Stemming from my earlier write up on corporate governance, this article is the second part of the series which looks at the factors and qualities that create good corporate governance and its best practices. For this article, we shall address the area of Board of Directors, since they are the driving force of every organization. Therefore, a strong governance framework needs to be established, and should serve the following objectives:-
Corporate governance is defined as a set of policies and procedures affecting the way a corporation is administered. These policies and procedures are mechanisms required to ensure accountability of certain individuals who have great impact on the organization’s direction and goals.
Every limited company must have a minimum of one Company Secretary, according to Section 139 of the Companies Act, 1965. The appointment of Company Secretary is decided by the directors of the company.
Since a company is a legal entity by itself, its shareholders are required to appoint directors, officers who are entrusted with the power and authority to make decisions for the running of the company and manage the company’s affairs.
When a listed company has cash and short term investments, making up at least 70% of its consolidated assets (this condition is referred to as “Cash Criterion”), it has to notify Bursa Malaysia immediately. Bursa will determine if this company is considered a “Cash Company”.
While there are more than a thousand companies listed in Bursa Malaysia, not all of them are in a financially sound position. Although at the point of listing, these listed companies must meet the Listing Requirements of Bursa Malaysia, given time, the company’s financial position and business direction can change for the better or for the worse.
To strengthen the position of Bursa Securities as a conducive capital raising destination, the enhanced framework of the MESDAQ Market will be known as ACE Market effective 3 August 2009.
This enhancement entails the merging of the current Main Board and Second Board into a single board of established corporations. Effective 3 August 2009, this merged market of Main and Second Boards will be known as the Main Market, hence the listing of both Boards.
XBRL stands for eXtensible Business Reporting Language. It is an electronic communication of business and financial data language developed to present financial statement on the Internet. The key advantage of this new “language” is that an identifying tag is applied for each individual item of data instead of treating them as a block of text.
After touching briefly on the presentation of financial statements for an Islamic bank in my earlier article, we now move on to a little bit more detail. Let us look at the key differences in presentation of financial statements between conventional an Islamic banking.
