Malaysia Consults on MSME Governance Code

Securities Commission (SC) Malaysia has issued a public consultation for its draft governance code for Malaysian micro, small and medium enterprises (MSMEs), in an attempt to strengthen the sector. The proposed code aligns with the principles of the Malaysian Code on Corporate Governance, which is targeted at listed companies. SC Chairman Awang Adek Hussin said good governance practices among MSMEs were an integral part of the Malaysian economy, as those firms account for 97.4% of the country’s business establishments. The code will specifically focus on governance practices – including those required to ensure clear accountability for decision-making related to companies’ management of sustainability risks and opportunities. Governance practices in the code are recommended based on MSMEs’ size and business maturity. While the adoption of the code by MSMEs will be voluntary, it complements other existing guidance in Malaysia, including the Simplified ESG Disclosure Guide and the ESG Quick Guide for MSMEs. The consultation will remain open until 30 April 2024.

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