Corporate Social Responsibilty: Trends and Developments in Malaysia

Abstract

Prior to independence the concept of CSR is an alien concept in Malaysia. Thus this paper will highlight and trace the development of CSR in Malaysia which owns its origin from the Second Malaysia Plan(l971-1975) and the position of CSR in the context of corporate legal environment in Malaysia through the core principle of "trusteeship" and the "philanthropic" rule which are two important ingredients of the concept. Company directors are increasingly perceived as trustees for various "stakeholders" who include the shareholders, employees, consumers, suppliers and the wider community. Further legal development relating to corporate philanthropic including the impact of the ultra vires doctrine on corporate philanthropic will also be analyzed namely the legal structure under the Companies Act 1965. The concept is still in its rudimentary stage in Malaysia. Nevertheless, lately in preserving public interest, the Malaysian government has taken drastic measures by imposing requirements and obligation to specific companies namely government link companies (GLC) in Malaysia to take into account social responsibilities to the public. As part of the GLC transformation program, one of the initiatives for GLC is achieving value through social responsibility and this includes to become responsible corporate citizens while creating value for their shareholders and stakeholders. Further the Malaysian Stock Exchange or Bursa Malaysia has also played a significant role in promoting CSR among public listed companies in Malaysia. This paper will also discuss the change in corporate attitude to CSR as a result of the new framework implemented for GLC and CSR framework by Bursa Malaysia. The legal implications of the extent of duties and obligation of companies in Malaysia in CSR would also be examined and it is suffice to say at this level, that without legal intervention, the concept of corporate social responsibility may never be implemented in Malaysia.