KUALA LUMPUR: The tenure of an independent director on the boards of Bursa Malaysia-listed firms will likely be restricted to 12 years, in line with Bursa Malaysia.
Bursa Malaysia has introduced the improved necessities within the Main and ACE Market Listing Requirements, aimed at additional strengthening board independence, high quality and variety.
In an announcement, Bursa mentioned the improved Listing Requirements now limits the tenure of an independent director to no more than a cumulative tenure of 12 years in a listed issuer and its group of firms.
“All long serving independent directors impacted by this enhancement must resign or be re-designated as non-independent directors by June 1, 2023,” it mentioned.
“Another key enhancement is the requirement for listed issuers (PLCs) with a market cap of RM2bil as at Dec 312, 2021, to appoint at least one woman director on their boards by Sept 1, 2022, as announced by the Minister of Finance in his Budget 2022 speech on 29 October 2021.
“For the remaining PLCs, the requirement must be complied with by June 1, 2023, “ Bursa said.
In addition, the exchange also introduced a new rule which requires PLCs to have in place a fit and proper policy that addresses board quality and integrity for the appointment and re-election of directors across the PLC group, which must be published on the PLCs’ websites, starting from July 1, 2022.
PLCs are also required to disclose the application of the PLCs’ fit and proper policy in the nomination and election of their directors in their annual reports, it said.
“The bedrock of a well-functioning and well-governed PLC is an effective and quality board,” chief govt officer Datuk Muhamad Umar Swift mentioned.
“These amendments will serve as an impetus for our PLCs to refresh their board composition, with greater focus on board quality, diversity and independence, that will promote board dynamism ultimately,” he mentioned.