WHEN N, a female engineer in her late 20s was offered a directorship in a company she had barely heard of, she was told that she “practically did not have to do anything”. She only had to sit back and receive a handsome monthly stipend.

What was unbeknownst to her were the potential exposure and liabilities that came along with the position—from civil claims involving alleged wrongful dismissal by the board or senior executives of the company to allegations of workplace sexual harassment or misconduct, enforcement actions by relevant authorities or regulatory bodies, criminal prosecutions, and so on and so forth. Section 17A of the MACC Act, 2009 provides that a director or officer (e.g. senior management or personnel with significant control over the company) may be found liable and penalised for bribery or corruption conducted by a “person associated with the commercial organisation”. This person is broadly defined under the Act to not only cover direct members of a “commercial organisation” such as directors, partners or employees, but also include a person who “performs services for or on behalf of the commercial organisation”.

In other words, a “commercial organisation”, and consequentially its director, controller, officer or partner or a person who is “concerned in the management of its affairs”, can be presumed to have committed an offence under Section 17A—unless they can establish that the offence had been committed without their consent and that they had exercised “due diligence” to prevent the commission of the same.

While there is a difference in the roles and responsibilities between an executive director and a non-executive director, both are treated the same in the eyes of the law, especially in scenarios where a duty is imposed upon the director and/or officer of a company.

As directors and officers become increasingly aware of the accompanying risks and liabilities, and consequentially, the importance of indemnity arrangements in respect thereof, Directors and Officers (D&O) Liability Insurance is an emerging trend, especially in Asia. For example, a recent study shows that 75% of directors and officers in Asia cited regulatory breaches as a main area of concern, thereby outlining the importance of due consideration to adequacy of indemnity undertaken to adequately protect themselves, especially in risk-prone matters. On that note, though crucial, especially since insurance coverage would be contingent on the wordings of each policy, D&O Liability Insurance, which commonly involves unfamiliar jargon and structures, can be challenging to decipher.

Writing the Book You Cannot Find on the Shelves

JJ Chan was engaged to handle his first D&O case about 10 years ago. A Barrister-at-law of Gray’s Inn, London, JJ, who has significant experience in niche litigation, particularly in corporate and financial lines, realised in the course of his research that there is a dearth of books on the matter not just Malaysia, but also the Commonwealth countries (with most publications coming from the US). “I remember scouring everywhere for materials on D&O, even in established bookshops in London (including the famed legal booksellers, Wildy & Sons of Carey Street, a go-to for students and barristers alike). I noticed that there weren’t many books on D&O from Commonwealth countries, and that most of them were from the US as the American jurisprudence is replete with case authorities on D&O matters—including other types of insurance as well—and that a large corpus of case law had been built up there for over more than 30 years,” JJ says.

JJ decided to take matters into his own hands by co-authoring a book entitled Directors & Officers Liability Insurance: Selected Articles, Cases and Materials with Kevin LaCroix, a well renowned D&O guru and author of The D&O Diary.

“I called Kevin out of the blue one day after reading one of his articles on a complex D&O issue in one of my cases, and our friendship grew over the years. I came to realise that we were quite like-minded in that we both have an interest in sharing our knowledge and experience with the industry and community at large, and soon, we began working on this book in hopes that it would facilitate a better understanding of this niche area of law,” JJ shares.

Annually, the Department of Statistics Malaysia reports an average of 600,000 to 700,000 enterprises in existence. Based on a report published late last year, Penang, commonly dubbed the “Silicon Valley of the East”, is home to over 350 multinational corporations (MNCs), 4,000 SMEs and more than 200 Malaysian digital status companies. It is invariable that Penang would also be home to an increasing number of directors and officers as it continues to flourish economically.

“As our state and country’s economy continues to grow, and consequentially also the number of directors and officers, we hope that there would also be an increase in awareness amongst them on their inherent exposures and responsibilities so that they can make better and more informed decisions, including indemnity arrangements to better protect themselves and their businesses,” JJ remarks.

In this regard, he is actively engaging with reputable and internationally renowned legal, educational and financial/professional institutions, including Lloyd’s of London, his alma mater Gray’s Inn, London, the Malaysian Ministry of Higher Education, Asian Institute of Insurance, Institute of Corporate Directors Malaysia, etc. on collaborations including briefings and trainings.

JJ’s efforts did not go unnoticed within his industry. At the ALB Malaysia Law Awards in April 2025, he ranked within the top three Managing Partners of the Year. JJ is also one of the finalists for Managing Partner of the Year at the Regional ALB South East Asia Awards—the first and only Penang lawyer to ever achieve this feat.

The completed book is a compilation of selected articles one merging trends and recurring issues in D&O matters and corporate governance, liabilities of directors and officers and the permissibility of indemnification under the Malaysian Companies Act, 2016, among others. The first publication of its kind in Malaysia (and Asia Pacific, for that matter), it is prepared and shared primarily for academic purposes, as part of JJ’s pro-bono endeavours. The book encourages a better understanding of this area of law, so that before taking a seat at the boardroom table, directors realise the weight of the role they are taking on.