KUALA LUMPUR (November 24): Chairmen of listed companies have placed three top priorities for boards in 2022, namely to ensure business continuity and resilience, managing Covid-19 related risks as well as people management and well-being.
The Securities Commission (SC) in its Corporate Governance Monitor 2021 report said the respond of a survey gathered from 325 chairmen also would like to see a refresh or change of current board composition as a requirement to strengthen board skills related to innovation and technology, as well as sustainability.
It said the majority of the chairmen highlighted that the boards, which they lead set a strong and positive tone from the top in relation to good corporate governance.
“Fifty-eight per cent of respondents rated themselves as ‘good’ when asked to self-evaluate their effectiveness as a chairman, 23 respondents rated themselves as ‘exceptional’, 23 as ‘average’, and nine as ‘below average’.
“Most chairmen highlighted that they would like to be more efficient and effective in leading board meetings and ensuring the meetings are productive,” it said in the report that was released today under the Thematic Review 1 – Board Priorities 2022 and Board Dynamics.
In August 2021, the SC collaborated with the Institute of Corporate Directors Malaysia (ICDM) and conducted the inaugural Chairman Survey to gain insights on board priorities in 2022 and the state of board dynamics from the perspective of the chairman.
Meanwhile under the Thematic Review 2 – Observation on Sustainability Disclosures of Listed Companies of the report, the SC reviewed the sustainability reports of 30 large listed companies and 10 mid and small-cap companies that collectively represented 59.5 per cent of the total market capitalisation on Bursa Malaysia as of Jan 4, 2021.
Among the findings from the review are out of the 40 companies, 12 issued standalone sustainability reports, while the remaining companies incorporated information on sustainability in the annual report itself.
More than half of the companies (23 listed companies) disclosed that the companies’ sustainability report was prepared based on the Global Reporting Initiative Framework.
Some listed companies were also guided by the International Integrated Reporting Framework.
A common observation for the reports was the opportunity to improve readers’ experience, including ease of navigating through the disclosure.
“Occupational safety and health is the most common matter identified as material by companies, which is expected given the challenges arising from the COVID-19 pandemic,” the SC said.
Apart from that, the report also reviewed the Demographics of Audit Committees of Listed Companies, stated under Thematic Review 3, which presents observations on the demographics of Audit Committees of listed companies on Bursa Malaysia, in terms of board composition, diversity, tenure, as well as technical and capabilities of audit committee members.
“Among the information highlighted in the review are typically at least half of the directors on the board of a listed company are also members of the audit committee. The average size of an audit committee is four directors.
“The longest tenure of an independent director is currently 34 years. On average, a relatively shorter committee tenure is recorded for a member of the audit committee, at three years, with the majority of audit committee members serving less than nine years,” it said.
Currently, the longest-serving audit committee chair has been in the position for 21 years.
Only 15.9 per cent of audit committee members are women, it added. — Bernama