Malaysia’s listed companies continued to strengthen their governance standards in 2025, although board diversity and senior pay transparency remain among the weakest areas, the Securities Commission Malaysia (SC) said in its latest review.

The SC released the Corporate Governance Monitor 2025, which provides data-driven insights to guide targeted interventions and support policy enhancements.

The report tracks how public listed companies apply the Malaysian Code on Corporate Governance. The MCCG will be revised next year, its first update since 2021.

Thirty-three of the 48 best practices recorded adoption levels of at least 90 percent, up from 30 practices in 2024.

More companies also separated board chair and committee roles.

Seventy-three percent of PLCs no longer have their board chairmen sitting on board committees, compared with 63 percent last year, a shift that reflects stronger checks and balances and efforts to mitigate self-review risk.

Sustainability oversight improved as boards and management formalised responsibilities and aligned with national reporting requirements.

Slow Adoption in Board Diversity and High-Quality Disclosures

Progress slowed for practices that require cultural or behavioural shifts.

Women accounted for 34.1 percent of directors among the top 100 PLCs and 28.7 percent across all PLCs, yet only 45 percent of companies reached at least 30 percent women representation on their boards.

Only 5 percent of PLCs disclosed detailed senior management remuneration. Adoption of Step-Up practices also remained low.

These practices are designed to help companies move toward higher governance standards, and all listed companies are encouraged to adopt them.

Disclosure quality differed widely. Some PLCs provided clear and useful explanations of how they apply governance practices, while others relied on generic statements or weak justifications for departures.

The SC said the true measure of governance lies in how effectively practices are implemented to build long-term value and resilience.

SC Chairman Dato’ Mohammad Faiz Azmi said,

“As companies advance to new frontiers, boards are increasingly expected to embed future-oriented priorities such as digital transformation, AI governance and cybersecurity into their oversight.

Crucially, technology choices today carry strategic, ethical and accountability implications, requiring boards’ attention that extends well beyond a traditional IT lens.”

Insights from the monitor will shape the upcoming MCCG revision, which will focus on strengthening board leadership and effectiveness, technology governance, risk oversight and stakeholder engagement.

The SC will also conduct a market survey on emerging governance trends and said it will consider practical tools or further guidance to support companies in applying the revised code.

Featured image: Edited by Fintech News Malaysia, based on image by mrsiraphol via Freepik