased to 80 in 2020 assessment from 52 in the 2019 assessment.
With regard to gender diversity, the 2020 assessment found that 220 PLCs have no female board representation; at least one woman director (370); at least 30% women on their boards (142); and on average, PLCs have 17% women directors on their board (2019: 15%).
For 2020, MSWG will be awarding 52 trophies to 38 PLCs in five categories, namely (i) excellence award for CG disclosure, (ii) excellence award for CG disclosure (market cap below RM1 bil); (iii) industry excellence award; (iv) merit award for most improved CG disclosure; and (v) merit award for newly listed company.
The winners are determined by an adjudication committee which comprises representatives from professional bodies, CG experts, academicians, investment professionals and those familiar with the Malaysian equity market. – Aug 14, 2021
