“Corporate governance. Make it as sexy as you can.” said John Plender, followed by laughter from the crowd.
The senior writer and columnist for Britain’s Financial Times newspaper was giving a talk on the power of journalism in promoting corporate governance to some 60 business journalists from various media publications in Kuala Lumpur.
“People only talk about corporate governance (CG) when there is a scandal. You need to hype CG as a key to success or failure of a company.” he added.
What is corporate governance?
The Financial Times defined it as how a company is managed, in terms of the institutional systems and protocols meant to ensure accountability and sound ethics.
The concept encompasses a variety of issues, including disclosure of information to shareholders and board members, remuneration of senior executives, potential conflicts of interest among managers and directors, supervisory structures, etc.
Now question is, what is a “good” or “bad” governance?
Plender cited the most famous example of bad governance is Enron. About how executives lied about Enron’s financial results for years in order to increase the value of personal stock options.
These actions went undetected by the board, the auditor, ratings agencies, regulators, and the media for many years until the company ultimately collapsed into bankruptcy.
“Look out for related party transactions,” said Plender, as a guide to sniff out a bad corporate governance.
“Opacity, lack of governance and accountability, these areas are where bad corporate governance most likely will breed,” the UK shareholder activist and corporate governance consultant added.
But why is CG so important?
Corporate governance has a huge importance to the national level because it affects how corporate sectors perform.
“It affects cost capital of company within corporate sector. It is also very important for a country in terms of attracting to foreign capital. This is especially so for the emerging market -- which often needs external capital.
"So, good corporate governance is like a magnet,” said Plender who have covered the topic most of his journalism days in The Economist and now Financial Times.
Besides encouraging investments and investor’s confidence, good governance does have a wider impact.
It also boost companies’ competitiveness, better equips companies to survive economic crises, makes corruption less likely and ensures check and balance on big business that will benefit the society.
How do we implement it?
He raised the need for more independent representatives on the board of directors.
However the question now is to how to go about implementing it when most companies especially in Malaysia are controlled by owners.
“Well question when it comes to try to improve the board when there is controlling owner whether there is a lever in order to pressure into having better representative on board.”
“The main lever is capital. If they need capital, outside investors can say to the controlling owner; we want more independent representative in the board. That is the chief and possibly the only way to improve board quality if you have a controlling owner.”
Who will monitor CG?
“Shareholders and community. However, journalists play a role as watchdogs,” he reiterated while adding that business journalists especially have the power to influence public and investors opinion on corporate governance-related matters.
Time to sniff out some CG stories.
John Plender’s biography:
After taking his degree at Oxford University, John Plender joined Deloitte, Plender, Griffiths & Co in the city of London in 1967, qualifying as a chartered accountant in 1970. He then moved into journalism and became financial editor of The Economist in 1974, where he remained a senior editorial writer and columnist at the Financial Times, an assignment he combined until recently with current affairs broadcasting for the BBC and Channel 4.
Tan Su Lin
Tue Jun 04 2013
Penolong pegawai perubatan didenda RM3,000 terima rasuah urus jenazah
Seorang penolong pegawai perubatan di Hospital Sultan Haji Ahmad Shah Temerloh didenda RM3,000 kerana menerima rasuah berkaitan kerja pengurusan jenazah.
KBS laksana kajian impak penganjuran Sukan SEA 2027
Mesyuarat mengenai perkara itu masih berjalan dengan penglibatan pelbagai pihak bagi mengenal pasti kelebihan dan kekurangan.
19 individu ditahan dipercayai terbabit sindiket pelaburan palsu
Mereka terdiri daripada lapan lelaki dan tujuh wanita tempatan serta empat lelaki warga asing berusia antara 16 hingga 38 tahun.
[TERKINI] Selamatkan Gaza: Dialog dua Perdana Menteri di Mesyuarat Khas WEF Arab Saudi
Tiga PM iaitu PM Palestin, Jordan dan Mesir serta wakil PBB di Gaza duduk sepentas berdialog secara langsung mencari formula menyelamatkan Gaza yang menjadi pusat graviti kepada kestabilan rantau Asia Barat.
OCC: Masih banyak usaha perlu dibuat dalam isu hak kanak-kanak - Azalina
Malaysia masih ketinggalan berbanding negara lain dalam menangani isu penderaan dan masalah sosial melibatkan kanak-kanak.
Piala Asia B-23: Indonesia tekad roboh benteng kebal Uzbekistan
Bintang skuad Garuda Muda, Witan Sulaeman, teruja dengan peluang untuk melakar lebih banyak sejarah ketika membuat persiapan menghadapi aksi separuh akhir PIala Asia B-23 malam ini.
Airbus RACER helikopter terpantas dunia?
Ketika masih dikenali sebagai pesawat eksperimen X3, ia memegang rekod sebagai helikopter terpantas dengan kelajuan mencecah 472 km/j.
AWANI Ringkas: Letupan bom di Thailand | Hadapi dua pertuduhan
Ikuti rangkuman berita utama yang menjadi tumpuan sepanjang hari di Astro AWANI menerusi AWANI Ringkas.
Mesyuarat Khas WEF: Tekanan politik dalaman punca Israel ‘menggila’ - PM Jordan, Mesir
Kedua-dua perdana menteri negara Asia Barat itu setuju serangan ketenteraan di Rafah hanya akan memburukkan keadaan yang sudah sedia meruncing.
Tingkat kawalan di sempadan tangani kemasukan kambing, lembu murah menjelang Aidiladha
KPKM meminta jabatan dan agensi kerajaan berkaitan kawalan sempadan memperhebat penguatkuasaan serta kawalan di pintu masuk negara bagi menangani kemasukan kambing dan lembu murah menjelang Aidiladha.