In the current commercial world of Environmental, Social and Governance (“ESG”) compliance and Sustainable Development Goals (“SDG”), more duties and responsibilities are placed on the shoulders of directors of corporations and companies to ensure that their business is in compliance with ESG and/or SDG practices. As written in our previous article penned by Darren Lai and Fatin Ismail, we discussed briefly about director’s duties in a public listed company.
Mandatory Accreditation Programme Part 1
Recently, the Securities Commission (“SC”) released the new and improved Mandatory Accreditation Programme (“MAP”) Part 1, which is part of a five fold strategy, the Corporate Governance Strategic Priorities 2021 – 2023. MAP Part I targeted new directors of businesses listed on Bursa Malaysia (“BM”) as well as directors of companies looking to list on the Exchange, serving as a benchmark of enhancing the role of directors of public listed companies.
The MAP Part 1 was extensive, as it covered the fundamental principles of good corporate governance and sustainability. It aimed to equip current directors and future leaders in the corporate world with the necessary and critical fiduciary knowledge required. The intention of the SC in enhancing the MAP is loud and clear; as it strives to achieve SDG in the Malaysian corporate world as the programme even caters to directors of non-listed subsidiaries of public listed companies. Dealing with crucial and nuanced areas such as stakeholder capitalism, reputation and crisis management, allows directors of companies to not only better themselves, and their respective corporations but rather the industry they play a part in.
Mandatory Accreditation Programme Part 2
More recently, the SC further upgraded the MAP by launching the Mandatory Accreditation Programme Part II: Leading in Impact (“MAP Part II”) in line with its aforementioned strategic priorities. MAP Part 2 can be dubbed as a deep dive into sustainability in corporate governance. This is partly because MAP Part II aims to shed more focus on the responsibilities, tasks, and liabilities of directors as well as other duties under the ACE Market Listing Requirements, something which was lacking in the previous iteration of the MAP.
MAP Part II also comes bearing with it time constraints. For example, the programme must be completed by first-time directors within 18 months after their respective dates of appointment and admission. This is a plain and clear signal by the SC that no longer is the job scope of a director merely limited to corporate decision making. Rather, it now encompasses the duty to make decisions for the wellbeing of a companies’ surroundings, employees and posterity as well. As the official media release points out, the MAP Part II aims to target the increasing awareness of stakeholders on ESG issues.
The enhancement of the MAP marks the shift in paradigm with respect to traditional director’s duties. This no doubt places more burden on directors of Public Listed companies. Nevertheless, it can only be progressive that apart from running a business for profit, directors are now educated to remember their role in maintaining a sustainable development and this in turn, can only have a good effect to the environment, as the reality is that every business decision be it usage of natural resources, handling of material waste, and/or treatment of workers and employees inter alia works hand in hand. This initiative is certainly welcome in the bigger picture to create a sustainable development for our future generation.
Published on 26 July 2023