Corporate social responsibility and good governance - a Malaysian perspective

Abstract

Within the Scope of company law, the notion of corporate governance involves issues such as the exercise of power over the directors of the enterprise, the supervision and control of executive action, concern of the effect of the entity of other parties , and the regulation of corporations within the jurisdiction in which they operate. The constrasting needs of the owners of the company (its shareholders) might conceivably leads to directors acting in a matter Which could be deemed to be inconsistent with the concern of the "stakeholders". Thus this paper will focus on the question whether within the system of corporate governance, does the directors owes a wider obligation beyond the traditional notion of accountability to beholders and whether directors are under an obligation to protect the creditors of the company while the company is a going concern from a legal perspective. The idea of corporate responsibility, a major component of corporate governance will also be discussed. Within this context it will be argued that the position of certain groups such as the creditors and employees can be feasibly incorporated within the ideas of "stakeholders". Finally this paper will also evaluate the practicality and the future prospects of some key issues in corporate governance related to company law namely creditors interests, directors obligation and the stakeholders within the Malaysia legal framework i.e. under the Malaysian Companies Act 1965 and the extent in which its differs from the common law position in United Kingdom.