MALAYSIA Law and Practice Contributed by: Dato’ Tan Yee Boon, Stephanie Chan Pik Jia and Joaana Keng Li Xin, David Lai & Tan
4.2 Roles of Board Members Chairperson
primary role is to enhance the Board’s efficiency by bringing close attention to complex issues, thereby supporting effective oversight and strategic guidance. Committee members bring specialised expertise to their respective commit - tees, contributing to effective governance and ensuring that the Board functions smoothly in line with best practices. Each Board Committee subgroup is governed by written terms of refer - ence, and they meet regularly to address their specific functions. 4.3 Board Composition Requirements/ Recommendations In Malaysia, the composition requirements for the Board are primarily guided by the CA 2016, the MCCG and the Listing Requirements. These regulations aim to promote good corporate gov - ernance, transparency and accountability. The key composition requirements and recommen - dations follow. Number of Directors Pursuant to Section 196 of CA 2016, a com - pany is required to have a minimum number of directors. In the case of a private company, the minimum requirement is one director, whereas in the case of a public company, the minimum requirement is two directors. Each director must be a natural person who is at least 18 years of age and must ordinarily reside in Malaysia, with a principal place of residence in the country. Paragraph 15.02 of the Listing Requirements states that a public listed company must ensure that at least one-third of its Board, or a mini - mum of two directors, whichever is larger, be independent directors. If the number of direc - tors is not divisible by three, the nearest whole number to one-third shall be used to determine the required number of independent directors. In the event of a vacancy on the Board that caus -
The chairperson leads the Board by setting agendas, facilitating meetings and ensuring effective corporate governance. They act as a liaison between the Board and management, uphold high ethical standards and guide stra - tegic decision-making, fostering a culture of accountability and integrity. EDs EDs are members of the Board who are also part of the company’s management team. They are involved in the day-to-day running of the busi - ness and provide valuable insights based on their specific areas of expertise. Their contribu - tions are vital in shaping and implementing the company’s strategies. Non-EDs In contrast, non-EDs do not engage in the daily operations of the company but provide govern - ance and oversight from a different perspective. They participate in Board meetings and deci - sion-making processes, contributing their inde - pendent judgment to ensure that the company operates effectively and aligns with its long-term objectives. Independent directors play a critical role in safeguarding the interests of minority shareholders and maintaining the integrity of the Board. Their impartiality and objectivity bring balance to Board discussions and decision- making, particularly when handling matters such as corporate governance and risk management. Independent directors are crucial in enhancing the Board’s transparency and accountability. Board Committee The Board Committee comprises specialised subgroups within the Board – ie, the ARMC, NC and RC – established to focus on specific areas of governance and decision-making. Its
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