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Good Corporate

Governance
OUTLINE
 What is meant by corporate governance?
 What regulation says about it?
 How to achieve good corporate
governance?
 Based on the real case
 What happen if we not comply the
corporate governance?
 Conclusion
What?
Unlimited Definitions
“… process and structure used to direct and
manage the business and affairs of the
company towards enhancing business
prosperity an corporate accountability with
the ultimate objective of realizing long term
shareholder’ value, whilst taking into
account the interest of stakeholders”

Extract from the Report on Corporate


Governanace ,February 1999.
“ Corporate Governance deals with
the ways in which suppliers of
finance to corporations assure
themselves of getting return on their
investment.”

TheJournal of finance ,Shleifer and


Vishny
“ Corporate governance is about
promoting corporate fairness,
transparency and
accountability”

J.Wolfenson, President of World Bank


All parties perform their job
accordingly especially the
management, they must apply
stewardship principles to safeguard
the shareholder’s interest.

Directors
Audit Committee
Senior management
What
regulation
says?
Overview of the Malaysian Code for Corporate
Governance
BOD, BOD bal, supp.info,
A.Directors appmt, reelection.
PART 1
PRINCIPLES B.Dir.remuntn Lvl rem.,procdr,disc

C.S/holder Dialog.bet com n inv,AGM

D.Acc/aud
Fin.reptg, int.contrl,
r/shp w audtrs
CODE
PART 2 AA.Directors 6 prin.responsibility
BEST
PRACTICES BB.Acc/aud Aud commtee n intrl aud
CC.S/holder
r/shp bet s/hdr n BOD
PART 3
OTHER PARTICIPANT

PART 4
EXPLANATORY NOTES

As presented by Haron, Abd Razak 2003.


WELL BALANCE AND
EXPERIENCE BOARD
EFFECTIVE COMMUNICATON ACCOUNTABILITY
WITH SHAREHOLDER & AUDIT

GOOD INVESTOR GOOD CORPORATE SELF MONITORING


RELATION GOVERNANCE
The criteria

TRASPARENCY IN LOYALTY, GOOD FAITH,


DECISION MAKING CARE & DILLIGENCE

AVAILABILITY OF
TIMELY
& ACCURATE www.orac.com.my
REPORTING
How to
achieved good
Corporate
Governance?
Effective audit
•Company operation
committee
•Technology Procedures to deal
•Safety on people with disaster
•Financial statement •Accounting challenges
•Risk management •Compliance requirements
•Internal control •Impact to audit requirements
•Compliance audit •Impact to reporting requirement section404
•Oversight the management
•Relationship with external
auditor
•Resources and special
investigation
•Committee composition
•Training
•Meetings
•Charter evaluation
Balance director

•In term of their remuneration


•Roles within the company-
•Fiduciary and advisory roles.
•Act for the best interest of the
company Follow the rules
•Observance with law, rules and
regulation and code of conduct

•Companies Act
Section
132A,132B,132C,132D,132E,132G,
133,133A-Focus on Directors
•Securities Commission
•Listing requirement
•etc
REAL CASE
IN
MALAYSIA
Public Bank Berhad

Malaysian Business
Corporate Governance
Award Survey Report
since 2002-2004
Overview of the Malaysian Code for Corporate
Governance
BOD, BOD bal, supp.info,
A.Directors appmt, reelection.
PART 1
PRINCIPLES B.Dir.remuntn Lvl rem.,procdr,disc

C.S/holder Dia.bet com n inv,AGM

D.Acc/aud
Fin.reptg, int.contrl,
r/shp w audtrs
CODE
PART 2 AA.Directors 6 prin.responsibility
BEST
PRACTICES BB.Acc/aud Aud commtee n intrl aud
CC.S/holder
r/shp bet s/hdr n BOD
PART 3
OTHER PARTICIPANT

PART 4
EXPLANATORY NOTES

As presented by Haron, Abd Razak 2003.


What happen if
we dIDn’t
comply with
the corporate
governance?
MAXWELL
PERWAJA ENRON

WORLD
DAIWA
BANKCOLLAPSE COM

BCCI BARINGS
BANK EMPIRE
CONCLUSION
 The system of companies is direct and control.
 All people have their own roles within the company
Directors-Responsible the governance
Shareholder-Appoint appoint director and auditor and
satisfy the appropriate governance.
Auditors-Provide the external check of Financial
statement.
Audit committee -Provide independent evaluation on
Finacial reporting and business ethic.
Cont’d
 The critical part are decision making and
the compliance together with the
reliability of Financial statement.
 Whatever rules provided by Company
and must bring to practical, if not, it isl
just a waste.
The end

Thank you