KUALA LUMPUR, Aug 3 — Bank Negara Malaysia (BNM) has issued an enhanced standards aimed at raising the bar for corporate governance across financial institutions, effective immediately.

In a statement today, the central bank said among the key changes introduced in the standards were strengthened requirements on board composition, including a requirement for boards to have a majority of independent directors.

"It also includes enhanced expectations for the board and its committees, including a requirement to approve and maintain credible recovery, as well as resolution plans under conditions of stress,” it said.

BNM said the boards were also expected to set a tenure limit for independent directors which should not generally exceed nine years.

"Good governance is a critical component of sound financial institutions and it plays a key role in maintaining public confidence in the financial system.

"In addition, the standards address issues arising from more complex organisational structures and business models of financial institutions that have expanded in size and across borders,” it added. — Bernama