Managing corporate risk and achieving internal control through statutory compliance

Purpose – The objective of this paper is to encourage compliance amongst the corporate community and to examine how statutory provisions will assist companies to implement internal control mechanisms and in managing risks, so as to achieve business efficiency. Design/methodology/approach – This paper may be categorised as a general review paper that will elucidate on the efforts in integrating the corporate governance, internal control, and risk management provisions into the Companies Act 1965 (Act 125), (CA 1965) which is a principal legislation of company law in Malaysia. Findings – With consistent compliance, companies will reap unlimited benefits that flow from efficient processes which will enhance corporate capabilities, effective management, coordination and the overall organisation's ability to create value and ultimately, in maximising its shareholders' wealth. Originality/value – The paper shows that corporate risks could be managed and internal control could be achieved by companies through compliance with a legal framework that reinforces good governance and is infused with such provisions. The target audience of this paper is towards the officers of companies, corporate players as well as regulators, policy makers and legislators.