The Securities Commission of Malaysia and Bursa Malaysia, the country’s stock exchange, have unveiled a new mandatory sustainability programme for onboarding directors of public listed companies (PLCs).

Aiming to reinforce the commitment of listed companies to environmental, social and governance (ESG) practices at the board level, the Mandatory Accreditation Programme (MAP) Part II: Leading for Impact (LIP), is the second part of Bursa Malaysia’s listing requirements. The MAP lays out the directors’ roles, duties, liabilities, and obligations, particularly on corporate governance.

“We believe the introduction of LIP for PLC directors is timely, as it is a significant step towards strengthening the commitment towards ESG practices among boards,” says Datuk Muhamad Umar Swift, CEO of Bursa Malaysia.

The new rules seek to provide directors with the foundation to address sustainability risks and opportunities effectively, and have better oversight over matters that pertain to sustainability in their respective companies, according to the Institute of Corporate Directors Malaysia (ICDM).

The regulators have tapped the ICDM to serve as knowledge partners for the LIP, in line with their mandate to enhance the overall effectiveness of boards and promote excellence in sustainability-driven governance.

Under the programme, which will take effect on August 1st this year, all first-time directors and directors of listing and transfer applicants must complete the sustainability programme “within 18 months from the date of appointment or admission, respectively”.

Existing directors of companies listed on Bursa Malaysia’s Main and ACE markets have up to 24 months to complete the programme.

Bursa Malaysia pledges to provide the necessary support and resources for listed companies to accomplish the programme. At the same time, the bourse operator hopes directors will be able to “foster sustainable growth within their organizations to ensure long-term value creation for their stakeholders”.

For its part, the Securities Commission says the development of the LIP is in line with its corporate governance priorities aimed at strengthening the ability of boards to address sustainability considerations effectively.

Chairman Datuk Seri Awang Adek Hussin says the new requirements are important for boards to stay on top of sustainability-related developments so they can effectively manage sustainability risks while still capitalizing on new opportunities.

“This is especially important where stakeholders are becoming increasingly concerned about ESG issues,” he adds.