LEADERSHIP

UKCGC

MCCG

Role of the board

UKCGC: Principle A.1; MCCG: Recommendation 1.2
Establish clear functions
Set the companys strategic aims
Formalise ethical standards
Review and disclose its board charter

Duality role the chairman and the chief executive

UKCGC: Principle A.2
MCCG: Recommendation 3.4
Principle A.4
Appointment of Senior Independent
Director to be the intermediary between
directors and intermediary between the
board and the shareholders

Recommendation 2.1
Senior Independent Director is identified
by the board to Chair the Nominating
Committee

EFFECTIVENESS
UKCGC

MCCG
Composition

Principle B.1
50% independent directors
(excluding chairman)
2 independent for smaller
companies

Recommendation 3.5
Majority of independent directors

Appointments
Nomination Committee majority INED
Principle B.2
Appointment of Independent
Directors
Disclosure of Nomination
Committee Report

Recommendation 2.1 & 2.2

Chaired by Senior Independent
Director
Boardroom diversity policy

Commitment
Principle B.3
Should not agree to exec director to
be more than one as a non-exec
directorship

Recommendation 4.1
Notify chairman before accepting
new directorship

UKCGC

MCCG
Development
UKCGC: Principle B.4
MCCG: Recommendation 4.2
Induction and training

Information Support
UKCGC: Principle B.5
MCCG: Recommendation 1.5 & 1.6
Independent professional advice
Advice and service of company secretary

Evaluation
Principle B.6
Disclosure of performance evaluation
board, committees, individual
FTSE 350 by external facilitator
every 3 years

Recommendation 3.1
Assessment of independent directors
annually

Re-election of the board

Principle B.7
FTSE 350 Annual election
FTSE 100 Election for the first
appointment & intervals of every 3
years
Non-exec directors who have served
more than 9 years

Recommendation 3.2 & 3.3

Election of independent directors
who have served more than 9 years

accountability
UKCGC

MCCG

Accountability of the Board

UKCGC: Principle C.1 - present fair, balanced and understandable assessment
MCCG: Principle 5
- uphold integrity in financial reporting.

Recognise and manage risk

Principle C.2
at least annually, conduct a review of the
effectiveness of the companys risk
management

Principle 6 (Recommendation 6.1)

- determine the companys level of risk
tolerance & actively identify key business
risk

Audit Committee
Principle C.3 of the UKCGC
establish an audit committee
of at least three
Small company- two independent
non-executive directors.
at least one member has recent
& relevant financial experience.

Principle 6 (Recommendation 6.2)

- establish internal audit function
- appoint a head of internal audit report
Direct to audit committee

Remuneration
UKCGC

MCCG
Remuneration policy

Principle D.1
Principle 2 (Recommendation 2.3)
performance-related remuneration
Establish formal & transparent
for executive directors (Schedule
remuneration policies
A of Code)
package should aligned with the
business strategy and long-term
objectives of the company

Appointments
Remuneration Committee

Atlas 3 independent non-executive directors

Small companies 2 independent non-executive directors

Company chairman may be a member
Committee, he or she is in considered independent on appointment as
chairman

shareholders
UKCGC

MCCG
Communications

UKCGC principle E.1 - dialogue with shareholders based on the mutual

understanding of objectives
- Should keep in touch with shareholders
Principle E.2 & MCCG Principle 8
AGM to communicate with investors and
to encourage their participation.
MCCG vote by poll

CONCLUSION

MCCG mirrored UKCGC especially Hampels, a topdown regulatory approach as evident in Malaysia

Highly dependent on the endowment of the appropriate

powers and effective enforcement.

The differences are in terms of compliances whereby in

Malaysia the empowerment of the CODE is much lesser
than the UK.