Corporate Governance Adoption Improves But Challenges Persist, SC Says
The Securities Commission Malaysia (SC) has reported steady gains in corporate governance among public listed companies (PLCs), but warned that key challenges remain, particularly in areas requiring cultural change and transparency.
The findings were published in the Corporate Governance Monitor 2025 (CG Monitor), ahead of the planned MCCG revision in 2026.
According to the report, 33 of 48 best practices now see adoption of at least 90%, up from 30 in 2024. Improvements were noted in board governance, with 73% of PLCs ensuring chairmen do not sit on board committees, and in sustainability oversight, as boards formalise monitoring and align with national reporting requirements.
Yet progress in board diversity, executive remuneration disclosure and Step-Up practices remains uneven. Women make up 34.1% of directors among the top 100 PLCs, but only 45% of all PLCs achieve the 30% threshold. Detailed disclosure of senior management pay is provided by just 5% of PLCs, while many smaller firms still perceive Step-Up practices as irrelevant.
The SC highlighted that disclosure quality varies, with some companies providing meaningful, decision-useful information, while others remain generic or lack strong justification for deviations.
SC Chairman Datuk Mohammad Faiz Azmi stressed that effective governance is more than compliance. Boards are expected to address emerging priorities including artificial intelligence governance, digital transformation and cybersecurity, ensuring ethical and accountable decision-making in the face of technological and strategic challenges.
The insights from the CG Monitor will inform revisions to the MCCG, focusing on board effectiveness, technology governance, risk management and stakeholder engagement. A market survey will also collect feedback on global trends and challenges to ensure the revised code is practical and future-ready.
The SC reiterated that while adoption rates are encouraging, the true measure of governance lies in implementation and translating principles into long-term value for companies and stakeholders.
