KUALA LUMPUR (July 12): Businesses are encouraged to prioritise value creation that is sustainable in the long run rather than focusing on short term earnings,  Securities Commission Malaysia (SC) chairman Tan Sri Datuk Seri Ranjit Ajit Singh said.

In line with the International Corporate Governance Network’s (ICGN) principles, he described this approach as a form of corporate thinking which considers circumstances that go beyond typical businesses’ concerns. 

“It has always been the case that businesses, large and small, bear within them the innate ability to exercise impact over a wide variety of stakeholders beyond that of shareholders. The direction of this “impact” is therefore greatly dependent upon the actions of businesses steered through the internalisation of good corporate governance,” Ranjit said in his keynote speech on the second day of ICGN Annual Conference 2017 here today.

According to Ranjit, it is high time now to stress on good corporate governance, as there is a trust and confidence crisis from the public arising from disparaging income inequality and surging costs of climate change, which gives way to economic nationalism and populist movements across various countries around the world. 

“Against this backdrop, protectionist policies, heightened macro-policy uncertainties, geo-political conflicts, coupled with other market developments impose considerable stress on the global economy, including those [in] the emerging markets,” Ranjit added. 

However, Ranjit stressed policy makers should recognise the nature and context in which businesses operate to bring about a better understanding in sensible corporate strategy — one which strikes balance in the combining of long-term and short-term approaches.

Moving forward, Ranjit noted  the SC has formulated strategic considerations in adopting a carefully-calibrated and non-reactive approach to Corporate Governance. 

For instance, the SC recognises the importance of incubating good governance practices amongst nascent small and medium enterprises (SMEs), while continuing to leverage technology to enhance internal governance compliance and practices.   

Ranjit added that Malaysia will be introducing the Institute of Corporate Directors Malaysia later this year — a key benchmark effort to strengthen board effectiveness in public listed companies.

The three-day ICGN Annual Conference 2017, which is hosted by Kumpulan Wang Persaraan (Diperbadankan) in partnership with the Minority Shareholder Watchdog Group (MSWG), gathers institutional investors from around the world to examine best practices in corporate governance obligations, policies, and processes to enhance overall financial market stability and economic growth.

The conference features speakers from renowned corporate governance champions from around the world, including Khazanah Nasional Bhd, the Employees Provident Fund, the SC, CIMB Group Holdings Bhd and institutional investors from the US, South Korea, Japan and Australia.