KUALA LUMPUR (Jan 19): A person can serve as an independent director for not more than a cumulative tenure of 12 years under enhanced listing requirements announced by Bursa Malaysia on Wednesday (Jan 19).

All long-serving independent directors impacted by this enhancement must resign or be redesignated as non-independent directors by June 1, 2023, said Bursa in a statement.

This new regulation comes as the stock exchange operator enhanced requirements in the Main and ACE Market Listing Requirements aimed at further strengthening board independence, quality and diversity.

"Additionally, the exchange introduces a new rule which requires public listed companies (PLCs) to have in place a fit and proper policy that addresses board quality and integrity for the appointment and re-election of directors across the PLC group, which must be published on the PLCs' websites, starting from July 1, 2022.

"PLCs are also required to disclose the application of the PLCs' fit and proper policy in the nomination and election of their directors in their annual reports.

"This seeks to improve the overall quality of directors and promote greater transparency on the criteria for board appointments," said Bursa.

Another key enhancement is the requirement for the PLCs with a market capitalisation of RM2 billion as at Dec 31, 2021 to appoint at least one woman director on their boards by Sept 1, 2022, as announced by the minister of finance in Budget 2022.

For the remaining PLCs, the requirement must be complied with by June 1, 2023.

Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift said the amendments will serve as an impetus for Malaysian PLCs to refresh their board composition, with greater focus on board quality, diversity and independence, that will promote board dynamism ultimately.

"The bedrock of a well-functioning and well-governed PLC is an effective and quality board," he said in the statement.