World Bank: Malaysia a regional leader in corporate governance
KUALA LUMPUR: Malaysia received strong ratings from the World Bank in its Corporate Governance Report on Observance of Standards and Codes 2012 (ROSC) released yesterday.
Malaysia is recognised as a regional leader in corporate governance, and has made substantial progress in improving the legal and regulatory framework in relation to corporate governance.
According to the report, Malaysia's overall scores are higher than the average scores of countries within the Asian region. The report acknowledges that Malaysia has a large capital market, strong institutions, sophisticated participants and high quality accounting practices.
"It is important to have in place a strong corporate governance eco-system in order to sustain active investor interest and growth in the capital market.
"We are highly encouraged by the strong endorsement by the World Bank on the collective efforts by the regulators and the industry in strengthening corporate governance in Malaysia," said Securities Commission chairman Datuk Ranjit Ajit Singh in a statement yesterday.
The CG ROSC, which is an independent assessment carried out by the World Bank, examines the country's corporate governance framework benchmarked against the OECD Principles for Corporate Governance.
This is the third time that Malaysia has participated in the assessment.
This follows a similar assessment on Accounting and Auditing ROSC concluded by the World Bank last year, in which it recognised, among others, the progress Malaysia has achieved in improving the quality and consistency of corporate financial reporting.
The World Bank in its "Doing Business Report" 2013 ranked Malaysia fourth for investor protection.
In the Corporate Governance Watch Report 2012, a biennial report by the Asian Corporate Governance Association in collaboration with the CLSA Asia Pacific Markets, Malaysia had moved two notches from the sixth position it held in 2010, to the fourth position.
Out of the six OECD Principles for Corporate Governance examined in the CG ROSC report, Malaysia scored highest in term of equitable treatment of stakeholders, enforcement and institutional framework, as well as disclosure and transparency.