Corporate Governance Culture

Corporate Governance as stated in the statement above, function as agents of shareholders, within the corporate governance ecosystem. Shareholders who exercise their rights as shareholders, directly influenced the boards, can ensure responsible actions by companies. Gatekeepers and influencers, insinuated between the shareholders and company, play an important role in promoting self and market discipline, hence in reducing the need for regulatory discipline. Last but not least, private and public enforcement have an important role in ensuring that corporate governance are held accountable through actions by the regulators parties. Proactive actions by the various parties is crucial and this reinforces the corporate governance culture and ultimately

The latest MCCG guideline places greater emphasis on the internalization of corporate governance culture. This is not limit to listed companies, but also encourages non-listed entities including state-owned enterprises, small and medium enterprises (SMEs) and licensed intermediaries to adopt and embrace the code (figure 3). By embedding corporate governance culture early will allow collaboration between relevant stakeholders to develop a corporate governance toolkit for SMEs to ease them into embracing good governance practices. This MCCG is effective immediately from 26 April 2017. In addition, strong corporate governance culture must be introduce on a dynamic synthesis of efforts between regulators and the

The findings show that Corporate Governance mechanisms exhibit implications for firm performance, fraud, capital retention, financial constraints, institutional investors, auditing and the quality of financial disclosures. There is reviews evidence documenting the importance of independent board directors in regulation and ethical conduct showed by this study. Challenges / Practical Issues

In corporate governance, there is seven areas of which is transparency, management discipline, independence, accountability, responsibility, fairness and societal awareness. Out of this seven, societal awareness category is excluded due to its relevancy in corporate governance. Transparency refers to the ability of outsiders to assess the true position of the firm. Which means the the firm provide information disclosure to the public regarding their firm. It is vital for firm with good corporate governance conduct. The below shows Malaysia’s ranking on governance index score (figure 5).

Figure 5: Descriptive statistics on governance index