IPO: Time required to assess independent directors

A company which intends to undertake IPO should start identifying candidates for independent directors as soon as possible.

The definition of “independent director”, read together with the relevant Practice Note/Guidance Note in the Listing Requirements, provides a non-exhaustive list of what an independent director should not be. If a person does not fall within this negative list, it does not mean that the person will automatically qualify to be an independent director.

In essence, an independent director must be independent of management and free from any business or other relationship which could interfere with the exercise of independent judgement or the ability to act in the best interests of the company.

Advisers for IPO carry out assessments to ensure candidates meet the requirements to be independent directors as specified under, amongst others, the Listing Requirements, Malaysian Corporate Governance Code and Bursa Malaysia CG Guide.

The company should take into account the time required to identify candidates for independent directors and carry out assessments on them, to ensure there is no delay to its intended IPO timeline.

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This post was first posted on Linkedin on 16 February 2021.

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