Boardview www.minda .com.my
Enhancing Board Effectiveness
Issue No.18 October 2016-February 2017
KDN No: PP16092/12/2013(033154)
DATO' TEO CHIANG QUAN
THE BEAUTY OF A
FAMILY BUSINESS
FEATURE
Technology as a
Risk: Cybercrime
& Data Privacy
2016 Global
Board of
Directors
Survey
Contents
Issue no.18 October 2016 - February 2017
Boardview www.minda .com.my
Enhancing Board Effectiveness
Issue No.18 October 2016-February 2017
KDN No: PP16092/12/2013(033154)
DATO' TEO CHIANG QUAN
THE BEAUTY OF A
FAMILY BUSINESS
FEATURE
Technology as a
Risk: Cybercrime
& Data Privacy
2016 Global
Board of
Directors
Survey
COVER STORY EDITORIAL TEAM
04 The beauty of a family Editor In Chief
Dato’ Richard Azlan Abas
business - Dato' Teo Chiang
Quan Content Management
Mazni Ahmad Norilah
Features Premkumar
Diana Seow
09 Technology as a Risk: Simren Kaur
Shahida Zeri
Cybercrime & Data Privacy
Communications and Marketing
13 Wells Fargo Misread its Diana Seow
Simren Kaur
Own Culture Shahida Zeri
16 2016 Global Board of BOARDVIEW is a complimentary
quarterly publication by MINDA.
Directors Survey The views of and opinions
expressed in this publication do
24 Effective Anti-Bribery and REGULARS not necessarily reflect those of
MINDA, its management or its
Anti-Corruption Compliance 23 Book Review editorial staff. All information is
Programs 31 Programme Highlights correct at time of print.
35 MINDA Public
28 Reforming Malaysian This and archived issues may be
Programme Calendar 2017 downloaded from
company law www.minda.com.my
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3
From the CEO's Desk
Dato’ Richard Azlan Abas The Beauty of
Chief Executive Officer Family Business
“In most cases, family businesses are stronger because
of the complementary skills of their members.” - Dr.
Bernard Kliska, Family Business Consulting Group
Welcome to the first issue of Boardview in 2017!
Family businesses are special – they are held together by strands of DNA and the rationale
of benefit. Often they have been around for generations. These firms can have the
strength of the entire family that helps them to hold steadier and be more resilient.
In tough times, family businesses can pull together in ways that ventures with unrelated
workers cannot.
In this issue, we speak with the Chairman and Executive Director of Paramount
Corporation Berhad, Dato’ Teo Chiang Quan on “The Beauty of Family Business”. A
substantial shareholder of Paramount, Dato’ Teo shares his insights in transforming family
business into a renowned public listed organisation.
Dato’ Teo has been instrumental in shaping Paramount into a reputable and financially
sound diversified group. The Group has benefit tremendously from his relentless drive to
push for innovative ideas to grow the business which, in turn, has inspired the Group’s
strength-through-synergy strategy. Dato’ Teo’s visionary leadership has taken the Group to
another level of growth.
Technology As A Risk: Cybercrime & Data Privacy is another interesting read in this issue.
Written by our faculty member, Leesa Soulodre, the article focused on one of Director’s
fiduciary responsibilities in shaping the company’s framework for accountability, control,
and risk management; by ensuring effective cyber-risk resilience and governance, data
privacy and protection, compliance and reputation risk management and stakeholder
engagement.
Across the globe, this issue also features 2016 Global Board of Directors Survey, a benchmark
report by Spencer Stuart together with Women Corporate Directors Foundation (WCD)
that looks at the growing demands on corporate boards with directors taking on a more
strategic, dynamic and responsive role to help steer companies through a hypercompetitive
and volatile business environment. More details at page 16.
2017 will be an interesting year for MINDA. In 2016 we announced MINDA 2.0.
Response to this has been positive. We expect some structural changes to occur in the next
few months. Above all, we focus on our commitment to meeting your needs and serving
entities for which you govern.
Thank you to all of our contributors. To our Academy Alumni and Professional Members,
please keep the feedback coming in by writing to us at [email protected]
Please enjoy the rest of the Boardview.
boardview
4
Cover Personality
The beauty of a
family business
- Dato' Teo Chiang Quan
By Boardview Editorial Team
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5
Cover Personality
Coming from an illustrious line of real estate magnates, Dato' Teo
Chiang Quan has helmed Paramount Corporation Bhd (PCB)
as Group Managing Director and Group Chief Executive Officer
from 1989 to December 2008, and its CEO from April 15, 2013
to July 1, 2014. Under his leadership, he transformed PCB into a
reputable, financially sound and diversified organisation. He has
been PCB Chairman since June 2015, Deputy Executive Chairman
since December 2008 and Director since January 19, 1977. Dato’
Teo has also completed the Harvard Business School Owner/President
Management Programme in 2004 and holds an honorary doctorate
from Middlesex University in the UK. In this issue of Boardview, he
opens up on transforming family businesses to public listed organisation.
Q There is a perceived conflict of interest when Q How strong, if at all, are the potential for
it comes to running a family business versus conflict of interest when dealing with family
a public listed company. Do you share the members in the corporate context?
same thinking? A One cannot run away from the fact
A This misunderstanding between that this is a public listed company.
family businesses, public listed I think even with other families and
companies and GLCs is not their businesses, even if they are not listed, have certain
uncommon. Honestly, I don't see any difference guideline when it comes to good governance.
running a family business or a PLC. All of us believe Conflict of interest only comes to play when transactions
in “professionalising” our organisations. A business owner are not done in an open and transparent manner or if
they are found to be one-sided deals. If all transactions
Q Acannot be doing everything on his own. between family members and family companies are done
How was it like for you to take over the openly, there is no conflict.
family business? Being a public listed company, transparent transactions
I'm not the person to got it off the
ground. I always happily describe Qare paramount, so it's important to not try your luck.
myself as third generation in relation Do you have succession plans in place, such
to the business. My forefathers, including my grandfather, as handing the reins over to your children,
uncles and father grew it over 75 years. It was one that or nurture the next generation to take on
started from very little. C-suite roles?
In the case of PCB, my siblings and relative had agreed to A I don't have a very large family. A
a management buyout, allowing me to be the sole leader daughter who is married and living
to drive the company forward. It wasn't easy to say the in the UK. She is 39. She made it
least, as many business owners can tell you, but I'm glad clear that she is not interested in the business, instead she
that I managed to do it. took up the challenge of being a mother to three kids. I'm
proud to say she's doing it well.
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Cover Personality
My son, who just turn 28, and he is in company in an TRIBE
executive position, learning his ropes, being mentored
and coached by Jeffrey Chew (Group CEO and Executive Trust, Respect, Integrity,
Director). When he's ready, presumably the board might Bravery and Energy.
say, 'you're ready and take on a more senior role'.
Perhaps eventually becoming deputy CEO and group Q What are the important attributes that a
CEO. But this will take time. With the responsibilities chairman should possess to discharge his
we have in mind for him, he might need to go for some role?
executive programmes, at the leading business schools A I don't want to paint myself as a
such as Harvard or Wharton. He will have to find time to good chairman but I strive to be a
do so. With mobile technology, you're still in touch with responsible one. So I would say that
there are three key attributes. First, leadership skills to
Q Aeveryone. enable oneself to run an effective board and to manage the
Can you share with us your role as Chairman relationship between the board, group CEO and other
and Executive Director of PCB? stakeholders.
I have two distinct roles. As Secondly having a good understanding of the business,
Executive Director, I work closely armed with a clear vision for the future so one can lead the
with the group CEO, in many ways, board in a meaningful discussion, raise the right questions
mentoring him, giving insights as to what I feel what and challenge the CEO and managers to do better.
he has to do or what he has done but mostly constant Thirdly, one has to be committed. Devoting the
dialogue to bounce our ideas off each other. appropriate level of time to this role, develop an empathy
I'm also advising on matters relating to acquisitions of with the business and engage with the people and issues
landbanks, code of corporate governance, and selection the organisation has.
of, not just for directors but executive senior leaders and Personally, I also carry with me a set of values and guiding
C-suite talents. principles and I apply those to myself and my colleagues.
As Chairman, I remain independent of the day-to-day In our corporation, the guiding principles are known as
operation. Here, I perform roles to ensure the company is TRIBE – Trust, Respect, Integrity, Bravery and Energy. It
future proof and future focused while remaining aligned is easily understood but yet not easy to carry out. People
to our vision. I ensure a balance between achieving profits
and corporate governance – that's the responsibility to Q Awith similar values will be a good fit for the company.
all stakeholders. I try to harness the best from the board What are the special attributes that you
and rejuvenate the board with new members of diverse would like to see in your directors?
talents. All these keep me busy and alert, although I It boils down to surrounding yourself
consider myself ¾ retired. with good people, especially at the
board level. You don't want to have
As Chairman, I remain a board filled with family members or old schoolmates.
independent of the day-to-day Our criteria and assessment was drawn up by our Senior
operation. Here, I perform roles Independent Non-Executive Director, Datuk Seri Michael
to ensure the company is future Yam Kong Choy.
proof and future focused while
remaining aligned to our vision.
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Cover Personality
He also chairs the Nomination Committee. He's a very Diverse composition
experienced corporate man and has put into place a of a board is very
framework to assist in assessment and selection of new important. You'll need
board members. Assessment is done by each board to have people from
member but I do take a leading role. different qualifications
We now have nine members – two executive directors and experiences.
and 7 independent ones. For a board to be effective, you
need to give a lot of attention and respect to what their Q AIn PCB, how was the evolution of the
views are. They have impose a lot of discipline on myself board's responsibilities over the years?
and colleagues to come prepared for the meetings. On top It's amazing how things have
of that, every independent director should understand changed over the years. I have been
his or her role and function. It's a must to have basic a Director for a long time since the
knowledge about the requirements of the Bursa listing, days of my uncles. Over the years, the board has agreed
Securities Commission guidelines, and code of corporate to stop micromanaging.
governance.
It's vital to understand the business and actively We no longer want the management to come to us
participate in board discussions, raise relevant questions with every little decision. I do see many companies still
and challenge to the management in an albeit, fair operating that way, but how does the board find time?
and objective manner to protect the interest of all Now the board only convenes over major acquisitions.
stakeholders. The management will have to provide directors with
I hope to see the push toward the sustainability issues enough time and information to converse about pros
of environmental, social and governance. They need to and cons of a particular transaction.
comprehend the treatment of risk and its mitigation,
true understanding of the organisation's vision, mission, Of course, this setup is not something to be prescribed
core values and corporate culture. Diverse composition Qto everyone.
of a board is very important. You'll need to have people Last year, PCB has two new directors
joining the board. Would you be able to
Qfrom different qualifications and experiences. tell us a little about them?
Are there any corporate governance A We are very happy to have two
requirements or listing rule changes that independent non-executive
you wish to see introduced or, if existing, directors joining us. One is Quah
changed? Poh Keat who joined the Board of Paramount on 8 June
A The simple answer is no. It's not 2016. Quah was a partner of KPMG since October
so much about the adherence 1982 and was appointed Senior Partner in October
but more of the spirit of business 2000 until 30 September 2007. He is experienced in
organisation applying itself to the listing requirements auditing, tax and insolvency practices and has worked
and code of corporate governance. What we have is in Malaysia and the UK; his field of expertise include
adequate. To introduce more rules, the companies will restructuring, demergers and privatisation.
need armies of lawyers.
The principles and recommendations of the Malaysian The other is Tan Sri James Foong whom we welcomed
Code on Corporate Governance are comprehensive on 25 May 2016. He was made a Managing Judge of the
enough to ensure protection of minority shareholders’ Civil Division of the High Court at Kuala Lumpur and
interest and transparency to investors. of the High Court and Subordinate Courts in the State
Paramount constantly aligns our corporate governance of Penang. He retired from the Malaysian Judiciary on
framework as far as practicable to meet these 25 February 2012.
recommendations. Our efforts have come to bear when
we won the Merit Award for Best AGM in 2016 and
the Merit Award for Top Corporate Governance and
Performance in 2015 from the Minority Shareholder
Watchdog Group.
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Cover Personality
We place great emphasis on talent management consistent with
our HR strategy to drive talent and leadership development.
Q AIn your long years in PCB, what are the Q What do you think are going to be the three
failures you have faced? major challenges that your group or listed
One of my failures is that is, as companies will face in 2017?
a company, we were not able to A Three major challenges that public
understand how serious the situation listed companies will face this year
after the Asian Financial Crisis, where bank interest is due to slow economic growth.
rates were at a record high and people couldn't afford The World Bank expects Malaysia’s economy to grow
mortgages. As a developer, we were unable to sell our only slightly faster at 4.3% this year from the expected
products, leading to a stockpile of unsold properties. 4.2% growth last year, as global economic growth and
commodity prices remain subdued.
Luckily, we didn't fail that badly that we can't undo the The country continues to face headwinds in the form
stockpile. We took steps to ensure the stockpile properties of rising cost of living, depreciation of the ringgit and
were restored to their original beauty so eventually buyers deterioration of investor confidence.
Brain drain – an exodus of talent is not the only problem
Qcame back over a stretch of two to three years. that our country faces; Malaysia also faces a problem in
Are there any particular policies that your
company has introduced towards staff Q Adelivering required talent.
welfare that you are particularly proud of? Have you thought about retirement?
A Opportunities for advancement Paramount is one of the few listed
for staff of all levels through company to have an age requirement
the implementation of a talent for its board members. We decided
management programmes to develop our people to that the mandatory retirement age of directors is at 75,
succeed to leadership roles. We place great emphasis on which we deliberated in our director's retreat in Columbo
talent management consistent with our HR strategy to last September.
drive talent and leadership development. I don't want to be bothered with Paramount when I hit
75. I hope by then my son would have gained enough
The next thing we are doing right now is in the area of experience and a good fit to assume bigger responsibilities
instituting the accident prevention and disease prevention
movement. There is a benefit for Paramount here if these Q Aand post.
things can reduce staff absenteeism due to illness and How do you divide time between family,
Qinjury. leisure and work?
Family businesses are constantly pressured I work on an annual calendar,
to grow but often afraid to go for a Bursa committing time to travel with
listing due to its stringent rules. What my wife, have holidays with family
would be your advice to them? members and look after spiritual aspects of my life.
Monday evenings I have a Bible study session. Spiritual
A Take your time. Start by getting a life is very important to me and I apply it in my business.
board of advisors, external help to For example, in mid-January, Paramount distributed
go over the things that the company bonus and increment letters to the employees. Since my
might be apprehensive about, understanding the cost of grandfather's time, the business owner would personally
having structure and system to adhere to requirements set hand out these letters. During that session, I expressed
by Bursa Malaysia and the Securities Commission. thanks to God and even read a verse from the Bible in the
glory of Him. Again, it is not for everyone. It's not easy to
But with that said, the opportunities outweigh the initial be in touch with spirituality. BV
challenges. Through this exercise, it gives your employees
a sense of belonging. After a listing, they now have a
responsibility to the stakeholders and not just the family
that own the business.
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Feature
Technology as a Risk:
Cybercrime & Data Privacy
By Leesa Soulodre
$81.3bn - the revenues lost to cyber attacks in the Asia-Pacific region
in the 12 months to September 2015 out of a global total of $315bn
International Business Report (IBR) Grant Thornton.
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Feature
Over recent weeks, large-scale ATM heists have taken In many instances, the drop in stock value is temporary, in
place in Japan, Taiwan, Malaysia, and Thailand. other cases it is permanent. It always depends on how the
Couple that with SWIFT targeted attacks and other companies handle the aftermath of crisis and commit to
significant Cybercrimes reported in Bangladesh, the fixing the underlying business issues, rather than engaging
Philippines, Singapore, Taiwan, Thailand and Vietnam, in only Public Relations exercises. Toyota, for example,
it is no surprise that Board Directors, Governments and commenced a global quality improvement initiative that
our Company Regulators in Asia are taking it seriously. involved cultural and process changes at every level of
Last week enforcement officials from across the region, the company. Sony executed a 3-year innovation focused
met in Hong Kong to discuss how to tackle the growing turnaround and recovery program after a state attack
cybercrime threat-scape. on its networks. Today it leads globally as the #1 Tech
As part of one's fiduciary responsibilities, Boards are Company in the 2016 Reputation Institute RepTrak
responsible for shaping the company’s framework for study, a significant achievement given the central brand
accountability, control, and risk management. This means architecture of the firm that puts the entire Company at
ensuring effective cyber-risk resilience and governance, risk in the event of a reputational risk failure.
data privacy and protection, compliance and reputation According to John Carlin, assistant attorney general at
risk management and stakeholder engagement. These the Justice Department for national security, "the (Sony)
activities underpin the board's accountability and ordeal was seen as a wake-up call to boardrooms and
leadership and demonstrate efforts in building and corner offices around the country" and "did more to raise
protecting the company's reputational equity. national security cyber-awareness than any other single
Severe erosion of a Company's shareholder value is event."
common during reputational crises. During its recent Only one month ago, Yahoo came clean about its data
crisis triggered by the sudden acceleration issue, Toyota’s breach, the largest of its size in corporate history. It
stock price dropped by as much as 24%, wiping out about resulted in a $1B discount from Verizon on its acquisition
US$33 billion in shareholder value, close to the total price and a further $1B to be set aside in capital reserves
market value of Time Warner. In its battle with the US for fines. Significant given the revenues of just over
government in the aftermath of the 2008–09 financial $4.9B. This was in stark contrast to the lack of significant
crisis, Goldman Sachs lost US$24 billion of its market financial materiality for other corporations such as Sony,
capitalisation, a 26% drop in share price that exceeded Home Depot, and Target.
the entire value of American Express. During the BP oil With the new Global Data Privacy Regulations coming
spill disaster in the Gulf of Mexico, BP’s stock was almost into force in 2018, accountability for both the controllers
cut in half, the equivalent of about US$90 billion in and processors of personal data are set to be enforced with
shareholder value, more than the market value of Procter stiff penalties. Current numbers being discussed by the
& Gamble.
With the new Global Data Privacy
Regulations coming into force in 2018,
accountability for both the controllers
and processors of personal data are
set to be enforced with stiff penalties.
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Feature
Company record losses to cyber attacks
Sony Pictures Ashley Madison The Home Depot TJX Companies Heartland Payment Systems
47,000 37 million 56 million 100 million 130 million
2014 2015 2014 2007 2009
Regulators are 40,000 euros fine for the loss of every 1 In the event of gross misconduct
record. That would be a sizeable penalty if we consider or negligence, it is reported now
the # records lost by the following companies.
In Asia, Grant Thornton reports that a successful cyber-
that many D&O insurers simplyattack will have a significant impact on the organisation
with an estimated cost of around 1.2% of business refuse cover to Directors,
revenues. leaving them exposed to large
These events and others have made Boards all too
conscious of both the related operational risks, strategic
sfrcoamleucplsaestsinavcetsiotnorlsa.wsuitsriomiwskpns1acau4tnndt5lhimreemeBipctoaueimydtlalptpiiaooenrnnsyao'lsnrPails&klsiLat.bhTialihttiycsaiinns hcaoauvleipmlaeid3tpeowd6teiM0ltnihaytbmitsaihlplieittaiolyrcleion
Yahoo
500 million
entity. In 2th0e1e4vent of gross misconduct or neglMigaenyc3e,1 Sep 22
it is reported now that many D&O insurers simply
refuse cover to Directors, leaving them exposed to large
scale class action lawsuits from upset investors and as
we saw in the Sony case, upset employees. that will impact stakeholders perception
of a company and their behaviour. It can
also be triggered by a primary risk or a
Reputation risk is defined as the risk of a negative reputational failure.
P&L event caused by adverse reactions of stakeholders
FireEye Technologies reports that this
challenge is made even worse by the fact
that hackers can be lurking in the system
before discovery up to 520 days in Asia, against
a global industry average of only 146 days.
Cyberattacks increasingly threaten the very
reputation of a firm. But unfortunately, reputation
risk management programs are largely immature. Each
organisation has its own interpretation of Basel III, and
every financial institution has a bespoke approach. In a
stark industry context of needing to rapidly reengineer
boardview
Sony Pictures Ashley Madison The Home Dep1o2t TJX Companies Heartland Payment Systems
47,000 37 million 56 millioFenature 100 million 130 million
2014 2007
2014 2015 2009
eBay Myspace Yahoo
145 million 360 million 500 million
2014 May 31 Sep 22
for efficiencies, this is a challenge that we should be able Are data privacy laws clear? What challenges does cloud
to address together. technology add to the mix?
In addition, cyber resilience, and cyber governance are What can be done to minimize the risk of data breaches as a
all often pushed to the wayside, with an overload of result of human error?
"200 financial services industry regulatory updates a Asia is highly disintermediated. The insurance market
day worldwide and over 25% of them in Asia". In fact, is a great example. You have your own directly owned
Sanjeev Chatrath, Thomson Reuters Managing Director entities, your joint ventures ("JV"), your agents, brokers
and Regional Head of Asia Finance and Risk, estimates and licensees. How do you control the data that is stored
that this volume averages to 1 regulatory update for the across that network and protect your organisation?
industry every 10 minutes. This is even more alarming Ultimately, people and not technology were the financial
when the average time spent each week by Compliance sector's weakest link.
executives on regulatory updates was reported as only 1 From a compliance perspective, corporates are mandating
hour (Thomson Reuters, the Cost of Compliance). [cyber security] compliance because they do not want to
At the PAN Asian Regulatory Summit 2016, I was open themselves up to risk. Big corporations are exposed
joined by my colleagues in one of the panel discussion: to more risks and regulations. Yet, those down the food
Moderator: James Mirfin, Managing Director, North Asia, chain must also comply. BV
Thomson Reuters; my former TruSecure (Cybertrust) About the Author
colleague, Jeremy Pizzala, Partner, Financial Services,
Cyber Security, EY; Dicky Wong, from Hong Kong Leesa Soulodre is a strategic advisor who has
Police; and Shih Hsien Lim, Head, Information Security, consulted to more than 400 multinationals in 19
Hong Kong Jockey Club. sectors over the past 20 years across Europe, Asia
The following 5 questions were answered: Pacific and the Americas. She is a faculty member of
Are organizations structured to effectively deal with cyber- Malaysian Directors Academy (MINDA).
crime? Where will cyber-crime prevention responsibilities lie
in the future? RELEVENT MINDA PROGRAMMES
How should we be educating the board on cyber crime risks
and is it getting on top of their agenda? • CDAP: Cybersecurity @ 19 Sept 2017, KL
How prepared are banks to deal with cyber crime threats in
reality?
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13
Feature
Wells Fargo Misread
its Own Culture
By D. Charles Galunic
Corporate leaders are responsible for both the company
culture the firm proclaims and that which really exists.
There cannot be anyone remotely interested in business being created by employees in the name of retail clients
and management who has not heard of the troubles at without their knowledge.
Wells Fargo. This is the world’s largest retail bank – a This would not make the news if it were just a matter
bank for “main” street and a darling of the banking sector of a few individuals, but in this case it was done some
– which, having emerged more or less unscathed from the two million times, by over 5000 employees over a period
2008 financial disaster, watched on as “Wall street” banks of several years. Wells Fargo leaders argued that this
crumbled. represented a very small proportion (around two percent)
Last year, the bank’s leader (John Stumpf ) was named of their workforce and had a minor impact on revenues. It
“CEO of the year” by Morningstar. This year he has been was, they said, a bad-apple problem, not a cultural issue,
forced to resign amid widespread headline stories and impacting employees “at the lower end of the performance
revelations that false bank and credit card accounts were scale”. The discovery does however, have an impact on the
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Feature
fundamental thing that banks offer, trust. And it is being it is important to remember
taken seriously by regulators and the media. that business leaders don’t
While Wells Fargo insists its employees’ actions did not oversee just the culture
reflect the “Wells Fargo culture” - a claim the Senate they wish they had; they are
committee clearly wasn’t buying - the practice was spread responsible for the culture
widely enough, and continued for long enough, to be that actually exists within
considered a “cultural” problem. their organisation, whether
The scandal presents a good opportunity to think about good, bad, or ugly.
corporate culture and the role of leadership. I believe
Wells Fargo’s reaction to date points to some misplaced “black sheep”, or struggling adolescent, in a family being
ideas about what organisational culture is and who is renounced because they don’t “do” the family’s values.
responsible for it. Corporations, unlike families can, of course, sanction and
release those who struggle with performance, but while
Espousing a value doesn’t make it a employees are under the corporate roof they are part of
culture the organisation and its culture.
First up, it is important to remember that business leaders Cultures can change
don’t oversee just the culture they wish they had; they are
responsible for the culture that actually exists within their One misunderstanding about organisational culture is
organisation, whether good, bad, or ugly. that “it’s impossible to change!” A firm’s culture is not
We are familiar with open displays of corporate values monolithic, in the sense of being the same everywhere,
- on websites, investor relations documents, coffee cups as noted above, or in the sense of being stable. Cultures
etc. There is no harm and even some potential good in do change, even if it’s slow and imperceptible change,
leaders espousing their values, making it clear what sort as people experiment with new actions and meanings.
of behaviour they are trying to encourage and, hopefully, Moreover, cultures can certainly drift away from intended
demonstrating how this is relevant for the organisation’s meanings and values. Coping with and maintaining
strategy. But these “wish lists” are harmful if they allow organisational culture is not something that happens in
complacency and the mistaken belief that they are accurate cycles (like products). It’s something you should do all
labels for how things really work within the organisation. the time.
By effectively saying “but this behaviour is not the Wells
Fargo culture,” what the besieged executives are really
saying is, “this is not the culture we want to have”, which
is not the same thing as the culture that actually exists,
and for which the firm’s leaders are, in fact, responsible.
It’s a little like the clichéd family joke, where a parent
claims ownership of little Taylor only when s/he is a well-
behaved kid (and pushes it to the other parent when s/
he is not). This is light family humour, as no one really
believes responsibility can be transferred. It’s the same in
companies, whether good or bad, it’s all yours.
Employees are all part of the corporate
“family”
It is also “all yours” up and down the performance curve.
We don’t lead and manage only the top performers. Wells
Fargo seemed to suggest that it was only the people who
struggled with performance that were doing these things.
But I assume these individuals all had Wells Fargo contracts
and were bona fide members of the company at the time
these problems occurred. Again, this is a little like the
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Feature
The links between structures and culture Time needs to be spent analysing
how things really work around
Reports are suggesting that Wells Fargo’s dodgy “sales” their organisation. The challenge
practices stemmed largely from the steep sales targets and here may stem from the enormous
job security implications for underperformance. external pressure and scrutiny
that business leaders face.
Employees live in a context where “concrete” tools such
as sales targets carry meaning. They can be interpreted in About the Author
different, sometimes undesirable, ways, which becomes a
motivating factor if they see enough colleagues adopting Charles Galunic is a professor of Organisational
similar, sometimes inadmissible, practices, (in the case of Behaviour and The Aviva Chaired Professor of
Wells Fargo this was in the thousands). The lesson here Leadership and Responsibility at INSEAD.
is that leaders need to be part ethnographers, in that This article is republished courtesy of INSEAD Knowledge.
they need to know something about how management Copyright 2016.
structures unfold into meanings and associations.
RELEVENT MINDA PROGRAMMES
The challenge to inward thinking
• Building High Performance Directors 2.0:
Too many senior business leaders understand well the Dynamic Board Stewardship (DiBS)
cultures that they want and should have, but are less clued @ 30 Oct - 2 Nov 2017, Osaka, Japan
in about the cultures that really exist within their firm.
Time needs to be spent analysing how things really work
around their organisation. The challenge here may stem
from the enormous external pressure and scrutiny that
business leaders face (from investors, analysts, regulators,
customers and media) drawing their attention outside the
organisation and away from the workings of the firm.
There is a strange irony in that, while corporations today
probably need employees to spend more time looking
outward, we need our business leaders to gain a better
view of what is happening on the inside. BV
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16
Feature
2016 Global Board
of Directors Survey
By Spencer Stuart & Women Corporate Directors Foundation
The growing demands on corporate boards are transforming
boardrooms globally, with directors taking on a more strategic,
dynamic and responsive role to help steer their companies through a
hypercompetitive and volatile business environment. Economic and
political uncertainties make long-term planning more difficult.
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Feature
The proliferation of cyber attacks companies and among directors from 61%
— and their consequences for different regions in five key areas: Public
business in financial losses and • Political and economical landscape Company
reputational damage — increases • Company Strategy and risks
the scope of risk oversight. A rise in • Board governance and effectiveness 59%
institutional and activist shareholder • Board diversity and quotas Private
activity requires boards to identify • Director identification and Company
vulnerabilities in board renewal and Say global
performance and, in some cases, recruitment growth prospects
establish protocols for engagement. are uncertain
And all of these demands have pushed Key Findings
issues around board composition and
diversity to the fore, as boards cannot Political and Economic
afford to have directors around the Landscape: Uncertainty
table who aren’t delivering value. dominates boardroom outlook.
In this context, Spencer Stuart, Our survey finds that directors
the Women Corporate Directors around the world are uncertain
(WCD) Foundation, Professor Boris about global growth prospects,
Groysberg and doctoral candidate with directors in North America
Yo-Jud Cheng of Harvard Business and Western Europe least confident
School and researcher Deborah Bell about the prospects for growth.
partnered together on the 2016 Sixty-three percent of directors in
Global Board of Directors Survey, these regions see uncertain economic
one of the most comprehensive conditions, compared with 36% in
surveys of corporate directors around Asia and 40% in Africa.
the world. Only 2% of directors across all
The survey explores in depth how regions predict a period of strong
boards think and operate. It captures global growth over the next three
in detail the governance practices, years, while 16% expect a global
strategic priorities and views on board slowdown.
effectiveness of corporate directors “This pessimism about growth is one
around the world. It also confirmed of the most surprising findings of
many of our observations from our survey,” said Boris Groysberg of
working with boards. The economy Harvard Business School. “It seems
is top of mind, and many directors that the market volatility and low
are uncertain about economic prospects for growth as well as the
prospects and not seeing growth unpredictable economic outlook are
in the future. At the same time, what keep board members awake at
directors are responding proactively night.”
to the many new demands they face, More than one-third of directors
looking for opportunities to enhance of companies headquartered in
composition and improve board Asia and roughly one-quarter of
performance. directors of companies in Australia/
Findings compare and contrast the New Zealand expect relatively faster
views between male and female growth in emerging economies
corporate board directors, and versus developed countries.
highlight similarities and differences
between public and private
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Feature
Political and Economic Activist Investors
Landscape: Economy, Cybersecurity
regulations and cybersecurity Enterprise
top issues for directors. Regulatory
Across all industries and regions, Reputational
directors rank the economy and Supply Chain
the regulatory environment as the
political issues most relevant to them. Men
Women
Cybersecurity is an increasingly
important issue in many regions. Men
More than one-third of directors of Women
companies in Australia/New Zealand,
North America and Western Europe Scale: 1 = None; 2 = Little; 3 = Moderate; 4 = Great; 5 = Very Great
say cybersecurity is a top issue.
36% of risk. However, directors of private
“Cybersecurity continues to be a Men companies systematically rank their
leading issue on the agenda from boards as being less prepared versus
a regulatory, reputational and 47% public company boards when it comes
contingency standpoint,” says Julie Women to such risks.
Hembrock Daum, head of Spencer Nearly across the board, female directors
Stuart’s North American Board Cite cybersecurity report a higher level of concern about
Practice. “We see boards considering as a top various risks to a company than their
a number of different approaches male peers — from concerns about
to getting smart about the broader political issue activist investors and cybersecurity to
impact of technology on the business. regulatory risk and the supply chain.
In certain cases they have added However, female directors also feel that
a director with a strong digital or their companies have a higher level of
security background. However, the readiness to address these risks than do
board should not isolate cybersecurity their male cohorts.
responsibility with just this one Susan Stautberg, chairman and CEO
board member, but continue to view of the WCD Foundation, believes that
cybersecurity as a full board priority.” women directors may be educating
themselves more about the potential
Political instability is a concern risks: “We believe that women in
in several regions. In Central and particular bring a real thirst for
South America, one-half of directors knowledge and curiosity to their board
cite political instability as an issue. service, and this includes getting up-to-
Corporate tax rates are an issue speed on what the real risks are to an
particularly in North America. organisation. All good directors do this,
but we think being relatively new to the
Company Risks: Women board- room can create a greater sense
directors report higher concerns of urgency to learn.”
about risk than male directors.
Directors globally express the
most concern about regulatory
and reputational risks, followed
by cybersecurity, and less about
activist investors and supply chain
risks. In general, directors report
that their companies are prepared
to handle the most important risks,
with companies’ level of readiness
matching the most concerning areas
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Feature
Strategy: Top challenges differ for public and Perceived challenges also differ somewhat by industry
private companies. and region, with the regulatory environment being
Talent, regulations, global and domestic competition, and more concerning for companies in the energy/utilities,
innovation are seen by directors as the top impediments financials/professional services and healthcare industries,
to achieving their companies’ strategic objectives. How and in Asia, Australia/New Zealand, North America
those challenges rank specifically depends in part on and Western Europe. Global competitive threats are the
whether directors are serving public or private companies. leading concern for companies in the industrials and
materials sectors, and in Western Europe.
Nearly half of private company directors (versus 38% of Interestingly, while cybersecurity is viewed as an important
public company directors) rate attracting and retaining risk, few directors consider it a major challenge to achieving
talent as a key challenge to achieve their company’s strategic strategic objectives. Similarly, activist shareholders,
objectives. This is followed by domestic competitive compensation, cost of commodities and supply chain risk
threats, the regulatory environment, innovation and global are not perceived as challenges to achieving strategic goals.
competitive threats. Among public companies, 43% of
directors (versus 32% of private company directors) say Talent, regulations, global and
the regulatory environment is a top challenge, followed by domestic competition, and innovation
attracting and retaining talent, global competitive threats, are seen by directors as the top
innovation and domestic competitive threats. impediments to achieving their
companies’ strategic objectives.
“This was interesting because we do see in larger, more
established public companies a greater maturity in their
HR processes and deeper resources invested in talent
management and development,” says Daum.
“Identifying and recruiting individuals who fit the culture,
bring impact to the organisation and endure is a high
priority for nearly all companies. However, many private
companies, which tend to be smaller and have less brand
awareness as a whole, often have less robust HR structures
to attract the level of talent across the organisation.”
43 %Regulatory 48 %Attracting and
Environment Retaining Talent
38%Attracting and 33%Domestic Competitive
Retaining Talent Threats
35% 32%Global Competitive Regulatory
Threats Environment
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20
Feature
39% Boardroom Grades: Directors However, boards in North America
Public consider boards weaker in are more likely to have a mandatory
people-related processes. retirement age than boards in Western
30%Private On average, directors rate their Europe (34% versus 18%). We also
board’s overall performance as being see a stark contrast between public and
Boards with slightly above average (3.7 out of 5). private companies in both term limits
term limits Directors see their boards as having (39% versus 30%) and mandatory
the strongest processes related to retirement ages (33% versus 12%).
68% staying current on the company and While these tools for triggering
Women the industry, compliance, financial director turnover generally have not
planning and board composition, been widely adopted, the survey
56% and weakest in cybersecurity, the indicates that directors favour
Men evaluation of individual directors, adoption of such mechanisms. Sixty
CEO succession planning and HR/ percent of directors think that boards
Believe directors talent management. should have mandatory term limits for
should have directors, and 45% think that there
term limits “These ratings underscore directors’ should be a mandatory retirement
views that attracting and retaining age. Even in private companies, which
top talent is a common challenge, are considerably less likely to adopt
and underline the need for these these practices today, directors shared
HR competencies on boards,” says similar opinions as compared to their
Stautberg. Harvard Business School counterparts in public companies.
doctoral candidate Yo-Jud Cheng Female directors even more strongly
adds, “Despite the fact that directors support triggers for turnover; 68%
recognize their weaknesses in these (versus 56% of men) favour director
areas, boards continue to prioritize term limits and 57% (versus 39% of
more conventional areas of expertise, men) support mandatory retirement
such as industry knowledge and ages.
auditing, in their appointments of “It was encouraging to see the
new directors.” majority of respondents in favour
of retirement ages and term limits.
Public company directors rate their Turnover among S&P 500 companies
overall board performance slightly has trended at 5% to 7% — roughly
higher than private company directors 300 to 350 seats a year. Boards need
(3.8 versus 3.4) and give them- selves tools they can use to ensure that new
higher marks for creating effective perspectives and thinking are regularly
board structures, evaluation of being brought to the boardroom,” says
individual directors, cybersecurity Daum. “This isn’t just an issue tied to
and compliance. We also see some activist shareholders, but something
variation across regions. institutional shareholders are asking
about as well: what are boards doing
Board Turnover: Directors — to ensure independent and fresh
especially women — favor tools thinking?”
to trigger change. Not surprisingly, 43% of directors
A little more than one-third of boards believe that a director loses his or her
have term limits for directors, averaging independence after about 10 years.
six years, while approximately one- Respondents from North America are
quarter of boards have a mandatory less likely to tie director independence
retirement age, averaging 72 years. to years served, with only one-
Boards in Western third agreeing that a director loses
independence after a certain amount
Europe are most likely to have term of time on the board.
limits, and boards in North America
are least likely to set term limits.
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Feature
Diversity is not a top priority 16% 36% divide on why this is. Male directors,
in board recruiting especially older respondents,
7% report the “lack of qualified female
There is a lack of qualified 36% candidates,” while women directors
female director candidates most often cite the fact that diversity
is not a priority in board recruiting
Board Diversity: Greater directors) and smallest in the IT/ and that traditional networks tend
independence doesn’t always telecom sector (7.5 directors). to be male-dominated. Younger male
drive greater diversity. Female representation is highest directors surveyed (those 55 and
Public companies represented in (20% or more) in the consumer younger) are inclined to agree with
the survey have larger boards than staples, financial services/professional women that traditional networks
private companies — on average services and consumer discretionary tend to be male-dominated. “Men in
8.9 directors versus 7.6 — and a sectors, and lowest in IT/telecom the younger generation, I think, just
larger representation of independent (13%). see their qualified female colleagues
directors, 74% versus 54%. Yet, out there, but know that the
public and private company Looking across regions, board size is traditional board networks still tend
boards are similar in terms of the smallest in Australia/New Zealand, to be male,” says Stautberg. “It’s often
representation of women, minorities where boards average 6.7 members, hard to see an informal ‘network’ if
and new directors. On average, 18% as compared to the global average of you are in the middle of it, but you
of board members are women, 7% are 8.5 members. Boards in Australia/ can see it very clearly when you’re on
ethnic minorities and 13% have been New Zealand and North America the outside.”
appointed in the past 12 months. have the highest proportion of Boardroom Diversity: Quotas
independent directors, and boards not supported overall.
“This finding was very interesting. in Asia have the lowest proportion. Nearly 75% of surveyed directors do
There has been much debate about Female representation is lowest in not personally support boardroom
the use and effectiveness of quotas. Central and South America and Asia. diversity quotas, but support for
To see the relative parity of diversity quotas varies significantly by gender
among public and private companies Boardroom Diversity: Why and, to a lesser degree, by age. Forty-
reinforces that the tone needs isn’t the number of women on nine percent of female directors
to come from the top regarding boards increasing? support diversity quotas, but only
bringing a fresh, diverse perspective As the percentage of women on 9% of male directors do. Older
representative of the company’s boards remains stagnant, there is women are less likely to favour
stakeholders and interests,” says both a gender divide and a generation quotas than younger women; 67% of
Daum. Groysberg adds, female directors ages 55 and younger
9Personally% personally support boardroom
“Although we are hearing more quotas, compared with 36% of
talk about the importance of support Men female directors over 55 (the majority
diversity from boards, it’s not quotas of male directors, of any age, do not
necessarily translating into numbers. support quotas). Female directors
Unfortunately, we haven’t seen as also are more likely to be in favour
much progress as we were hoping for
compared to our past survey on the 49%
diversity of boards.” Women
Boards are largest in the financials/
professional services sector (9.1
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Feature
39% increasing board diversity. the highest level, incorporating
Women diverse perspectives, aligning with
1% Boardroom Diversity: Search shareholder interests and setting
Men firms have been successful in a positive tone at the top for the
Gender was a expanding the talent pool of organisation.
significant factor qualified female directors. Yet our research has revealed a gap
in board Directors take a variety of pathways between best practice and reality,
appointment to the boardroom: in roughly equal especially in areas such as board
measures, directors were known to the diversity, HR/talent management,
of government regulatory agencies board or another director, recruited CEO succession planning and
requiring boards to disclose specific by a search firm or known by the director evaluations. But the study
practices/steps being taken to seat CEO. Public company directors are provides hope that boards will
diverse candidates (43% versus 14% more likely to be recruited by an make progress, as directors support
of male directors). If quotas aren’t executive search firm than private practices that can help promote
the answer, what do directors think company directors, while private change. Future research is needed to
would increase board diversity? Male company directors are more likely track progress on these fronts and to
and female directors agree that having to have been appointed by a major study the impact of measures such
board leadership that champions shareholder. as quotas and diversity on board
board diversity is the most effective The survey highlights gender performance.
way to build diverse corporate boards. differences, as well, in the paths to Amid the many challenges
Men feel more strongly than women the boardroom. Female directors confronting corporations — and
that efforts to develop a pipeline of are more likely than their male the growing expectations on
diverse board candidates through counterparts to have been recruited corporate boards — directors must
director advocacy, mentorship and by an executive search firm, while be thoughtful about defining the
training is an effective way to increase male directors are more likely to skill sets needed around the board
diversity. have been appointed by a major table and diligent in recruiting the
Directors as a whole agree that shareholder. “Search firms may be right directors, planning for CEO
shareholder pressure and board able to open doors that networking succession and evaluating their own
targets are less effective tools for opportunities may not have been performance. In this way, they will be
doing until relatively recently, at best positioned to contribute at the
least for women,” says Stautberg. high levels which they are demanding
“Building up networks and getting of themselves, and to which others
known is something that women are holding them accountable. BV
directors are engaging in much more
actively now.” And, indeed, 39% This report is published by Spencer Stuart
of female directors report that their together with Women Corporate Directors
gender was a significant factor in Foundation (WCD) in April, 2016
their board appointment, versus 1%
of men. RELEVENT MINDA
PROGRAMMES
Conclusion
• CDAP: Strategy and Risk
Corporate boards face no shortage @ 18 & 19 Jul, KL
of challenges – from economic • CDAP: Cybersecurity
uncertainty to strategic and @ 19 Sept 2017, KL
competitive shifts to a dynamic set • CDAP: Innovation
of risks. Investor attention to board @ 7 & 8 Nov 2017, KL
performance and governance has
also escalated, and many boards
are holding themselves to higher
standards. Directors want to ensure
that their boards contribute at
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23
Book Review
Taking Back the Boardroom
Thriving as a 21st-Century Director, 2nd Edition
By Phillip H Phan Companies like Enron, WorldCom, and Siemens have
defined the dark side of the corporate world in the
21st century. This timely book is designed to address
the diverse requirements of directors and heightened
investor awareness, with an intelligent and comprehensive
presentation of the structure and practice of boardroom
management.
The second edition takes account of recent developments
like the Sarbanes-Oxley Act of 2002, codes of conduct
promulgated by non-government organisations and
institutional investors, debates over the audit committee's
roles and responsibilities, and new cases illustrating the
problems facing directors as they negotiate the twin
challenges of global competition and social responsibility.
It walks readers through the legal and philosophical
theories of corporate governance, translates these into
practical implications for boardroom practices, and
guides managers and directors on how to build their own
frameworks for considering ethical and strategic issues
that routinely appear in the boardroom. The practical
approach is complemented by numerous illustrations and
cases at the end of each chapter for discussion and self-
appraisal.
About The Author
Phillip H Phan is the Warren H Bruggeman '46 and Pauline
Urban Bruggeman Distinguished Professor of Management at
the Lally School of Management & Technology at Rensselaer
Polytechnic Institute. He was the 2004 and 2005 Haniel Foundation
Distinguished Visiting Professor at Humboldt University in Berlin
and is the 2006/2007 Bosch Public Policy Fellow at the American
Academy in Berlin. During summers, he is Visiting Research
Professor at Singapore Management University.
Phil has published in such journals as the Academy of Management
Journal, Asia Pacific Journal of Management, Corporate Governance,
European Management Journal, Journal of Business Venturing,
Journal of Management, Research Policy, IEEE Engineering
Management and Small Business Economics. He serves on the
editorial review board of the Academy of Management Journal, and
is Associate Editor for the Journal of Business Venturing, Journal of
Financial Stability, and Journal of Technology Transfer.
He has consulted for the World Bank, OECD, Singapore Institute of
Directors, U.S. Small Business Administration, and such companies
as HP, IBM, Ernst & Young, Pillsbury, Agilent, SK Group (Korea),
SanomaWSOY (Finland), Singapore Airlines, PACCAR (US), and
technology venture capital firms in Toronto and New York.
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24
Feature
Effective
Anti-Bribery and
Anti-Corruption
Compliance Programs
By Nate Bush
Compliance with anti-bribery and anti-corruption (ABAC) laws
has become a high priority both for multinational companies
active in Asia and for Asia-based corporate groups expanding
overseas. Implementing robust compliance policies and procedures
is a vital step towards managing ABAC enforcement risks.
What are ABAC Laws? to misuse his or her position
to act inconsistently with lawful duties or obligations
ABAC laws generally prohibit covered persons and entities to improperly perform his or her lawful duties, or
from: to assist in providing an improper advantage.
• authorizing or facilitating Commercial bribery laws prohibit bribery in dealings
• an offer, promise, gift, or payment between private companies, while official corruption
• of anything of value (including intangible benefits laws generally set higher penalties for bribing personnel
• to any individual of government organisations or state-owned enterprises.
• either directly or indirectly (through any intermediary) Many countries have also enacted overseas bribery laws
• with corrupt or dishonest intent such as the U.S. Foreign Corrupt Practices Act (FCPA) and
• for the improper purpose of: inducing the recipient the U.K. Bribery Act (UKBA) prohibiting their nationals
and companies from engaging in corruption in foreign
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Feature
countries. Some countries have adopted gratification Policies and Procedures. Companies should adopt clear
statutes directly limiting the giving or acceptance of and visible ABAC compliance policies and codes of
benefits by government officials, while a few countries conduct. These anti-corruption policies and procedures
(such as China) also address anticompetitive payments shall apply to all directors, officers, and employees and,
to companies (not individuals) under their commercial where necessary and appropriate, outside parties acting
bribery rules. Most ABAC laws, however, share common on behalf of the Companies in a foreign jurisdiction,
elements and invite common compliance strategies. including but not limited to, agents and intermediaries,
consultants, representatives, distributors, teaming
Risks of ABAC Violations partners, contractors and suppliers, consortia, and joint
venture partners (collectively, "agents and business
The risks of ABAC offenses are staggering and soaring. partners"). ABAC policies should address the following
Enforcement of ABAC laws is intensifying, and enhanced key risks.
cooperation between authorities in different jurisdictions
raises the risks of parallel investigations. In 2015, Chinese Gifts; hospitality, entertainment.
authorities fined pharmaceutical giant GSK a record USD Providing gifts or hospitality to business contacts is
490 million for bribery of Chinese health care professionals often appropriate, constructive, conducive to legitimate
with gifts, cash, and travel. In 2016, GSK paid U.S. commercial relationships, and courteous in the
regulators another USD 20 million to settle FCPA charges relevant cultural context. However, expensive gifts and
arising from the same conduct, while investigation under entertainment can cross the line into bribery, particularly
UKBA is ongoing. ABAC violations can have devastating where the recipient feels indebted. Many government
consequences: criminal and civil fines for the companies; agencies and companies set strict limits on the acceptance of
imprisonment of responsible employees; legal fees for gifts or entertainment by their own personnel. Sponsoring
investigation, defense, and remediation; debarment travel by business contacts for industry conferences,
from supplying government agencies and international product training, factory tours, or marketing events may
organisations; reputational injury; and disruption of be appropriate in some circumstances, but special care
internal management and morale. is needed to avoid providing leisure travel for pretextual
Avoiding these consequences of “getting caught” is not, business purposes. Consequently, many companies
however, the sole reason to prioritise ABAC compliance. adopt guidelines for ensuring that all gifts, travel, and
It is increasingly clear that tolerating bribery and entertainment for business contacts are not--and cannot
corruption by employees invites other forms of employee be misinterpreted as--improper incentives, and require
misconduct-embezzlement, fraud, theft of corporate appropriate documentation and transparency to the
opportunity, collusion, and labor abuses. Investments in recipients’ employers. Many companies adopt approval
ABAC compliance helps prevent these offenses as well as thresholds based on the value per person of each expense
bribery. requiring tighter scrutiny of greater expenses. Depending
on the company’s risk profile and business model, these
Compliance Guidance from FCPA thresholds may distinguish government and private sector
Settlements recipients, set different values for different countries or
regions, and set different thresholds and review procedures
When companies settle FCPA charges with the U.S. for executives and more junior personnel.
Department of Justice (DOJ), settlement agreements
generally require “a rigorous anti-corruption compliance Charitable Donations & Political Contributions.
program that includes policies and procedures designed Providing gifts or hospitality to business contacts is
to detect and deter violations of the FCPA and other often appropriate, constructive, conducive to legitimate
applicable anti-corruption laws.” These settlements commercial relationships, and courteous in the
provide a convenient checklist of the elements of a relevant cultural context. However, expensive gifts and
successful compliance program. entertainment can cross the line into bribery, particularly
High-Level Commitment. Companies should ensure that where the recipient feels indebted. Many government
directors and senior management “provide strong, explicit, agencies and companies set strict limits on the acceptance of
and visible support” for compliance. Communicating this gifts or entertainment by their own personnel. Sponsoring
“tone at the top” through town halls, periodic compliance travel by business contacts for industry conferences,
sessions, and other means reassures employees that product training, factory tours, or marketing events may
commitment to compliance will be valued and rewarded- be appropriate in some circumstances, but special care
-and that misconduct will not be tolerated at any level. is needed to avoid providing leisure travel for pretextual
business purposes. Consequently, many companies
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Feature
Companies should provide employees Solicitation and Extortion
and third parties with multiple ABAC policies should provide employees with guidance
channels for reporting potential on how to respond when government officials or business
compliance violations on either a contacts solicit the payment of bribes or seek to extort
named or anonymous basis, such as bribes with threats of violence, destruction of property, or
hotlines and phone and email access adverse legal or commercial action.
to compliance or legal personnel.
Third-Party Relationships.
adopt guidelines for ensuring that all gifts, travel, and Companies cannot simply outsource their dirty work.
entertainment for business contacts are not--and cannot Under most ABAC laws, companies may be held liable
be misinterpreted as--improper incentives, and require for the corrupt conduct of agents, distributors, vendors,
appropriate documentation and transparency to the business partners, consultants, and other intermediaries
recipients’ employers. Many companies adopt approval if their employees either knew or should have known
thresholds based on the value per person of each expense about the bribery under various legal theories of agency,
requiring tighter scrutiny of greater expenses. Depending conspiracy, or aiding and abetting. Indeed, many high
on the company’s risk profile and business model, these profile corruption cases involve bribery channeled
thresholds may distinguish government and private sector through third parties. To mitigate these risks, companies
recipients, set different values for different countries or should adopt policies requiring: properly documented
regions, and set different thresholds and review procedures due diligence pertaining to the hiring and appropriate
for executives and more junior personnel. and regular oversight of agents and business partners;
Charitable Donations & Political Contributions. informing agents and business partners of the companies'
Corporate social responsibility is a vital and valuable commitment to ABAC compliance; and seeking reciprocal
dimension of many companies’ contributions to the commitments from agents and business partners to
communities in which they operate. Unfortunately, many comply with all applicable ABAC laws in connection
corruption cases implicate bogus charities as fronts for with the company’s affairs. Where agents and business
collecting bribes, or entail donations to a government partners play roles with significant ABAC compliance
official’s favored causes to curry favor. Company CSR risks, the written commercial agreements should include
policies should avoid ABAC risks. Similarly, company robust anti-corruption representations and warranties.
donations to political parties should not only comply with In some cases, companies may consider seeking rights to
applicable campaign finance rules (which often restrict audit agents’ books and records to ensure compliance with
corporate and foreign donations), but also be subject to ABAC laws and set low thresholds for termination in the
strict internal approval and oversight to avoid corruption event of suspected ABAC violations.
risks.
Facilitation Payments. Government officials sometimes Internal Controls
request small “grease payments” in order to perform DOJ settlements generally direct companies to implement
nondiscretionary administrative tasks (such as approving a system of financial and accounting procedures and
new phone lines, delivering mail, permitting cargo to be internal controls, reasonably designed to ensure the
unloaded, etc.). Although the FCPA statute provides a maintenance of fair and accurate books, records, and
narrow exception for such “facilitation payments”, U.S. accounts. This tracks the FCPA “accounting provisions”
authorities construe this exception very narrowly and applicable to issuers of U.S. securities, but even non-
such payments are banned as bribes under most ABAC issuers benefit from establishing effective internal
laws. Relenting to demands for grease payments can set controls. Beyond deterring and detecting bribery and
a dangerous precedent for a company. Company ABAC other misconduct, such controls enable more nimble and
policies should prohibit such payments outright, or efficient commercial operations and strategic planning.
escalate such decisions to the senior risk management and
legal functions. Periodic Risk-Based Review
Compliance programs are not static. Companies should
periodically assess the ABAC risks of their operations,
including the extent of the following high-risk practices:
involvement in regions or industries with higher risks
of corruption, interactions with various types and levels
of government officials, industrial sectors of operation,
involvement in joint venture arrangements, importance
of licenses and permits in their operations, degree of
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Feature
governmental oversight and inspection, and volume and Mergers and Acquisitions
importance of goods and personnel clearing through M&A presents unique ABAC risks. If a newly acquired
customs and immigration. business turns out to rely on bribery and other unlawful
practices, then discontinuing the practices may vitiate
Proper Oversight and Independence the commercial rationale of the deal and valuation of the
Relegating compliance to a mid-level manager tells business. Successor liability for pre-acquisition offenses is
employees that a company’s commitment to compliance is also a risk. Companies should include ABAC compliance
half-hearted. Instead, companies should assign responsibility in pre-acquisition due-diligence, and move swiftly to
for the implementation and oversight of ABAC compliance integrate newly acquired businesses into compliance
policies to senior corporate executives with meaningful programs and train new employees. Transactions
access to the Board of Directors, audit committee, and should incorporate strong compliance representations
senior officers. Critically, the compliance team should have and warranties, and may hold-back a portion of the
sufficient resources and autonomy from management to consideration subject to post-closing verification of
provide credible oversight of commercial operations. compliance or the
Monitoring and Testing
Training and Guidance Companies should periodically test their ABAC
Companies should provide periodic training in local compliance procedures. Are employees consistently
languages for all officers and directors, for all personnel and timely completing required forms and obtaining
with risk-management responsibilities (internal audit, necessary approvals? Are marketing expenses supported
compliance, and legal personnel), and for personnel in by appropriate documentation and properly authorised?
roles with serious ABAC compliance risks. While this Should ABAC procedures be updated to reflect evolving
often includes sales, marketing, and government relations accounting standards and expectations of regulators?
personnel, it is important to account for each company’s These principles from FCPA settlements with the
unique ABAC compliance risks. For example, recent DOJ provide a useful roadmap for reinforcing ABAC
FCPA cases involving financial institutions have targeted compliance policies and procedures. As authorities
the hiring of friends and relatives of government official worldwide intensify enforcement of ABAC laws in
to improperly secure business with sovereign wealth funds international business, investments in compliance are
and state banks--highlighting the ABAC compliance worthwhile. BV
risks of human resources functions. Similarly, Companies About the Author
should establish clear channels for personnel to seek
guidance on compliance questions on an urgent basis. Nathan Bush (”Nate”) is a partner in the Litigation
Department in O’Melveny’s Singapore. He was based
Internal Reporting and Investigation in the Washington, D.C. before relocating to Beijing
Companies should provide employees and third parties in 2004, and Singapore in 2012. Through over a
with multiple channels for reporting potential compliance decade of fieldwork and regulatory projects in Asia,
violations on either a named or anonymous basis, such as Nate has developed unique skills and insight into the
hotlines and phone and email access to compliance or legal distinct regulatory challenges and commercial climates of Asia’s
personnel. Companies should also develop procedures for diverse markets. Nate is experienced with the specific regulatory
responding to, investigating, and documenting allegations risks of diverse industries in Asia, including the technology, media,
of misconduct. Integrating internal counsel and audit telecommunications, semiconductor, life sciences, oil and gas,
teams, external lawyers, forensic accounting and data mining, aviation, heavy manufacturing, and retail sectors.
specialists, and investigators into a response team can be
costly and time-consuming, but advance contingency plans RELEVENT MINDA PROGRAMMES
can streamline the process and conserve time and resources
• CDAP: Integrated Reporting @ 25 Apr 2017, KL
Enforcement and Discipline • CDAP: Mergers & Acquisitions @ 5 & 6 Sept
Compensation and employment policies should reward 2017, KL
compliance and deter violations. Settlements of some
corruption cases have required adjustments to sales
commission and bonus structures to avoid rewarding risky
sales practices. It is also important to modify employee
handbooks and labor contracts to allow effective discipline
for breaches of Company compliance codes in accordance
with local labor laws.
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28
Feature
Reforming Malaysian
company law
By Philip Koh Tong Ngee
The Companies Act 2016 (Act 777) and The There will be a new set of Company Regulations 2017.
Companies Commission (Amendment) Malaysia Act This new Act replaces the 1965 Act which has governed
will come into operation on Jan 31 this year. There for over 50 years the rules and framework of business
are two major exception provisions found in Division organisation that has sought limited liability status.
8 (Corporate Rescue Mechanism) relating to corporate In the 617 provisions of the Act 777 (the old Act has
voluntary arrangement and judicial management (JM) only over 350 provisions) inter alia major new areas
which is pursuant to S.1(2) where the Minister “may that has been reformed include: one shareholder entity,
appoint different dates for its coming into operation”. setting up a company without a constitution, non-
The Winding Up provisions Pt IV (Cessation of application of doctrine of constructive notice, no par
Companies) will also be effective as of Jan 31. value shares, solvency test, liberalisation of financial
However the existing Winding Rules which was passed assistance prohibition for company to purchase its own
under the 1965 Act will still be applicable (reliance is shares, continuing enhancement of directors’ duties and
placed on S.35 (2), Interpretation Act). governance responsibilities, AGM for private companies
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29
Feature
can be dispensed with; provision for convening of a of Corporate Commission Malaysia (SSM) in December
meeting of members at more than one venue by use of 2003. The SSM established the Corporate Law Reform
technology, proxy can be appointed without them having Committee as part of SSM’s strategic direction to
qualifications (eg advocate, approved company auditor), establish a dynamic regulatory environment for business
approval for directors remuneration, share buyback in Malaysia while dealing with corporate accountability
regime amendments. and governance that is in line with global standards.
In terms of enforcement regime the Act 777 introduced The law reform committee in turn had a number of
civil and administrative proceedings for selected types working committee and devoted hundreds of hours in
of breaches of the Companies Act alongside penalty deliberation and consultation with relevant stakeholders
sanctions. Such sanctions to be imposed against the in arriving at their recommendations. It was heartening
officers as personal liabilities. for us members to see the fruition of their work in form
Act A1478 also introduces a plethora of provisions of the Act.
enhancing to levying of compound fines on offenders who It must be pointed out however that the CLRC has
contravenes provisions of Act 777. Also significant is the been functus officio upon tabling its report and the
introduction of the presumption that officers who are in recommendations. The CLRC is neither involved in
management control could also be fastened with personal the actual drafting of the Act nor responsible for any
liabilities if a company has been found to have committed infelicities. Kudos or brickbats should be directed to SSM
a company law offence unless the officer could rebut the and the Attorney General Chambers.
presumption. The new Act drew its lessons from various Commonwealth
Business people will baulk at the length of company laws jurisdictions including the UK, Canada, New Zealand,
and this is before taking into account stock exchange Australia, Singapore and Hong Kong.
regulatory rules, corporate governance codes, accounting Whether Act 777 will fulfill its laudable objectives remains
standards and practices issued by various boards and to be see.
bodies. About The Author
Company laws are not known to be brief legislation. But
is brevity an end in itself? Philip Koh Tong Ngee is a lawyer and a member
The true issue is whether a law reform is based on of the Corporate Law Reform Committee
sound principles which conduce to clarity, certainty
and simplicity. A brief law that does not assist corporate This article originally appeared in The Star, 21 January 2017.
decision makers in aligning their decisions with what is
proper and legal will in fact lead to higher costs and efforts RELEVENT MINDA PROGRAMMES
in dealing with the complexity of market choices.
Legislators and reformers are faced with unenviable choices • CDOP: Updates on Companies Act 2016 and Its
as there are users who clamour for more detailed guidance Implications to Directors @ 18 April 2017, KL
and those who urged for less prescriptive directions and
more principled based norms.
As a practitioner, we are often asked by clients to look
for and exploit loopholes when a provision is not crafted
adequately to deal with issues at hand. There is therefore
an inexorable tension between certainty and simplicity.
Since 1965, there has been piecemeal reform which
has created a patchwork of amendments. The major
amendments then were often made in reaction to
perceived gaps in law dealing with directors’ duties and
insolvency which demanded corporate restructuring.
The new Act is a comprehensive undertaking
implementing recommendations which a Corporate Law
Reform Committee (CLRC) set up under the auspices
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Board Effectiveness
Assessment (BEA)
Assessment gives the boards an opportunity to identify and remove
obstacles to better performance and to highlight best practices. MINDA
is committed to be the Centre of Excellence for directors and boards.
Our unique methodology for BEA goes beyond compliance issues to
examine board effectiveness across a broad range of measures to
ensure boards get the optimum value from it.
MINDA BEA Methodology
BUSINESS CENTRIC OPEN & ENGAGE NEUTRAL COMPARE SUSTAIN
• Assessment takes • One-on-one • Conducted by • Use past experiences • Special Board
into account current structured and experienced to provide analysis, Working session
business situation confidential 3rd party insights and with action plan
and future strategic interviews facilitators that recommendations
direction are completely • Feedback session
• 100% participation objective • Benchmarked with individual
• SWOT analysis against International director with
• Incorporate key • Ability to give best practices action plan
management views constructive
(BEA) inputs
Have one today to give meaningful insights on the board and engage
the board of directors to work towards an aligned goals and strategy.
For more information, call +60 3 2780 5031 or email [email protected].
31 Our 12th CDOP programme focused to
Programme Highlights establish a new director-oriented outlook that
will prepare you for a successful director career.
25 & 26 October 2016 These programme provides a platform for
Corporate Directors to update their knowledge
Corporate Directors Onboarding with the latest development on their Roles
Programme (CDOP) 12/2016 and Responsibilities as a Director as well as
networking among fellow Directors.
Venue: Pullman Kuala Lumpur Bangsar Among the topics covered during the two-day
programme were:
• The Roles and Responsibilities of
Company Directors
• Common Offences Committed by
Company Directors under the Company’s
Act 1965
• Government-Linked Companies
Transformation
• Enhancing Board Effectiveness:
Introducing the Green Book
• Anatomy of Corporate Governance: An
introduction
• Optimum Board Performance: Best
Practices for Board Performance and Risk
Management
The programme was facilitated by Datuk John
Zinkin Managing Director of Zinkin Ettinger
Sdn Bhd, Azryain Borhan, Chief Executive
Officer of Pinnacle Perintis Sdn. Bhd and Dato’
Richard Azlan Abas CEO of MINDA.
31 October - 3 November 2016
Building High Performance Directors 2.0:
Dynamic Board Stewardship (DiBS 1/2016)
Type: Premier Programme The key highlights of the programme include:
Venue: Sri Lanka, Colombo • The in-depth discussion of many case studies such as Everest
DiBS 1/2016 was held in Sri Lanka, Colombo and attended Climb, Apple, 3M, HP-Compaq, Axiata, Pharma UK and Silver
exclusively by a group of very seasoned senior executives that comprise Bird.
of Chairmen, Directors and CEO. The rating of 4.5 out of 5, the • The role-play session on HP’s Boardroom Drama that got
programme was led by world class faculty with extensive experience in everyone acting out real people in the real situation.
business and academia: • Understanding of Colombo’s economy culture via the field trip to
• INSEAD Professor, Dr. Randel Carlock, facilitated sessions on the Green Apparel Manufacturing Company
• Board Effectiveness Assessment Tool – helped participants to have
leadership which encompasses of building and leading high a 360 degrees view of their own board’s effectiveness.
performing board teams with case studies being discussed to BHPD is a course that designed to give Malaysian Directors a platform
enhance board effectiveness; to share with other Board Members their wide range of experiences
• Dr. Yeah Kim Leng formerly the Group Chief Economist of RAM in different cultures, industries and governance frameworks. This
Holdings, shared insights on Malaysia and vision 2020 with an programme typically caters for experienced Board Members who wish
overview of heading towards a high income economy; to broaden their knowledge and strengthen their effectiveness. The
• Mr Ravi Chaudhry, Strategy Consultant to global corporations next BHPD will be in 2017 October.
and Governments of Turkey, Switzerland and Brazil whom
presented on Corporate Sustainability.
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32
Programme Highlights
22 November 2016
CDOP 3/2016: Updates on Companies Act
2016 and Its Implications to Directors
Type: Public Programme The programme was attended by eighteen (18) participants and
Venue: Pullman Kuala Lumpur Bangsar facilitated by Mr Norhisham Abd Bahrin, Advocate and Solicitor of
the High Court of Malaya.
The recently passed Companies Act 2016 by the parliament on 28 Although the enforcement will only take place at the end of the year
April 2016 is a reform of the Malaysian corporate law with the to early 2017, it is necessary and essential for all company directors to
objectives to: know in general the various aspects of change to the Companies Act.
• Enhance internal control, corporate governance and corporate This programme provides company directors the latest development
on their roles and responsibilities under the law and offers a practical
responsibility insight on the various options and how each option works.
• Simplify the compliance provisions
• Provide flexibility in managing the affairs of companies
• Facilitate starting a business and reduce the cost of doing business
17 October 2016
PETRONAS Board Excellence #2: “Effective Strategy
for Stakeholders Management (ESSM)”
Type: Customised Programme Petronas Board Excellence on “Effective Strategy for Stakeholders Management
Venue: Pullman Putrajaya Lakeside Hotel (ESSM)” organised for Petronas focusing on:
• Have a deeper appreciation on the importance of stakeholders management for
efficient board delivery;
• Understand the role as a director and monitor performance for effective
Stakeholder Engagement and Reputation Risk Management;
• Be able to evaluate the application of reputation management, reputation risk
management and stakeholder engagement to ensure effective board decision.
The programme was facilitated by Ms Leesa Soulodre, Chief Reputation Risk Officer
& Managing Partner of the world’s leading boutique reputation risk management and
strategy consultancy, RL Expert Group.
PETRONAS Board Excellence #3: “Essentials for Directorship”
Type: Customised Programme
Venue: Session 1: 14 - 15 November 2016, Pullman Putrajaya Lakeside Hotel
Session 2: 15 - 16 November 2016, Pullman Putrajaya Lakeside Hotel
Petronas Board Excellence on “Essentials for Directorship” organised
for Petronas was facilitated by:
• Datuk John Zinkin – Zinkin P.M.W, facilitated sessions on
Companies Act and Corporate Governance;
• Mr Vincent Loh – Chief Executive Core Management Resources
facilitated sessions on Financial Language in the Boardroom;
• Director Centre Economics & Risk MUST Dr David Bobker
facilitated session on Strategy and Risk.
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33
Programme Highlights
14 February 2017
Corporate Directors Advanced Programme: Cybersecurity
Type: Public Programme and management frameworks that help mitigate the risks, as well as
Venue: Pullman Kuala Lumpur Bangsar identify potential security gaps that could prove a liability and able to
Next Session: 19 Sept 2017 address the threats from Social Engineering and Advanced Persistent
Threats that can decimate an organisation.
MINDA organised its first Corporate Directors Advanced
Programme for cybersecurity earlier this year. The programme was
attended by eighteen (18) Directors and Chairman from various
industries.
“Corporate Directors Advanced Programme (CDAP): Cybersecurity”
is the only cybersecurity related programme in the market that is
tailored for Board Members. The programme was well attended by a
good mix of Chairmen, Directors and CEOs of various GLCs and
PLCs with following take-aways:
• Cyber Security Fundamentals & Overview
• Introduction to Risk Management
• Identifying Security Gaps & Handling Threats
• Summarising the Role of the Board in Cyber Security Risk
Management
This course is to prepare members of the board and other senior
management to understand, assess and take a proactive posture in
cybersecurity. Along the way, attendees investigate risk assessment
18 October 2016
MINDA PowerTalk Series “Bridging the Gap via
Stakeholder Engagement” with Ms Leesa Soulodre
Type: Awareness & Networking a Digital Non-Executive Director and Board Advisor. A Director
Venue: Sime Darby Convention Centre since 2002, today she serves as Board Advisor to Sports Analytics
firm, Autoscout (IL), the Belgian Stakeholder Software firm, Prezly
Second MINDA PowerTalk Series for titled “Bridging the Gap via (Belgium), FashionMatch (Korea) and as the Vice Chairman of the
Stakeholder Engagement” with Ms Leesa Soulodre as the guest University of Southern Queensland Singapore Alumni Society.
speaker. The session was attended by a total of thirty (30) company
secretary invitees from various companies.
Leesa share how Board identifying their critical audience of
stakeholders for essential to acquiring, retaining and protecting their
company’s licenses to operate :
• What are the differences between reputation management and
reputation risk management and why does it matter?
• What issues / stakeholders will impact market access and/or legal
and regulatory licenses to operate and why does it matter?
• How to identify and manage stakeholder engagement and
communications for maximum impact.
Ms Leesa has worked for 20 years on the cutting edge of strategy
consulting more than 400+ multinationals and their start-ups in 19
sectors across Europe, Asia Pacific and the Americas and led companies
with turnovers from $4M to $14B USD into new markets. Leesa is
actively involved in the international start-up community as both
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34
Programme Highlights
18 November 2016
CG Breakfast Series with Directors:“The Cybersecurity
Threat and How Board Should Mitigate the Risks”
Type: Awareness and Networking
Venue: Bursa Malaysia
Bursa CG Breakfast Series co-partner with MINDA and the theme • Awareness of what organisations can do to assess the particular
of these series is The Cybersecurity Threat and How Board Should threats they face and how to use risk assessment and management
Mitigate the Risks with Dr Jessica Barker, Director at J L Barker frameworks to mitigate the risks;
Ltd. as the guest speaker. The session was attended by a total of one
hundred and fifty five (155) company directors of listed issuers. • Advice on incident management and what organisations should
The talk address the following objectives: have in place to safeguard business continuity during and after a
• Why cybersecurity is a board issue and what board members cyber crisis.
can do to understand the threats and lead their organisations in Dr Jessica Barker with a background in sociology and civic design,
proactively managing them; Jessica specialises in the human side of cyber security. Running her
• Comprehensive understanding of the threat landscape, including own company, J L Barker Ltd, she is engaged by FTSE100 companies,
the latest threats that organisations face such as ransomware, central government and SMEs across the defence, health, financial
business email compromise and Distributed Denial of Service and retail sectors to advise organisations how they can keep their
(DDoS) attacks; information safe while getting the most out of it.
8 December 2016
CG Breakfast Series with Directors:
“Anti-corruption & Integrity – Foundation
of Corporate Sustainability”
Type: Awareness & Networking
Venue: Bursa Malaysia
Bursa CG Breakfast Series co-partner with MINDA and the theme • An awareness of what directors and companies could do to expose
of these series is Anti-corruption & Integrity – Foundation and drive out the culture of corruption, if it exists;
of Corporate Sustainability with Mr Nathan Bush, Partner at
O’Melveny & Myers LLP Singapore as the guest speaker. The session • Practical advice and working solutions that build around the idea
was attended by a total of one hundred and forty (140) company of ethics and tie together corporate governance reforms and anti-
directors of listed issuers. corruption initiatives.
The talk address the following objectives:
• How corruption undermines corporate sustainability and Nathan Bush (”Nate”) is a partner in the Litigation Department in
O’Melveny’s Singapore. He was based in the Washington, D.C. before
competitiveness and why fighting corruption is essential to a relocating to Beijing in 2004, and Singapore in 2012. Through over a
sustainable future; decade of fieldwork and regulatory projects in Asia, Nate has developed
• The challenges directors could encounter in tackling corruption unique skills and insight into the distinct regulatory challenges and
in their own company; commercial climates of Asia’s diverse markets.
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35
3rd Party Event
27 October 2016
CEO MINDA Spoke At UNITAR Seminar: “Draft on
Malaysian Code of Corporate Governance (MCCG)
2016 and Government Integrity Initiatives”
Type: Speaking Engagement
Venue: UNITAR Main Campus, Kelana Jaya
Faculty of Business Technology & Accounting
(FBTA) of UNITAR together with the
Malaysian Institute of Corporate Governance
(MICG) organised a seminar to discuss on
Malaysian Code of Corporate Governance
(MCCG) 2016 draft and the initiatives
The one-day seminar has witnessed Dato’ Richard
Azlan Abas, CEO of MINDA as one of the
panellist, sharing his thoughts on the new approach
of the draft which aims to encourage progression,
and emphasises on conduct and outcomes from
corporate governance practices.
MINDA PUBLIC PROGRAMME CALENDAR 2017
PROGRAMMES JAN FEB MAR APR MAY JU NE JUL AUG SEPT OCT NOV DEC
TIER 1 PREMIER PROGRAMMES 30 2
BHPD 2.0: DiBS (Osaka-Japan) 7-9
IFoD (Melbourne-Australia) 2-Day 15-16
IDS 2017 (Kuala Lumpur)
TIER 2 PUBLIC PROGRAMMES 2 Day 14-15 21-22
CDOP -Day 7-8
18
CDOP: Companies Act 2-Day
CDAP: Finance 1-Day 21-22 19-20
CDAP: Cybersecurity 2-Day 14 19
CDAP: Strategy & Risks
CDAP: Mergers & Acquisitions 2-Day 18-19 5-6
20
CDAP: Integrated Reporting ½ -Day
CDAP: Innovation 2-Day
CDAP: Sustainability 1-Day
CDAP – MCCG 2016 ½ -Day
TIER 3 AWARENESS & 1.5- 7
NETWORKING PROGRAMMES Hour
PowerTalk Series
Company Secretary Brieϐing 1-Hour 4
Raya Open House 1-Day 25
LEGEND MCCG: Malaysia Code on Corporate Governance Enquiries : Ms Simren/ Ms Shahida/ Mr Zafril/ Ms Diana
BHPD: Building High Performance Directors CDAP: Corporate Directors Advanced Programme Tel : +60 3 2780 5031
DiBS: Dynamic Board Stewardship CDOP: Corporate Directors Onboarding Programme Email : [email protected]
IFoD: International Foundations of Directors Homepage : www.minda.com.my
IDS: International Directors Summit Date to be conϐirm
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36
Local CG News
ACROSS THE BOARD
Companies Act 2016 The Companies Act 2016, which is expected to be implemented in stages in 2017,
– a game changer will simplify incorporation procedures for companies and bring significant cost savings
in 2017? for businesses through the creation of a more business-friendly environment. Legal
firm Munhoe & Mar partner Christopher Mar Sze Wei said the big changes are in the
Source: The Sun incorporation procedure of companies, the omission of authorised share capital and
January 3, 2017 par value for shares, as well as a corporate rescue mechanism for companies.“The new
act makes incorporating a company more attractive for businesses and entrepreneurs.
It creates an environment that is more cost-effective that would also encourage the
corporatisation of businesses,”
Quality of disclosures Bursa Malaysia Bhd’s latest “Corporate Governance Analysis Report” has revealed that the
improves in 2016, says quality of disclosures among listed issuers improved on an average of 69% in 2016 from
Bursa 61% in 2014. In a statement, Bursa Malaysia said large capitalised companies achieved
average scores of 72% compared with 64% in 2014 while mid-cap companies scored
Source: The Star 67% versus 60% in 2014. Small cap companies, on the other hand, recorded significant
January 3, 2017 improvement to 68% from 60% in 2014.”
50 companies fined The Malaysia Competition Commission (MyCC) has imposed fines amounting to
a total RM25mil by RM25mil against 50 companies since 2013 to date, says Enforcement Division Director
MyCC since 2013 Iskandar Ismail. He said cases involved big industry players in various sectors in the
country. “Currently we are investigating companies in the pharmaceutical industry,
Source: The Star general insurance industry, financial institutions, as well as the services industry. “We will
December 15, 2016 be more aggressive in our enforcement next year particularly against price fixing cartels
as they are the most notorious in breaching the Competition Act (CA) 2010,” he told
reporters after conducting a media course on the CA 2010 here yesterday.
Bursa Malaysia Bursa Malaysia Securities Berhad (635998-W) (Bursa Malaysia Securities) publicly
Securities publicly reprimands Malaysia Steel Works (KL) Berhad (MASTEEL) and 3 executive directors
reprimands Malaysia for breaches of the Main Market Listing Requirements of Bursa Malaysia Securities
Steel Works (KL) Berhad (Main LR). In addition, the 3 executive directors of MASTEEL are fined a total
Berhad of RM130,500.
Source: Mondovisione boardview
December 9, 2016
37
Local CG News
ACROSS THE BOARD
Three company Three directors of a book publishing company were charged in two Sessions Courts here today
directors charged on eight counts of money laundering amounting to RM10.2 million. Wan Asri Wan Hassan,
with money laundering 44, Mohd Azizi Mahusin, 45, and Muhammad Ghazali Abdul Majid, 40, of Zilerie Global Sdn
involving RM10.2m Bhd, pleaded not guilty when the charge was read out to them separately before Judge Rozilah
Salleh and Judge Asmadi Hussin. Wan Asri and Mohd Azizi each faced three and one charge
Source: The Malay Mail respectively, while before Judge Asmadi, Muhammad Ghazali faced four charges.
November 3, 2016
Malaysia must lead in Malaysia must take the lead in addressing challenges involving integrity and corporate
corporate governance, governance, says Women’s Institute of Management (WIM) CEO Datuk Nellie Tan-
says NGO Wong. “These challenges are not just a Malaysian problem, they are a global problem. “So,
we must take the lead in Asean to push for better corporate governance and integrity,”
Source: The Star she said.
November 2, 2016
Malaysia’s MINDA & CA In an effort to enhance the effectiveness of directors in the region, the Institute of
Sri Lanka to build high Chartered Accountants of Sri Lanka (CA Sri Lanka) has joined hands with the Malaysian
performing directors Directors Academy ‘MINDA’ to offer directors both in Sri Lanka and also in the
region unique tailor made courses to help them become high performing directors. The
Source: Lanka Business Online ‘Building High Performance Directors 2.0 (BHPD)’ programme organised by MINDA
October 26, 2016 and supported by CA Sri Lanka offers three specially designed courses aimed at building
effective and dynamic directors who can perform at consistently high standards with focus
on entrepreneurship, innovation and value creation.
SSM conducts checks, The Companies Commission of Malaysia (CCM) will continue with enforcement
reviews on companies activities including checks and review of its database, to ensure regulatory compliance.
Between 2014 and October 2016, CCM examined 9,340 companies related to various
Source: The Sun provisions of the Companies Act 1965. A total of 281 companies were audited for
October 27, 2016 compliance under section 167 of the Companies Act 1965 during the the same period,
by providing CCM with their record keeping practices.
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Professional Member List
Member Category 15. Mohamad Azmi Bin Ali 29. Ravinder Kaur a/p Mahan 3. Dato' Hisham Othman
1. Datuk Ir. Adanan MMDA 00000044 Singh AMDA 00000780
Member since August 2016 Member since August 2016
Mohamed Hussain 16. Datuk Mohd Esa bin Abd MMDA 00000048 4. Karma Chhophel
MMDA 00000864 Member since August 2016 AMDA 00000793
Member since August 2016 Manaf Member since July 2016
2. Dato’ Agil Natt MMDA 00000028 30. Dato’ Richard Abas 5. Kinlay
MMDA 00000161 Member since January 2016 MMDA 00000462 AMDA 00000794
Member since August 2016 17. Karma Member since August 2016 Member since July 2016
3. Dato’ Ahmad Pardas Bin MMDA 00000788 6. Dawa Sonam
Member since July 2016 31. Dr. Saimy Bin Ismail AMDA 00000804
Senin 18. Namgay Wangchuk MMDA 00000049 Member since July 2016
MMDA 00000054 MMDA 00000798 Member since August 2016 7. Jigme Tenzing
Member since January 2016 Member since July 2016 AMDA 00000790
4. Dato’ Aziz Bakar 19. Nim Dorji 32. Shahnaz Al Sadat Member since July 2016
MMDA 00000055 MMDA 00000797 MMDA 00000056 8. Pasang Dorji
Member since January 2016 Member since July 2016 Member since January 2016 AMDA 00000789
5. Datuk Azzat bin 20. Phub Tshering Member since July 2016
MMDA 00000800 33. Dr. Tshering Cigay Dorji 9. Sangay Tenzin
Kamaludin Member since July 2016 MMDA 00000796 AMDA 00000805
MMDA 00000029 21. Qamar Wan Noor Member since July 2016 Member since July 2016
Member since January 2016 MMDA 00000961 10. Tandi Wangchuk
6. Dasho Karma Yezer Raydi Member since January 2017 34. Zalman Bin Ismail AMDA 00000795
MMDA 00000802 22. Tshewang Rinzin MMDA 00000111 Member since July 2016
Member since July 2016 MMDA 00000799 Member since August 2016
7. Dato' Ir. Hj Annies Md Member since July 2016 11. Karma Choden
23. Ir. Dr. Muhamad Fuad 35. Nirmala Doraisamy AMDA 00000803
Ariff MMDA 00000890 Member since July 2016
MMDA 00000187 Abdullah Member since September 12. Tashi Lhamo
Member since August 2016 MMDA 00000398 AMDA 00000786
8. Datuk Dr. Syed Muhamad Member since September 2016 Member since July 2016
13. Tashi Pem
bin Syed Abdul Kadir 2015 36. Azryain Borhan AMDA 00000787
MMDA 00000516 24. Tan Sri Datuk Dr. MMDA 00000894 Member since July 2016
Member since September Member since November 14. Tharchen
Muhammad Rais bin AMDA 00000791
2016 Abdul Karim 2016 Member since July 2016
9. Dr. Damber S Kharka MMDA 00000030 15. Johan Aris Ibrahim
MMDA 00000806 Member since January 2016 37. Randel S. Carlock AMDA 00000662
Member since July 2016 25. Dr. Mustakizah Zakaria MMDA 00000897 Member since January 2017
10. Faridah Rohani Rais MMDA 00000687 Member since November
MMDA 00000822 Member since December 2015
Member since August 2016 26. Tan Sri Dato’ Ir. Omar 2016
11. Ismail Mahbob Ibrahim
MMDA 00000291 MMDA 00000062 38. Nik Hasyudeen
Member since August 2016 Member since August 2016 MMDA 00000898
12. John Doody Chacko 27. Ooi Suan Kim Member since November
MMDA 00000638 MMDA 00000693
Member since December 2015 Member since August 2016 2016
13. Dr. Khairus Masnan Abdul 28. Phub Dorji
MMDA 00000792 39. Beverly Behan
Khalid Member since July 2016 MMDA 00000896
MMDA 00000816 Member since November
Member since August 2016
14. Datin Dr. Mei Pheng LEE 2016
MMDA 00000684
Member since December 2015 40. Lasantha Wickremasinghe
MMDA 00000926
Member since November
2016
Associate Category
1. Choong Yick Kheong
AMDA 00000841
Member since August 2016
2. Chris Lim
AMDA 00000133
Member since November
2015
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Our Client List
1Malaysia Development Berhad GE in Vietnam&Cambodia Managepay System Berhad S.S Excel Communication Consulting
7-Eleven Malaysia Sdn Bhd Genting Plantations Berhad Mandiri International Remittance Sdn Bhd
Affin Bank Berhad Global Facilities Management Sdn Sdn Bhd Sabah Electricity Sdn Bhd
Affin Hwang Investment Bank Bhd Manulife Asset Management Sapura Industrial Berhad
Berhad Hai Shai Sdn Bhd (MAMSB) Sapura Resources Berhad
Affin Islamic Bank Berhad Halal Industry Development Max Money Sdn Bhd Sapurakencana Petroleum Berhad
Agrobank Corporation Maybank Asset Management Sdn Sarawak Hidro Sdn Bhd
Ahmad Zaki Resources Berhad IHH Helathcare Berhad Bhd Seagate Systems (M) Sdn Bhd
Allianz Malaysia Berhad IJN Holdings Sdn Bhd Maybank Group Berhad Securities Commision Malaysia
Alpha Catalyst Consulting IK Chin Travel Service (K) Sdn Bhd Mazmi Associates Sdn Bhd Seers Partnership Sdn Bhd
Amanah Raya Berhad Indah Water Konsortium Sdn Bhd Menara Optometry Centre Sdn Bhd Sepang International Circuit
Amanahraya Investment Management Inno Bio Ventures Sdn. Bhd. MIDF Amanah Investment Bank Shin Yang Shipyard Sdn Bhd
Sdn Bhd InnoSense Consultancy and Trading MIMOS Berhad Silterra Malaysia Sdn Bhd
AmcorpGroup Berhad Institut Keushawanan Negara Ministry of Finance Sime Darby Berhad
Amir Kahar Holdings (INSPEN) Ministry of Transport SIRIM Berhad
AptivaAsia Sdn Bhd Institut Terjemahan Buku Malaysia Ministry of Women, Family and SME Bank
Attorney General Chambers (ITBM) Community Development SPAK Sdn Bhd
Axiata Group Berhad International Advertising Association MNRB Holdings Berhad State Trading Organization PLC
Bank Rakyat Iskandar Investment Berhad Mondelez Malaysia Sales Sdn Bhd Sumber Jalur Sdn Bhd
BHIC Aero Services Sdn Bhd Iskandar Malaysia Studios Sdn Bhd Multimedia Development Syarikat Perumahan Negara Berhad
BIB Insurance Brokers Sdn Bhd Iskandar Regional Development Corporation Sdn Bhd Syarikat Prasarana Negara Berhad
BIMB Holdings Berhad Authority (IRDA) MyEG Services Berhad Syarikat Takaful Malaysia Berhad
Bina Darulaman Berhad Iskandar Waterfront Development Naim Holdings Berhad Taj Muhabath Sdn Bhd
Bismi Enterprise Sdn Bhd Island & Peninsular Berhad NCB Holdings Bhd Takaful Ikhlas Berhad
Boustead Holdings Berhad IWK Konsortium Sdn Bhd Opus Group Berhad Tan Chong Motors Sdn Bhd
Boustead Penang Shipyard Sdn Bhd Jambatan Kedua Sdn Bhd OSK Technology Ventures Sdn Bhd Taylor's University Sdn Bhd
Bursa Malaysia Berhad JBB Consultant Sdn Bhd Pakatan Reka Arkitek Sdn Bhd Technology Park Malaysia
Business and Management JKP Sdn Bhd Pejabat Menteri Besar Johor Corporation Sdn Bhd
International College (BMIC) K & N Kenanga Holdings Berhad Pejabat Timbalan Setiausaha Kerajaan Telekom Malaysia Berhad
Cagamas Berhad Khazanah Nasional Berhad Negeri Sabah Tenaga Nasional Berhad
CapitaMalls Malaysia REIT KKIP Sdn Bhd Pembinaan BLT Sdn Bhd (PBLT) TH Plantations Berhad
Management Sdn Bhd KL Kepong Country Homes Sdn Bhd Penang Port Sdn Bhd TH Properties Sdn Bhd
CBL Money Transfer Sdn Bhd KLIX Academy (M) Sdn Bhd Pengurusan Aset Air Berhad TH Technologies Sdn Bhd
Cement Industry Malaysia Berhad Kolej Yayasan Sabah Perak Corporation Berhad The Iclif Leadership and Governance
CG Board Asia KPJ Healthcare Berhad Perbadanan Bekalan Air Pulau Pinang Centre
Chartered Accountants Australia and KPJ Johor Specialist Hospital Sdn Bhd Themed Attractions Resorts & Hotels
New Zealand KPJ Seremban Specialist Hospital Perbadanan Hal Ehwal Bekas Sdn Bhd
Chemical Company of Malaysia KPS Consortium Berhad Angkatan Tentera Theta Edge Berhad
Berhad KTM Berhad Perbadanan Kemajuan Negeri Tokio Marine Life Insurance Malaysia
CIMB Bank Berhad KTM Distribution Sdn Bhd Selangor (PKNS) Berhad
CIMB Holdings Berhad KUB Agro Holdings Sdn Bhd Perbadanan Nasional Berhad (PNS) TPM College Sdn Bhd
CIMB Islamic Berhad Kumpulan FIMA Berhad Performance Additives Sdn Bhd Triplc Berhad
Cliq Energy Berhad Kumpulan Modal Perdana Sdn Bhd Permodalan Nasional Berhad Triple Trillion Sdn Bhd
Composite Technology Resources Leaped Services Sdn Bhd Petra Jaya Properties Sdn Bhd UDA Holdings Berhad
Malaysia Sdn Bhd Lembaga Tabung Angkatan Tentera Petronas UEM Builders Berhad
Continental Tyre PJ Malaysia Sdn Lembaga Tabung Haji Pharmaniaga Berhad UEM Edgenta Bhd
Bhd Linshanhao Plywood (Sarawak) Sdn PLUS Expressways Berhad UEM Group Berhad
Credience Malaysia Sdn Bhd Bhd Primanora Medical Centre UEM Sunrise Berhad
Destination Resorts & Hotels Sdn Malakoff Corporation Berhad Prokhas Sdn Bhd UiTM Hospitality Management
Bhd Malaysia Airlines Prolexus Bhd Services Sdn Bhd
Dijaya Corporation Berhad Malaysia Airports Holdings Berhad Proton Holdings Berhad UMW Corporation Sdn Bhd
DRUK Holdings & Investment Ltd. Malaysia Building Society Berhad PT Bank Lipro Tbk UMW Oil & Gas Corporation
Ekuiti Nasional Berhad (Ekuinas) Malaysia Debt Ventures Berhad Puncak Niaga(M) Sdn Bhd Berhad
Employees Provident Fund Malaysia Venture Capital QL Resources Berhad Unit Perancang Ekonomi Negeri
EMRAIL Sdn Bhd Management Berhad Rangkaian Hotel Seri Malaysia Sdn Johor
Encorp Berhad Malaysian Electronic Clearing Bhd Valuecap Sdn Bhd
EP Manufacturing Bhd Corporation Sdn Bhd (MyClear) Ranhill Group Sdn Bhd WTK Holdings Berhad
Ernst & Young Sri Lanka Malaysian Kuwaiti Investment Co. Ranhill Worleyparsons Sdn Bhd WZR Property Sdn Bhd
Etiqa Takaful Berhad Sdn Bhd RHB Bank Berhad Yayasan Raja Muda Selangor
EXIM Bank Malaysian Mosaics Berhad RHB Islamic Bank Berhad Yayasan Sabah Group
Faber Group Berhad Malaysian Resources Corporation Romstar Sdn Bhd ZICO Shariah Advisory Services Sdn
Felcra Berhad Berhad Rupikira Sdn Bhd Bhd
Gas Malaysia Berhad Malaysia-Thailand Joint Authority S P Setia Berhad
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Issue.18 Oct16_Feb17
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