On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements of the Minority Shareholders Watch Group (MSWG) for the financial year ended 31 December 2017.
2017 was a very busy year for MSWG as we continued to advance the corporate governance (CG) agenda in the capital market primarily through our monitoring activities and advocacy programmes, CG events as well as collaborative role with other industry players.
On the economic front, the Malaysian economy growth remained strong at 5.9% for 2017, predominantly driven by private sector spending. It was a buoyant year for our capital market, where securities market capitalisation rose to RM1.9 trillion from RM1.7 trillion in 2016. The FBM KLCI finished at a year high of 1,796.81 on 29 December, up 155.08 points or 9.45% from 1,641.73 at end-2016. Public listed companies (PLCs) generally reported better earnings in line with the country’s strong economic performance.
HIGHLIGHTS OF ACTIVITIES
The 2017 AGM season saw important issues highlighted by our analysts and representatives in over 300 general meetings. This year we also highlighted the requirements of the new CG Code, launched by the Securities Commission in April 2017, which encouraged companies to put more thought and consideration when adopting and reporting on their corporate governance practices. The new CG Code sets a higher expectation on the best practices of the FTSE Bursa Malaysia Top 100 Index companies, and those with a market capitalisation of RM2 billion or more. We will closely monitor these companies, in the future reporting seasons.
We continued to conduct engagement sessions with the Board and key senior Management of PLCs outside of the AGM platform. This proactive dialogue approach is a beneficial tool to convey our expectations on CG best practices as well as other issues highlighted by minority shareholders. Our advocacy programmes and engagements with our corporate subscribers on the expectations of the ASEAN CG Scorecard, were also successful, as we saw that many PLCs improved their CG practices as measured by our 2017 CG Scorecard assessment.
MSWG was the Premier Partner of the International Corporate Governance Network (ICGN) Annual Conference 2017 held in Kuala Lumpur from 11-13 July 2017 and hosted by Kumpulan Wang Persaraan (Diperbadankan). The Conference, which was attended by over 400 participants comprising global investors and governance professionals from around the world as well as local companies and investors, focused on the theme of redefining capitalism for a sustainable global economy and explored governance priorities in major Asian markets. The Conference was a success in promoting meaningful dialogue between companies and investors with a series of engagement sessions, company site visits and plenary debates.
MSWG continued to play an active role in the Institutional Investors Council Malaysia (IIC), being a member and also providing secretariat services to IIC. Our participation in the IIC complemented our own role to further enhance CG in the market through driving institutional stewardship, collaborative company engagements and dialogues with institutional investors under the IIC platform. Among significant milestones achieved in 2017 were the registration of IIC under the Societies Act 1966 and garnering nine new signatories to the Malaysian Code for Institutional Investors, which brought the total to 17 signatories as of end-2017.
The highlight for the year was our annual MSWG-ASEAN CG Recognition held in December 2017 which attracted over 700 attendees from the Corporate Malaysia fraternity as well as other stakeholders. We were honoured by the presence of YB Dato’ Wira Othman bin Aziz, Deputy Finance Minister I who delivered the Keynote Address and presented the CG awards to all the award recipients. Adding to the event’s significance was the improved performance of the Top 100 PLCs in 2017 compared to 2016 despite the use of a revised ASEAN CG Scorecard in 2017 which was more stringent compared to its predecessors. The validation process to determine the Top 50 ASEAN companies is still in progress and we are hopeful that more Malaysian companies will be among the Top 50 in the ASEAN region when the results are announced in the fourth quarter of 2018.
Following a thorough search of candidates, I am delighted to welcome Mr Devanesan Evanson as MSWG’s new CEO. Mr Evanson joined us in late December 2017 and brings with him extensive experience in the key areas of corporate governance, risk management and internal controls
NAVIGATING THE FUTURE
While being proud of our achievements, we are much aware that we should not rest on our laurels. The complex business climate, political dynamics, economic stability, and a host of other factors pose many challenges which demand us to be more focused and vigilant in our monitoring of companies, to ensure that minority shareholders’ rights are not sidestepped in the company’s pursuit of growth. With new leadership and backed by our strong foundation and experiences, we are confident that MSWG will be able to navigate the challenges ahead. We will continue to innovate and improve to meet the higher expectations of our key stakeholders.
MSWG has made strides over these years, thanks to the contribution and support of many stakeholders. My gratitude goes to our institutional, corporate and retail subscribers, partners and media for their continued support. My heartfelt gratitude also goes to the Management, staff and Associates, all of whom have been the strong pillars behind MSWG’s success and achievements. Additionally, I would like to offer my personal appreciation to my Board of Directors for their commitment and contribution. We also extend our thanks to the Capital Market Development Fund, Securities Commission, Bursa Malaysia and other relevant regulatory authorities for the support throughout the year.
Tan Sri Dato’ Seri Dr Sulaiman Mahbob Chairman