Incentivise good corp governance

KUALA LUMPUR: Malaysia Institute of Chartered Secretaries and Administrators (Maicsa) is proposing that tax breaks be accorded to companies for expenses incurred for good corporate governance compliance.

Maicsa president Chua Siew Chuan told Business Times that the government can incentivise good governance among corporate Malaysia by according tax breaks in the form of tax deductible expenses under the 2015 Budget.”

“Expenses incurred in ensuring transparent and ethical ways of doing business will result in sustained participation from investors and stakeholders,” she said on the sidelines of the Maicsa 2014 conference last week.

Corporate governance is about how company directors make decisions and put them into action. Measures to enhance ethical business practices include the setting up of a whistle blowing department within the company, strengthening of internal audit and appointment of chief governance officer.

Since 2012, the Malaysian Code on Corporate Governance had placed greater emphasis of good governance on public-listed companies.

Good corporate governance is integral in balancing the interests of the many stakeholders in a company, namely shareholders, management, customers, suppliers, financiers, government and the community.

“We’re no longer confined to the traditional passive job of preparing the minutes of meetings. We’re a lot more proactive since Bank Negara began to recognise company secretaries as gatekeepers of good governance,” Chua said.

“Nowadays, company secretaries are expected to guide their board of directors in ‘walking the talk’ on integrity and transparency in their daily business decision-makings,” she said, adding that corporate directors have increasingly turned to company secretaries for advice on procedural and regulatory requirements. Company secretaries also help the chairman in determining the annual board plan.

In view of the expanded role being undertaken by company secretaries, she said it is timely for the government to consider introducing a dedicated set of laws for this profession.

“Many countries already have a Company Secretaries Act, including India, Bangladesh and Pakistan. It would be timely for Malaysia to have a dedicated set of laws to give due recognition and properly regulate this profession,” said Chua.

Established in 1959, Maicsa is part of The Institute of Chartered Secretaries and Administrators (ICSA) headquartered in the United Kingdom, which has 36,000 members in more than 70 countries.