‘Why we fail at corporate governance’
Malaysia still suffers one corporate scandal after another, says Musa
PETALING JAYA: Malaysia is great at formulating legislation for corporate governance but lacks the ability to implement and enforce these, said former deputy prime minister Tun Musa Hitam (pic).
“As far as I can remember, Malaysia is the leading developing country that currently occupies the top half of the list in formulating legislation, rules and regulations for corporate governance.
“But when it comes to implementation and enforcement, we occupy the lower half of the list,” said Musa, who is also World Islamic Economic Forum chairman. Delivering his keynote address at the Women’s Institute of Management’s Conference on Integrity and Corporate Governance, Musa said that in the past, government and corporate leaders were required to attend a course on corporate governance.
“It is quite obvious that these efforts are to no avail and the programme seems to have been scrapped.
“After all our training, Malaysia still suffers one corporate scandal after another,” he said.
The country’s weakness in corporate governance lay in its inability to enforce the rules and was the major cause of its many scandals, he said.
Musa said that good governance extended to areas relating to corruption, abuse of power, accountability, application of corporate social responsibility (CSR), transparency and protecting shareholder interest.
“If you ensure transparency and accountability in decision making, apply CSR and care about shareholder interest, then you are practising good corporate governance,” he said.
Good corporate governance, Musa pointed out, could only happen if all the laws were implemented without fear or favour.
“This is most crucial for good corporate governance and it is up to the chairman and board of directors to administer this,” added Musa.
Another important ingredient was leadership with integrity, he said.
“Leadership by example produces good governance and in my experience, if this is practised, even the most influential person can be persuaded to act in the broader interest of the corporation and shareholders.”