Business

Saturday May 9, 2009

Creating professional directors

By CECILIA KOK


BEHIND the suits and ties that make up a crisp professional look is a world full of surprises. By this, we are talking about the corporate world where multi-million dollar deals are sealed every other week.

According to the Malaysian Alliance of Corporate Directors (MACD) president Datuk Jaffar Indot, the business world is almost like a “jungle out there”.

Jaffar Indot ... We are a new organisation for directors, of directors and by directors.

With so much money involved in their everyday dealings, corporate players face the persistent temptation to cheat. As we have witnessed over the years, a number of major corporate fraud cases have already been made public and this trend is indeed worrying.

Remember the scandal involving US energy giant Enron Corp in the early 2000? What about the recent one involving global IT company in India, Satyam Computer Services?

We do not have to go far to find such accounting frauds happening in the corporate world. Consider the Malaysian cases of air express cargo operator Transmile Group Bhd and optical disk manufacturer Megan Media Holdings Bhd in 2007.

While corporate leaders have been entrusted with the responsibility of maintaining the standards of ethics in the corporate world, they have sometimes failed to carry them out effectively. This has given rise to common cases of abuse of power and manipulation of numbers to paint a false picture of the actual condition of their companies. Cooking the books, they call it.

Undeniably, therefore, there is an urgent need for corporate leaders who are able to uphold integrity and investors’ trust so that balance and fairness to all stakeholders in the economy are ensured.

With this vision in mind, Jaffar in February co-founded MACD that comes with a mission of developing a pool of professional directors who stand for the highest standards of good governance for Corporate Malaysia.

Repository function

MACD is established as a not-for-profit company limited by guarantee with the backing of the Securities Commission and Bursa Malaysia. Scheduled for launching by the end of the month, MACD will also function as a repository of professional directors in Malaysia.

In other words, MACD will represent a body of professional directors, whose profiles will be compiled in a database. So, for investors who are hunting for capable directors to sit on the decision-making board of their companies, MACD will make their job easier by providing a database of quality directors from which these investors can choose.

Paul Chan ... We hope to develop a new generation of professional directors.

“We are a new organisation for directors, of directors and by directors,” says Jaffar, adding that one of the main focuses of MACD is to raise the benchmark for professionalism among corporate leaders, especially in the areas of governance and social responsibilities.

Jaffar explains that MACD will be a strong advocate and champion for good corporate governance among directors and business leaders in Malaysia. Towards this end, he says professional directors have to be prepared to walk away from companies that go against the code of ethics and that they have to be strong enough to implement healthy changes in the companies that they are leading.

Continuous education

As part of its aim to promote excellence in directors’ performance, MACD has in its plan to set up a college, specifically for existing and aspiring business leaders, that will also function as a regional centre for directors’ training.

Jaffar explains that MACD wants to open the door by making it possible for individuals who aspire to become a corporate director in the future to go through a certificated course. He adds that it is MACD’s hope that in the future, all professional corporate directors would be certified.

“This is the kind of practice we want to introduce,” he says.

The planned directors’ college is mainly intended to encourage a lifelong learning process among business leaders so that they could acquire critical skills for management in a constantly evolving economy.

In a recent presentation to StarBizWeek, MACD deputy president Paul Chan explains that the current business environment is one whereby the discipline and governance among corporate directors are compelled and guided by a set of rules and regulations. They work mainly for the benefits of only the shareholders, Chan adds.

But by introducing its professional directors’ programme, Chan says, MACD hopes to change the business environment to one whereby the discipline and governance practices among corporate directors are based on principles and voluntary compliance, and that they would work for the benefit of stakeholders in the economy.

“Our hope is to develop a new generation of professional directors that could thrust Corporate Malaysia forward,” he adds.

Global network

Jaffar believes that MACD’s effort could boost the profile of Malaysian corporate directors and business leaders to be on par with their international peers, and hence, make Malaysia an attractive investment destination for foreigners.

He adds that MACD will soon forge strategic ties with key local and international organisations to make it more attractive for corporate directors to join the organisation as members.

MACD is currently engaged in a national drive to recruit members, which it envisions to be directors from both public and non-public limited companies, as well as corporate professionals and even students.

At the end of the day, however, our aim is to attract quality members and retain them, Chan explains, adding that MACD wants to be able to represent Malaysian directors’ interests in the local and international markets.

Still in its infancy stage, Chan revealed that several leading organisations in Malaysia have already shown positive response on becoming the chartered members of MACD. As chartered members, these organisations are to stand as champions of developing professionalism in corporate directorship.

Chan is optimistic about being able to secure the commitment of at least 10 select companies to be its chartered members. He, however, says the organisation prefers to maintain the list of companies confidential until the dotted lines are signed.

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