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In CG Monitor 2019, the SC highlighted gaps in the disclosures on outcomes of board evaluations (Practice 5.1*), in particular lack of discussion on key strengths and/or weaknesses that were identified from the evaluation and measures that have or will be taken by the board to address them. There were some improvements in the disclosure in 2019 but there is still room to further enhance the quality of discussions. The following feature article by the Institute of Corporate Directors Malaysia highlights best practices when communicating board evaluation outcomes.

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* As per MCCG 2017, Practice 5.1 – The board should undertake a formal and objective annual evaluation to determine the effectiveness of the board, its committee and individual director. The board should disclose how the assessment was carried out and its outcome. For Large Companies, the board engages independent experts periodically to facilitate objective and candid board evaluations.
** Update – MCCG 2021, Practice 6.1 The board should undertake a formal and objective annual evaluation to determine the effectiveness of the board, its committees and each individual director. The board should disclose how the assessment was carried out its outcome, actions taken and how it has or will influence board composition. For Large Companies, the board engages independent experts at least every three years, to facilitate objective and candid board evaluations

This article was first featured in the CG Monitor 2020 on page 21.

Photo by Benjamin Child on Unsplash.

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Best Practices: Communicating Board Evaluation Outcomes

19 October 2020

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