Tag: Institute of Corporate Directors Malaysia

• The 2024 ASEAN Board Trends Survey by the Institute of Corporate Directors Malaysia calls on boards to take stock of their effectiveness by addressing the five critical areas of board governance in Southeast Asia and introduces the ASEAN Directors Registry to advocate for enhanced regional representation.

The Institute of Corporate Directors Malaysia (ICDM) recently concluded a comprehensive survey across Southeast Asia in collaboration with its eight (8) partners under the ASEAN IOD Network that highlights the imperative for boards to sharpen their foresight to assess and steer their organisation’s business model, governance, talent, dynamics, and culture as they position their boards for the future.

The survey of 335 respondents comprising boards and C-Suites management from across the region reiterates the urgency for boards to evaluate their effectiveness and shift their current strategic board priorities to ensure they address the key threats that they expect to be more prominent over the next two (2) years. The four (4) key threats include:

(i) Having the right talent and leadership;
(ii) Diplomacy in managing macro and geopolitical uncertainties;
(iii) Sustainable and effective operational strategy;
(iv) Board-management relationship and dynamics.

Michele Kythe Lim, President and Chief Executive Officer (“CEO”) of ICDM emphasised, “Amidst the ongoing economic challenges, we remain steadfast in our commitment to navigating leadership in the dynamic landscape of Southeast Asia. Governance is coming into focus on a more profound level in the wake of heightened stakeholders’ expectations, as evidenced by the many changes taking place on boards around us recently. As leaders, we recognise the pivotal role of talent, the power of effective leadership and the imperative of sustainability in our current environment and that a paradigm shift at the board level is necessary to confront the reality and barriers in their pursuit for growth. This regional survey is part of our hope to collectively transform leadership and drive businesses to greater heights by encouraging them to launch into action and openly address the critical areas in board and corporate governance that will nurture deeper cohesion in organisations.”

Urging boards to cultivate a forward-looking mindset and ingrain a more robust culture to turn risks into growth opportunity, ICDM’s 2024 ASEAN Board Trends Survey identified five (5) critical areas in board governance that require immediate intervention to reinforce board effectiveness and ensure companies are equipped for the challenges of the future. These include:

(i) To Realign Board Agenda and Set Priorities Right: Boards often cling to outdated approaches, looking at things through yesterday’s lens and failing to adapt to changing circumstances. As a result, corporate priorities overlook the key threats and changing environments. Boards must stay informed about current and future business trends while adapting to new threats, risks and opportunities that build their path to the future.

(ii) To Improve Board-Management Relationship and Dynamics: Misaligned priorities between boards and their management were noted throughout the survey, with differing ideas on key organisational priorities and areas that require more attention from the board. While boards place greater importance on business model agility, diversification and transformation, management believe human capital strategy and development should be a priority. Boards and management must conduct more meaningful discussions, realign and agree on priorities as well as expectations of both parties to enhance the working relationship dynamics for increased effectiveness.

(iii) Progressive and Forward-looking Board Architecture and Culture: Management express reservations about the board’s current ability and skillset to steer the company strategically. The existing blend of knowledge, experience, and qualities fall short of supporting evolving business needs in the coming years. Boards must begin cultivating a culture of open dialogue, courage, and candour amongst each other. Nomination and Remuneration Committees (NRC) play a vital role in ensuring the right mix of board members, led by the chairman who plays a pivotal role in fostering a progressive board culture and managing board-management dynamics. 

(iv) Board Effectiveness at Taking Stock: While boards may perceive their performance positively, management highlight a lack of diverse perspectives which hinders insightful discussions and creates blind spots to critical issues. Some respondents felt that their board deliberations do not bring value or enhance decision-making quality, with over half stating that board members rarely express conflicting views. Boards must look internally to assess their value proposition, skills, governance and mindset to effectively catalyse their growth.

(v) Navigating Board Sustainability Challenges: While many acknowledge that sustainability goes beyond mere reporting and some boards are already embracing or planning to adopt sustainable strategies, management remain sceptical about the board’s current knowledge and ability to fulfill its oversight role. While boards recognise that their challenge lies in setting up the right governance with clear performance target measurement, they must also acknowledge the important need to support the human capital function and concerns through talent governance. Health, safety and wellbeing, talent management and succession planning are among top sustainability matters for boards’ attention.

As boards begin to address these critical areas in governance, the key actions they need to take begin with undertaking a formal board effectiveness evaluation encompassing candid, 360-degree assessment. Boards must obtain holistic perspectives to better understand their current landscape, working dynamics amongst themselves and between their management, as well as identify development needs. It is vital that boards reevaluate their composition and remuneration packages at regular intervals and proactively foster strong board-management relationships and dynamics. In realigning organisational priorities through joint strategic planning sessions, boards must practice the art of asking challenging questions for more robust discussions. Organisations must prioritise talent governance and organisational culture to ensure a conducive environment for innovation and productivity, while embracing sustainability agendas authentically, avoiding greenwashing, and embodying authenticity and purpose as leaders are essential for driving organisational success.

In addition to the 2024 ASEAN Board Trends report, ICDM also announced the formation of an ASEAN Directors Registry under the ASEAN IOD Network initiative. Aiming to go fully operational in July, the registry marks a significant stride in fostering global recognition for ASEAN board talent. Recognising the needs of boards with regional perspectives, this initiative aims to actively advocate for enhanced ASEAN representation on the boards of businesses with a presence in the region. With this registry, it seeks to elevate the value proposition for members of ASEAN Institutes of Directors by expanding their access to a broader spectrum of directorship opportunities and give organisations a wider selection of board-ready candidates with international or regional experience.

The survey was conducted in collaboration with partners under the ASEAN IOD Network, which was initiated in 2020 to better serve the board community in the region and beyond. These partners include the Institute of Directors Thailand (IoD Thai), Institute of Corporate Directors, Philippines (ICDPh), Vietnam Institute of Directors (VIOD), Myanmar Institute of Directors (MIoD), Singapore Institute of Directors (SID), Indonesian Institute of Corporate Directors (IICD), Darussalam Assets Sdn Bhd and the International Business Chamber of Cambodia (IBC). The survey can be accessed on ICDM’s website here.

About the Institute of Corporate Directors Malaysia (ICDM):
The Institute of Corporate Directors Malaysia (ICDM) is a membership-based organisation whose mandate is to professionalise directorship in Malaysia. As the national institute of directors (IoD), ICDM is committed to providing continuous professional development – empowering boards and directors with forward-thinking mindsets, practical knowledge and essential competencies. Established by the Securities Commission Malaysia (SC) and supported by Bank Negara Malaysia, Bursa Malaysia and the Capital Market Development Fund (CMDF), ICDM’s goal is to be the leading influence of excellence in governance and to build a robust corporate governance culture in Malaysia. For more information on ICDM, please visit our website at www.icdm.com.my

• Sustained double digit year-on-year growth signals growing awareness and responsibility by senior leadership, companies and businesses to step up

The Institute of Corporate Directors Malaysia (ICDM) announced its progress and shared key organisational milestones for the financial year ended 31 December 2022 (FY2022), and for the period from January to April 2023 at their recent Annual General Meeting (AGM). The announcement is also in conjunction with ICDM’s 5-year milestone since the Institute was established in 2018.

Since inception in 2018, ICDM has seen sustained high double-digit organisational growth and continued to deliver impact through its platform and initiatives. In their efforts to professionalise boards and directors in Malaysia, the growth is indicative of the increasing awareness and acceptance of the need for senior leadership to build capacity in evolving and developmental areas to better guide companies and businesses. Notably, the key growth areas are as follows:

i. Membership: Individual membership has increased to 1,168 (25% higher compared to the preceding reporting period) whilst corporate membership has surged to 86 (30% increase from the preceding reporting period). Overall, the membership base has grown 13-fold and 8-fold respectively for individual and corporate membership, compared to when ICDM concluded its first-year performance in 2018. To contextualise, ICDM’s annual membership growth rate amongst other institutes of directors (IoD) in the region is second only to Australia and New Zealand.

ii. Director education programmes: Facilitated 112 programmes compared to 93 programmes in the previous reporting period, benefitting 6,705 participants which is 39% higher (from 4,830). In total, ICDM has facilitated 305 programmes to date and benefited 18,309 directors and participants.

iii. Board & Directors Effectiveness Evaluation (BDEE): Completed 20 external board and directors board evaluations, a 33% rise from the previous reporting period. To date, ICDM has conducted 37 BDEEs for companies and boards, of which 76% are public listed boards.

iv. Independent director sourcing requests and placements: In this reporting period, there has been a rise of 28% to 87 independent director sourcing requests and a total of 37 successful board placements by ICDM. Over this period since ICDM’s establishment, the total success rate in placing ICDM Members on boards is at 58, compared to 2 in 2018.

Tan Sri Zarinah Anwar, Chairman of ICDM emphasised ICDM’s unwavering efforts in professionalising directors, ensuring their capacity to uphold best practices in governance, shifting mindsets towards the continuing acquisition of knowledge and competencies for improved performance, proficiency and effectiveness.

She said, “The mandate for board directors as leaders is clear – navigate this complex environment, deliver positive impact, optimise opportunities, promote equity, and foster innovation. At ICDM, we recognise the challenges and complexity of the board’s multi-faceted role and the need for a proactive approach towards tackling change and problem-solving.”

This year, ICDM celebrates its 5-year milestone with the continued acceptance, participation and growth of its programmes, which can be attributed to the mind shift towards the need for ongoing knowledge and capacity building on the back of the Institute’s efforts in professionalising board and directorship. Today, the overall expectation of capability across all stakeholders – be it from an overall sustainability, diversity, equity, or inclusion perspective, has heightened the need for improved performance, proficiency and effectiveness of boards and directors. Against this backdrop, ICDM’s efforts and support to the director community will constantly evolve in tandem with the needs, and bringing together collaborative platforms and initiatives to problem solve, advocate and navigate the complex business environment.

Over the past five (5) years, ICDM’s capacity-building efforts and advocacy platforms are focused on strengthening board leadership for agile and responsible businesses in line with the Securities Commission Malaysia’s Corporate Governance Strategic Priorities (2017-2020 and 2021-2023). In 2022 alone, key initiatives undertaken by ICDM such as hosting of the second edition of the International Directors Summit entitled ‘The B-Factor: [Bold + Brave] Boards’ are testament to the growing awareness of companies and boards of the importance of staying ahead of the game as well as a sustainable, proactive leadership. On this front, ICDM has also been appointed as the sole provider of Bursa Malaysia’s Mandatory Accreditation Programme Part I (MAP) which equips directors with the necessary skills to excel in their roles.

Michele Kythe Lim, President & Chief Executive Officer of ICDM said, “As the only national IoD and a membership-based organisation, we remain true and committed to our mandate to build capable, purpose-driven board and directors, with the goal of elevating business performance and achieving good corporate governance. We have focused efforts to institutionalise and build responsible, proactive boards, by creating pathways and the right network for board directors to transition to a sustainable and future-focused leadership. At the same time, we want to catalyse the mindset shift to self-regulation at the board level. One thing is clear: the mindset shift is happening, and we see this demonstrated across the adoption of our initiatives and programmes, such as the placement of 33 women directors on boards in the reporting period alone; placement of first-time directors on the board of public listed companies (PLC), as well as the shift in board priorities and growing interest in areas that we considered ‘new’, from Sustainability or Environment, Social and Governance (ESG), innovation and digitalisation, talent, culture, cybersecurity, climate risks, amongst others. Today, ICDM is at a crossroads of our journey as an IoD, and as we enter the next phase of our growth, we will continue to prioritise and focus our efforts to catalyse performance and excellence in companies & businesses through a minimum benchmark of standards, as well as create positive community impact through high-performing boards, directors and leaders.”

ICDM will continue to deepen efforts in elevating directorship and board leadership through collaborative efforts with regulators, industry and IoD counterparts on mandatory, public and bespoke development programmes, as well as further enhancing MAP Part I. Notably, ICDM has recently been designated as the exclusive provider for the Securities Commission Malaysia’s (SC) Mandatory Accreditation Programme Part II: Leading for Impact (LIP), which will commence from August 2023, to enhance listed directors’ oversight of sustainability matters by providing them with advanced knowledge and tools. This is arising from the recent amendments to the Bursa Malaysia Listing Requirements which state that all existing and first-time directors of PLCs and ACE Market of Bursa Malaysia should attend the LIP. In addition, ICDM will also be hosting ASEAN+ IoD event, and in conjunction with the event, the launch of the 2024 ASEAN Board Trends Report. The Institute will also be launching two (2) research studies around Board and Senior Management Remuneration Practices in Malaysia and, Reimagining Leadership in a Hybrid World (Work 3.0), amongst others.

For more information on ICDM membership and how it can benefit the directorship journey, please visit https://icdm.com.my/. For more information on the recently launched MAP II: Leading for Impact (LIP) please visit https://lip.icdm.com.my/.

About the Institute of Corporate Directors Malaysia (ICDM)
The Institute of Corporate Directors Malaysia (ICDM) is a membership-based organisation whose mandate is to professionalise directorship in Malaysia. As the national institute of directors (IoD), ICDM is committed to providing continuous professional development – empowering boards and directors with forward-thinking mindsets, practical knowledge and essential competencies. Established by the Securities Commission Malaysia (SC) and supported by Bank Negara Malaysia, Bursa Malaysia and the Capital Market Development Fund (CMDF), ICDM’s goal is to be the leading influence of excellence in governance and to build a robust corporate governance culture in Malaysia.