Legal Transplantation and Local Knowledge: Corporate Governance in Malaysia

Australian Journal of Corporate Law, Vol. 20, pp. 55-83, 2006

29 Pages Posted: 28 Aug 2009 Last revised: 20 Mar 2017

See all articles by Mohammad Rizal Salim

Mohammad Rizal Salim

Nottingham University Business School, Malaysia Campus

Date Written: 2006

Abstract

Malaysia’s company law is based on the British template, brought about by British colonial policy of transplanting British commercial laws to the whole of the British Empire. This has long guided legal development in this area of law. This article argues that the British template is not wholly appropriate for many of Malaysia’s governance problems. The shareholding structure in Malaysia gives rise to a specific agency problem, the powers of controlling shareholders, which was inadequately addressed by a corporate regime which focuses on the duties of directors. There are other issues which impact on the efficacy of corporate governance regulation in Malaysia. These include culture and value systems, the quality of legal institutions, issues relating to access to courts, and the influence of the state in businesses. The problems arising from these can neither be resolved merely by reforming the law-in-the-books nor by adopting foreign legal templates. Reforms should instead be more comprehensive and pay attention to the uniqueness in the local setting.

Keywords: corporate governance, Malaysia

JEL Classification: K, K2, K4

Suggested Citation

Salim, Mohammad Rizal, Legal Transplantation and Local Knowledge: Corporate Governance in Malaysia (2006). Australian Journal of Corporate Law, Vol. 20, pp. 55-83, 2006 , Available at SSRN: https://ssrn.com/abstract=1462890

Mohammad Rizal Salim (Contact Author)

Nottingham University Business School, Malaysia Campus ( email )

Nottingham University Business School
Jalan Broga
43500 Semenyih, Selangor 43500
Malaysia

HOME PAGE: http://www.nottingham.edu.my

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