Factors to consider for appointment of independent director

Directors

The following are some factors to consider when selecting candidates to be independent directors of a public listed company in Malaysia

• Whether the proposed independent director complies with the requirements within the “independent director” definition in Chapter 1 of the Listing Requirements, read together with PN 13 of the Main Market Listing Requirements or GN 9 of the Ace Market Listing Requirements

• Do not rely solely on recommendations from existing directors, management, or major shareholders

• Utilise independent sources to identify suitable candidates

• Whether the proposed independent director has any actual or potential conflict of interest vis-à-vis the appointing company such as the proposed independent director has an interest in any entity which is (1) carrying on a similar trade as the appointing company; or (2) a customer or supplier of the appointing company

• Whether the proposed independent director is able to devote sufficient time to the company

• Avoid any appointment that may cause doubt on the integrity and governance of the company

• Whether the proposed independent director is able to exercise independent judgement and act in the interests of the company

A person who agrees to act as an independent director of a public listed company is required to confirm his/her independence to Bursa Malaysia under the Listing Requirements.

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This post was first posted on Linkedin on 20 May 2021.

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