Capital markets’ perception of M’sia damaged by 1MDB issue
KOTA KINABALU: The fall in international perception on Malaysian organizational behavior highlights the importance of raising public governance standards to ensure a positive capital flow, said Malaysian Institute of Corporate Governance (MICG) president Datuk Yusli Mohamed Yusoff.
He said the Asian Corporate Governance Association’s (ACGA) Corporate Governance Watch 2016 survey had seen Malaysia falling from the fourth to the sixth stair of the Asian countries corporate governance perception rankings.
He noted that the ACGA secretary general Jamie Allen had said that Malaysia would have done ‘much better’ if not for the 1MDB issue, which had damaged the capital markets’ perception of Malaysia.
“As the report further alludes to, if we do not see a marked improvement in our level of public governance, Malaysia’s score in next year’s survey will fall. This can affect investor perceptions of the country, which invariably will impact our economy,” said Yusli in his keynote address at the first MICG Conference in Sabah here Tuesday.
The MICG president stressed that a structured approach built on having the right working culture or ‘Tone from the Top’ is vital.
He said this human aspect of governance, which demands integrity, acceptance of fiduciary duty and responsibility and a firm belief in transparency and accountability, must be well taken care of in Malaysia.
“It is heartening to note, therefore, that the commentary on Malaysia in ACGA’s survey speaks of an underlying trend of overall improvement. The challenge is to openly and rationally address those issues in which we are falling short. This is an opportunity for us to learn and raise our standards further,” pointed out Yusli.
In addition, he emphasized that these factors for good corporate governance need to go beyond the country’s listed companies and reach the SMEs, private and unlisted public sector companies as well as unlisted GLCs.
“When we talk about corporate governance, it is actually about how our companies in Malaysia behave.
“At the same time, we cannot expect corporate governance to be well-practiced among the corporate sector if the overall public governance is not strong as well. So that is why it is important to talk about the importance of public governance in the country,” he elaborated later on during a press conference.
“These are the kind of messages we are trying to get out to the public and we hope that people can see the importance of good corporate governance. We want people to start practicing, if they are not already, the best governance practices within their own organizations whether it is a public listed company, an SME or a state-owned organization.
“I think it is important that we are seen as a country that is addressing these issues so that when ACGA or any other similar organizations conducts a similar review, they can take into account the steps being taken to address all these weakness,” he asserted.
During the event, the MICG President also talked about the 2017 Global Corruption Barometer (GCB) - Asia Pacific report, which among others surveyed the public perceptions of corruption and the government’s effectiveness in tackling corruption.
He said 62% of Malaysians felt the current government was handling the fight against corruption badly, while 41% of Malaysians said that the Malaysian Anti Corruption Commission (MACC) is doing badly at fighting corruption.
Yusli added that both the reports ‘serve to underline the urgent need to improve the quality of Public Governance in Malaysia’.
“This is a point which MICG has been stressing as a key factor necessary to achieve high governance standards in Malaysia,” he said.
MICG organized its first conference in Sabah themed ‘Governance Culture in Your Organization’ here yesterday to promote the building of a healthy, workable governance culture in organizations.
The speakers included Corporate Streets Sdn Bhd managing director and founder Aida Lim Abdullah, The Malaysian Institute of Integrity Economic Institution director Mohd Ismail Abdul Jalil, Kadir Andri & Partners senior partner and Suria Capital Holdings Berhad former independent non-executive director Abdul Kadir Kassim and Sime Darby Berhad senior independent director Datuk Zaiton Mohd Hassa.
The conference discussed a range of topics including ‘Overview of the Malaysian Code on Corporate Governance 2016 and the Companies Act 2016: Impact on the Board and Business’, ‘The Effective Board’, ‘Business Integrity: Whispers Made Louder’ and ‘How To Develop Corporate Governance into a Culture’.