“The culture here does not seem entirely supportive of good governance. And you cannot write a code of culture. You need more education. Education is part of ethics,” he said, adding that change had to come from the grassroots and not necessarily from the government.
“Good people who could be coming on the board (of directors) are worried about reputation risk. This is unfortunate as you need competent people on the board,” he said.
“It seems to me a surprisingly immature market. The perception of Malaysia as far as corporate governance is concerned is not good overseas and that does not encourage foreign direct investment because foreign investors will only come in if they have confidence,” he said.
In spite of listed companies having committees to evaluate candidates for board positions, the truth of the matter is that board of directors appointments are, in the main, based on perceived loyalties and, in many cases, sycophantic attributes. Kaki ampu are usually favoured over more independent-minded persons.
It is equally true that intelligent directors tend to be reticent in board meetings so as not to say the hard truths that will make the dominant director-shareholder lose face and cause personal offence.
It is imperative that a pool of non-executive directorial candidates be created by corporate governance entities such as the Minority Shareholders Watchdog Group to be available as directorial candidates based on the "cab rank" principle i.e. "first-come-first-served" basis to ensure that there is true and genuine independence on the part of those directors that are designated as "independent directors". Barring this development the true state of Malaysian corporate governance will remain as moribund as ever in spite of the best written corporate governance codes.