MALAYSIA Law and Practice Contributed by: Dato’ Tan Yee Boon, Stephanie Chan Pik Jia and Joaana Keng Li Xin, David Lai & Tan
es non-compliance with these requirements, it must be filled within three months to ensure compliance. Gender Diversity of Directors Pursuant to paragraph 15.02 of the Listing Requirements, it is a mandatory requirement for public listed companies to ensure gender diversity in the Board by appointing at least one female director. In alignment with this, paragraph G5.9 of the MCCG recommends that every Board should comprise at least 30% women directors. Where the representation of women on the Board is below 30%, the Board is expect - ed to disclose the actions it has taken or intends to take, along with a specific timeframe, typically within three years, to achieve the recommended threshold. Boards are also encouraged to review the participation of women in senior manage - ment positions to ensure a robust and sustain - able talent pipeline for future leadership roles. Tenure of Directors Pursuant to Section 205 of CA 2016, in the absence of any specific provision in a company’s constitution (formerly known as memorandum and articles of association) (the “Constitution” ), all directors of a public listed company shall retire at the conclusion of its first annual gen - eral meeting (AGM). At each subsequent AGM, one-third of the directors shall retire, including those who have been in office the longest since their last appointment or reappointment. Not - withstanding the foregoing, retiring directors are eligible for re-election. In terms of the tenure of independent directors, Principle A, Part II of the MCCG recommends that such tenure should not exceed a cumulative term limit of nine years. Upon reaching this limit, an independent director may continue to serve only in the capacity of a non-independent direc -
tor on the Board. If the Board intends to retain the individual as an independent director beyond the nine-year limit, it must provide a clear justi - fication and seek annual shareholders’ approval through a two-tier voting process. Diverse Skills and Training of Directors In accordance with the MCCG, the appointment of the Board should be based on objective crite - ria and merit, considering diversity in skills, expe - rience, age, cultural background and gender. Boards are encouraged to ensure a composition with a broad range of competencies, including financial expertise, industry knowledge, legal proficiency, technological capabilities and stra - tegic planning experience. To maintain effective governance, companies should regularly assess the collective qualifications and competencies of their Board members to ensure the Board is adequately equipped to discharge its responsi - bilities effectively. Pursuant to paragraph 15.08 of the Listing Requirements, all directors of public listed com - panies are required to attend mandatory training programmes, as prescribed by Bursa Malaysia, to enhance their knowledge, professionalism and governance capabilities, thereby enabling them to effectively contribute to the oversight and strategic direction of the company. Effective from 1 August 2023, all first-time direc - tors of a new listed or transferred company must complete the Mandatory Accreditation Pro - gramme (MAP) Part II: Leading for Impact (LIP) within 18 months or appointment or admission to the company. Existing directors of listed com - panies have been required to complete the LIP within 24 months since 1 August 2023.
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