Reawaken The Risk Governance in The Malaysian Corporate

Habibun Nisa Mohamed Ajmal; Mohd Bahrin Bin Othman; Hariati Binti Mansor

doi:10.47405/mjssh.v6i10.1094

Habibun Nisa Mohamed Ajmal Department of Law, Universiti Teknologi MARA, Sabah Branch, Kota Kinabalu Campus, Sabah, Malaysia
Mohd Bahrin Bin Othman Faculty of Law, Universiti Teknologi MARA, Shah Alam, Selangor, Malaysia
Hariati Binti Mansor Department of Law, Universiti Teknologi MARA, Johor Branch, Pasir Gudang Campus, Johor, Malaysia

DOI: https://doi.org/10.47405/mjssh.v6i10.1094

Keywords: risk governance, director, auditor, risk officer, risk management

Abstract

Risk governance is about balancing the company’s business interests and the interests of stakeholders who might suffer loss or harm from the company’s commercial activities. It is mainly concerned with preventing mistakes or wrongdoings than correcting them. This paper aim is to study the state of risk governance in the Malaysian corporate sector. It specifically studies the way risk governance is regulated and its relation to stakeholders’ interests. This study is based on the existing laws in Malaysia. The laws in the United Kingdom and the United States are studied for a comparative analysis and lessons to be learned. The paper suggests that the role of regulators is crucial to initiate and compel companies to establish and maintain a risk governance system and incorporate it as a corporate culture. It also suggests that co-regulation between the regulatory authorities and the industry is needed to successfully push efforts and participation by companies to establish and maintain an effective risk governance system. The paper is significant as it contributes to the improvement of risk governance in Malaysian businesses in general and in the corporate sector specifically and adds to the body of knowledge on law and governance.

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