Board members must be accountable

THE Deputy Prime Minister was spot on when he said that 1MDB directors will be held accountable if there is negligence in “No bailout with public funds” ( The Star, Match 7).

He added that the board of directors should be prepared for legal action should investigations show negligence or misappropriation in the transactions involving 1MDB.

This statement applies to ALL those who sit as members of board of directors in both public and private entities.

When I served as a board member, I made sure that I read the board papers diligently, went through the financial figures thoroughly and then asked the right questions.

Generally, many board members do not realise the heavy responsibility entrusted on them when they agree to sit on the board.

Some take their responsibility lightly. For instance, they do not bother to read the board papers just because they will not be attending the said meeting.

Hence, some have even had the cheek to state that since they were not present at the meeting, they were not bound by the decisions made by the board.

There are also cases of many papers being just “bulldozed” through due to time constraints, particularly those that are placed at the bottom of the meeting agenda.

I was unpopular because I asked too many questions and in the process there was more debate and new information revealed.

Although this delayed the completion of the board meetings, I stood my ground as I was merely carrying out my fiduciary duty. (You can be sure my term was not renewed!)

According to the Business Dictionary, fiduciary duty is a legal obligation of one party to act in the best interest of another.

The obligated party is typically a fiduciary, that is, someone entrusted with the care of money or property.

According to Lord Millet, “A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence”.

Corporate directors may be held to a fiduciary duty similar in some respects to that of a trustee. The duties of a fiduciary include loyalty and reasonable care of the assets within custody.

Since the Government has placed the utmost trust and confidence to the 1MDB’s board of directors to manage and protect the assets and money of 1MDB, the public too has a similar expectation.

Since public funds are involved, the public expect the IMDB board members to have exhibited the highest standard of integrity.

So far it appears that 1MDB’s response to many of the issues raised has not been convincing enough.

Therefore, 1MDB should not allow the opposition and others a field day in continuing questioning on this and that transaction.

1MDB should come clean on all its transactions and prove that all of the business deals were above board.