Recent corporate governance issues in Malaysia point to the failure and ineffectiveness of the directors in meeting best practice standards and enhancing the governance of companies.

Chief executive officer of Minority Shareholder Watchdog Group (MSWG), Rita Benoy Bushon, said what was most discouraging was in relation to the lack of assessment of the performances of directors and chief executive officers.

"The performance evaluation is essential to gauge the skills of directors, including soft skills which are difficult to measure," Bushon said at the session on 'Board Assessment' at the Malaysian Institute of Chartered Secretaries and Administrators'conference today.

She said a recent survey showed that there were only a few companies in Malaysia which conducted board performance assessments.

"The boards of directors need to be responsible to govern, guide and monitor company performance and to deliver value," she said.

Impose tenure limit

In some instances, she said, there were also directors who were not able to devote their time and attention to the company as they also held positions in other companies as well.

"There should be a check on the profile of the board of directors. Ideally, board members should not hold membership in more than five companies," she said.

Bushon said to ensure the independence among the independent board members, it was essential that a 12-year limit be imposed on the tenure of directorship.

According to Malaysia's listing requirement, at least one third of the board members should be independent directors.

– Bernama