- Thought Leadership
Leading Governance Practices for Directors
The FORUM explores and studies current and emerging Board leadership and corporate governance issues that impact Boards. Special areas of interest will be identified for research and study.
Practices on Non-Executive Directors’ Compensation
- “Directors’ Remuneration Report 2015“
In 2015, the FORUM completed a new Directors’ remuneration study to review Non-Executive Directors’ (NEDs) remuneration practices of financial institutions (FIs) in Malaysia. The last study was conducted in 2010.
The Directors’ Remuneration Report 2015 (Report) recommends bold changes to NEDs’ remuneration, which recognise their contributions in light of increased expectations on their role and responsibilities.
In addition to NEDs’ remuneration, the Report also takes a comprehensive approach to recommend changes to manage Board talent and Board processes and structure. The Report takes a holistic Board talent management approach by recommending the adoption of robust practices in Board nomination and evaluation processes, with recommendations on protection of Directors’ legal liabilities and considerations for Board size.
Recommendations – Strategy for Holistic Board Talent Management
The Report provides a practical framework and step-by-step approach to guide Boards in shaping the design of equitable remuneration practices for NEDs. The Report’s recommendations will add value to Board effectiveness and:
- encourage development of world class directors;
- attract and retain highly qualified directors; and
- promote board diversity.
The Study involved a robust consultation and research approach with strong stakeholders’ engagement. 82% of FIs’ viewpoints were gathered through surveys, interviews, focus group discussions and industry consultation with NEDs, Company Secretaries and Chairmen of Boards and Remuneration Committees.
The Report is part of Membership Benefits and is exclusive to FIDE FORUM Members.
“Performance Pays 2010”
In 2010, the FORUM commissioned a research and study on remuneration practices of NEDs in FIs in Malaysia. The study provides a framework for setting and structuring remuneration for FI NEDs in Malaysia. There are two (2) volumes to this report, namely:
Volume 1: Six Critical Cases for Change
The study outlines six reasons for the need to change the current remuneration practices. Remuneration levels and practices were compared to those in Singapore, Thailand, Hong Kong, Philippines, Australia, India, United Kingdom and the United States of America.
Volume 2: A Performance Driven Remuneration Framework
The study proposed a 4-step framework guide for FIs in setting the remuneration for each individual director and for all directors.
Directors Register – Board Leadership Framework for Financial Institutions in Malaysia
The Directors Register is a game changing initiative as it provides a new source of board talent for financial institutions to select their Board candidates.
The Handbook sets the stage for the rationale of setting up a Directors Register. It describes the importance of an objective Board leadership selection process as well as details the robust selection process in identifying Board talent who can assume the role and responsibilities of directors of LFI Boards for the purpose of admission to the Directors Register. It includes a comprehensive description of the experiences, competencies, traits and drivers that director of a financial institution in Malaysia should possess.
The publication is part of Membership Benefits and is exclusive to FIDE FORUM Members.
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