Malaysia Toughens Stance on Board Diversity

Bursa Malaysia has warned that it will take regulatory action against companies that fail to comply with its gender diversity requirement. Initially announced in January 2022, the regulation requires publicly listed companies (PLCs) with a market cap of MYR 2 billion (US$437 million) to appoint of at least one female board member by 1 September 2022. Other PLCs had to comply with this requirement by 1 June 2023. The Bursa Malaysia has named and censured 24 PLCs that have continued to maintain all-male boards. According to Bursa Malaysia, the majority of PLCs have already complied with the requirement, which marks “a significant step in the right direction for corporate Malaysia”. Starting from the financial year ending on 31 December 2023, main market PLCs are required to effectively manage diversity within their organisations, including the implementation of relevant policies, processes, and initiatives to foster diversity. All PLCs will also be mandated to report on the percentage of directors categorised by gender and age group, as well as the percentage of employees categorised by gender and age group for each employee category. Under the revised Malaysian Code of Corporate Governance 2021, and its related guidance, the Securities Commission recommends that all boards should consist of at least 30% women directors. Currently, the average percentage of women directors across the entire population of PLCs listed on Bursa Malaysia stands at approximately 22% as of 1 May 2023.  

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