SC targets stronger board oversight through higher standards for company secretaries

The Securities Commission Malaysia (SC) is aiming to enhance corporate governance at public-listed companies over the next two years through the implementation of a new initiative. Chairman Datuk Mohammad Faiz Azmi revealed a proposed competency framework and heightened accountability measures specifically for company secretaries, whose advisory role on boards has grown in importance due to increasing business complexity and stakeholder scrutiny.

Faiz emphasized that stronger boards require professional governance experts, noting the regulator's commitment to raising standards in the company secretarial profession. The SC is seeking public feedback on the competency framework, aiming to strike a balance between strengthening governance expectations and avoiding regulatory overlap.

A task force comprising regulators and professional bodies has been formed to develop detailed proposals over the next two years, with the first meeting held recently to assess the current state of the profession.

In addition to the competency framework, the SC and Bursa Malaysia are considering integrating minimum standards and accountability requirements for company secretaries serving PLCs into Bursa's Listing Requirements. The initiative also involves strengthening coordination among regulators, including the Companies Commission of Malaysia (SSM), Bursa Malaysia, and Bank Negara Malaysia, with the aim of fostering a unified approach to governance without creating duplicative rules.

The SC is working closely with SSM on disciplinary matters, while also facilitating the establishment of professional associations like the Association of Chief Financial Officers and the Association of Sustainability Professionals. Faiz highlighted the importance of enhancing governance professionals' capabilities to help boards address emerging risks, such as those related to artificial intelligence, geopolitical uncertainty, and evolving sustainability expectations.

This multi-faceted approach seeks to bolster corporate resilience and investor confidence in Malaysia's capital market. The SC's efforts are part of a broader program aimed at improving corporate governance, including the National Sustainability Reporting Framework Kembara Borneo. Further stakeholder engagements are planned in Sabah and other states.