SCwatch


MALAYSIA’S CORPORATE GOVERNANCE STANDARDS: SHAMEFUL COMMENTARY

It is not usual when eminent foreign experts who come to speak in Malaysia to be so direct and honest in their assessment of the host country. Generally, they are very polite and avoid to say the very obvious. At best, they confine themselves to generalities when it comes to Malaysia and then leave the country with fond memories and appreciative souvenirs.

Not so for Mr Ken Rushton, a former European advisor to the Organisation for Economic Cooperation and Development task-force on corporate governance. He made his comments on the sidelines of a Corporate Governance Summit held recently. This was reported in The Star (click here) or better still, I re-produce it below:-

“The Star 30 September 2009

KUALA LUMPUR: Malaysia has good corporate governance standards on paper but weak implementation of these practices, according to Nestor Advisor Ltd senior advisor Ken Rushton.

“Malaysia scores so poorly in the corporate governance ratings,” he toldStarBiz on the sidelines of the Corporate Governance Summit 2009 yesterday.

He said issues like corruption, dishonesty and greed had to be addressed before the country reached a higher level of good corporate governance.

“The culture here does not seem entirely supportive of good governance. And you cannot write a code of culture. You need more education. Education is part of ethics,” he said, adding that change had to come from the grassroots and not necessarily from the government.

Rushton, a former European advisor to the Organisation for Economic Cooperation and Development taskforce on corporate governance, said there were concerns of board quality in Malaysian organisations.

“Good people who could be coming on the board (of directors) are worried about reputation risk. This is unfortunate as you need competent people on the board,” he said.

Rushton said the investor base in the country was too weak and unsophisticated to insist that companies they invested in practised good governance.

“It seems to me a surprisingly immature market. The perception of Malaysia as far as corporate governance is concerned is not good overseas and that does not encourage foreign direct investment because foreign investors will only come in if they have confidence,” he said.”

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