Consider making best practices in CG Code as rules
FocusM | 29 Mar 2019 00:30
THE Minority Shareholders Watch Group (MSWG) recently argued why two-tier voting for independent directors in listed companies should be made a rule under the listing requirements.
Two-tier voting has been a practice under the Malaysian Code on Corporate Governance (MCCG) since 2017. But many companies do not adopt it, especially when voting for independent directors beyond a 12-year tenure.
There are many excuses for not complying, according to the MSWG. One excuse is that they need to change their constitution. This begs the question – why don’t they just change it?
Another excuse is that it is against the Companies Act (CA) 2016. This is despite the Securities Commission explaining that twotier voting does not offend the CA.
Under two-tier voting, Tier 1 is by large shareholders and Tier 2 by minority shareholders. Both tiers must vote in favour of the independent directors for the vote to carry.
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