Bursa Malaysia Berhad announces the enhanced requirements in the Main and ACE Market Listing Requirements, aimed at further strengthening board independence, quality, and diversity.
To promote board quality and strengthen board independence, the enhanced new requirements now limit 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 June 2023. Another key enhancement is the requirement for PLCs with a market cap of RM2 billion, to appoint at least one woman director on their boards by September 2022, this was announced by the Minister of Finance in his Budget 2022. For the remaining PLCs, the requirement must be complied with by June 2023.
Additionally, the Exchange introduced 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 reelection of directors across the PLC group, which must be published on its websites, starting from 1 July 2022. PLCs are also required to disclose the application of its 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 a 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 on Bursa website.