This year’s Corporate Governance Survey Report offers good news to the investing community. The 2006 report, a joint study by the Minority Shareholder Watchdog Group and the University of Nottingham Business School (Malaysia Campus), concluded that there has been “general improvement in companies’ compliance with local and international corporate governance principles and best practices”.

The report is based on a survey of the top 200 companies (by market capitalization) on the Bursa Malaysia Main Board, and places them in rank order against a wide range of corporate governance criteria, with special emphasis on board composition, director independence, and accountability and auditing practices. Although the report is hardly exhaustive – some of the remaining 447 main board members may well practice exceptional corporate governance – a look at some of the high achievers in the survey reflects a who’s who of Malaysian corporate success stories, suggesting that the market acknowledges and rewards well-governed businesses.

In first place, unsurprisingly, is Public Bank Berhad, whose detailed and exhaustive reporting strategies and high level of disclosure once again confirm their status as one of Malaysia’s best-run companies. Newly listed Bursa Malaysia Berhad is in second place, but given its role as one of the market’s principal regulators, a lower position would call its own credibility into question. The rest of the top five are all companies with a strong recent history of good corporate governance – Telekom Malaysia Berhad, British American Tobacco (Malaysia) Berhad, and Bumiputera Commerce Holdings Berhad.

Looking a little further down the list, the report offers a few pleasant surprises. Scomi Group Berhad makes it into the Top-20 in joint 19th place, despite adverse and possibly unfounded publicity in the foreign media. Joining Scomi in 19th place is Malaysia Airline System Berhad, suggesting that Idris Jala’s new broom really is sweeping clean. It is also worth noting that MAS’ improved corporate governance score coincides with their dramatic return to profit, once again confirming that good corporate governance helps to create value for shareholders.

The biggest surprise in the Top-20, however, is probably Naim Cendera Holdings Berhad, a Sarawak-based property and construction group. Historically, Sarawakian companies have never been star performers in the corporate governance stakes, yet Naim, listed only 3 years ago, was second overall in the property sector, and one of only four companies to provide detailed disclosure of directors’ remuneration. Hopefully Naim’s success will being with it the acknowledgement and support of investors, and demonstrate to the laggards in the survey that – as far as investors are concerned – virtue has its own rewards.

On a final note, the technology sector reported the lowest overall compliance scores in the survey. As this sector has the highest level of information and communications technology expertise, it is high time that regulators brought pressure to bear to ensure that at least some of that expertise is channeled towards better communication with shareholders and the investing public.