PETALING JAYA, March 26 (Bernama) — The practice of board effectiveness evaluation in Malaysia has evolved with a growing recognition that the business case for it is clear and compelling. According to a study conducted by KPMG in Malaysia, over 80% of Large Companies in Malaysia have conducted externally facilitated board evaluations or have put in place crystallised plans to undertake one in the forthcoming years. This serves to underscore the importance those companies place in building boardroom governing processes that can help them tap into the accumulated expertise and strategic potential of their boards.
Interestingly, KPMG’s study revealed that the boards of Large Companies (those with market capitalisation of RM 2 billion or above) are composed with a majority of independent directors with a view of fostering greater check and balance in the boardroom. It was also noted that 82% of independent directors in Large Companies have not exceeded the 9 years tenure yardstick and this is aligned with the notion that long tenures of independent directors and familiarity may erode the board’s objectivity.
