Greater Emphasis On Board Independence And Diversity

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Bursa Malaysia Berhad (“Bursa Malaysia” or “the Exchange”) announces the enhanced requirements in the Main and ACE Market Listing Requirements (“the Listing Requirements”), aimed at further strengthening board independence, quality and diversity.

To promote board quality and strengthen board independence, the enhanced Listing Requirements now limits the tenure of an independent director to not more than a cumulative tenure of 12 years in a listed issuer and its group of corporations. All long serving independent directors impacted by this enhancement must resign or be re-designated as non-independent directors by 1 June 2023.

Another key enhancement is the requirement for listed issuers (“PLCs”) with a market cap of RM2 billion as at 31 December 2021, to appoint at least one woman director on their boards by 1 September 2022, as announced by the Minister of Finance in his Budget 2022 speech on 29 October 2021. For the remaining PLCs, the requirement must be complied with by 1 June 2023.

Additionally, the Exchange introduces a new rule which requires PLCs to have in place a fit and proper policy that addresses board quality and integrity for the appointment and re-election of directors across the PLC group, which must be published on the PLCs’ websites, starting from 1 July 2022. PLCs are also required to disclose the application of the PLCs’ fit and proper policy in the nomination and election of their directors in their annual reports. This seeks to improve the overall quality of directors and promote greater transparency on the criteria for board appointments.

“The bedrock of a well-functioning and well-governed PLC is an effective and quality board,” said Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia. “These amendments will serve as an impetus for our PLCs to refresh their board composition, with greater focus on board quality, diversity and independence, that will promote board dynamism ultimately.” The full text of the amendments to the Main Market Listing Requirements and ACE Market Listing Requirements can be read at the following web address:

Amended Main Market Listing Requirements: https://www.bursamalaysia.com/regulation/listing_requirements/main_market/amendments_to_listing_requirements

Amended ACE Market Listing Requirements: https://www.bursamalaysia.com/regulation/listing_requirements/ace_market/amendments_to_listing_requirements

The article was first published here.

Photo by Stanisław Gregor on Unsplash.