Abstract
A two-tier model of corporate governance is perceived to be suitable for the corporate governance of liability partnerships (LLP) in Malaysia because the ownership and management of LLPs are both asserted on the partners, and there is the absence of a board of directors (unlike a company). As such, there is a need for a body to supervise the members/partners to ensure good governance for an LLP. All the corporate governance theories – namely agency theory, ethical theory, stakeholder theory, and corporate social responsibility (CSR) – are also relevant to LLPs in ensuring a good corporate governance framework. As such, the legal justifications and theories to support a corporate governance framework for LLPs should be similar to a company. However, due to the internal regulations of LLPs (which have overlaps between ownership, management, and decision-making structures), this chapter would propose a two-tier model of corporate governance with perceptive view on sustainability's development goals to be adopted for LLPs.
TopCorporate Governance Structure For Llp
The corporate governance is a term normally associated with companies, which is the predominant business structure. However, an LLP, like a company, is a body corporate, and good corporate governance practices are as important for an LLP as they are for the company.
Key Terms in this Chapter
Two-Tier Model of Corporate Governance: A dual board or two-tier system is a corporate structure system that consists of two bodies i.e. the Council of Delegates to govern the Board of Directors and the Board of Directors to manage a corporation. The roles and relationships between the two bodies vary across countries.
Corporate Governance: The framework that directs and controls businesses which the corporate management is the responsibility of their boards of directors. The shareholders’ duty is to choose directors and auditors and to ensure that an appropriate structure for governance is in place.
Sustainable Development Goals: Known as the Global Goals, were adopted by the United Nations in 2015 as a universal call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity. The 17 SDGs are integrated—they recognise that action in one area will affect outcomes in others, and that development must balance social, economic and environmental sustainability.
Limited Liability Partnership (LLP): A type of general partnership where every partner has a limited personal liability for the debts of the partnership.