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.
