Corporate governance may take back seat: MSWG

 

THE Minority Shareholders Watchdog Group (MSWG) is worried that corporate governance could take a back seat during the current economic slowdown as large companies seek short cuts to survive.

Chief executive officer Abdul Wahab Jaafar Sidek said this is a concern for smaller listed companies.

"During difficult times, this is sometimes the tendency... like instead of going to the board which can be time consuming, the management makes their own decisions or venturing into something without proper study or evaluation," he said.

He was speaking to reporters in Kuala Lumpur yesterday to announce the launch of its "Corporate Governance Survey 2008" on November 26.

He reiterated that some Malaysian companies are still behind international standards when it comes to best practices as the country's Code of Corporate Governance is not compulsory.

On MSWG's expectation over dividend payouts for 2008, Abdul Wahab said based on the current situation, lower payouts are anticipated compared with 2006 and 2007.

However, he does not expect corporate earnings to do so badly as Malaysia's economic fundamentals are still strong.