MALAYSIA Law and Practice Contributed by: Dato’ Tan Yee Boon, Stephanie Chan Pik Jia and Joaana Keng Li Xin, David Lai & Tan
ed to act with due care, skill and diligence, in line with their fiduciary duties as stipulated in Section 213 of CA 2016. Post-decision, the Board moni - tors the implementation of its directives, ensur - ing alignment with the company’s objectives and compliance requirements. The MCCG emphasises that the Board is collec - tively responsible for the company’s long-term success and the delivery of sustainable value to stakeholders. Following Principle A, Part I of the MCCG, the Board is to set the company’s strategic aims, ensure necessary resources are in place and oversee management performance. SMT Led by the CEO or MD, the SMT is responsible for implementing the Board’s strategic decisions and managing the company’s day-to-day opera - tions. This includes overseeing key areas such as finance, operations, marketing, legal affairs and human resources. SMT members exercise deci - sion-making authority within their designated functions and operate under policies and limits defined by the Board. Strategic planning is typically developed through collaboration within the SMT, ensuring alignment with the company’s objectives. For complex matters, SMT members may consult with department heads or external advisors to enhance the decision-making process. Regular communication with the Board is maintained through periodic reporting and presentations to ensure transparency and strategic alignment. Practice G4.4 of the MCCG recommends that performance evaluations of the Board and the SMT include reviews of their effective - ness in managing material sustainability risks
and opportunities. This practice emphasises the importance of integrating ESG considera - tions into the company’s strategic and opera - tional activities. This aligns with Section 211 of CA 2016, which allows the Board to delegate authority, while holding the SMT accountable for operational execution. Board Committee During committee meetings, the committee members review relevant information, which is often provided by management, internal audi - tors, external auditors or consultants. Commit - tee members deliberate on the issues at hand, request further clarification where necessary and consult experts if appropriate. Rather than making binding decisions, commit - tees typically formulate recommendations or proposals for the Board’s consideration. These recommendations are then reported to the full Board by the committee chairperson at sched - uled Board meetings. In Malaysia, the structure of a Board is designed to ensure accountability, effective oversight and sound corporate governance. A typical board structure includes: • the chairperson of the Board ( “chairperson” ) • executive directors (EDs); • non-executive directors (independent and non-independent) (non-EDs); and • the Board Committee. 4. Directors and Officers 4.1 Board Structure
539 CHAMBERS.COM
Powered by FlippingBook