Finance Minister Lim Guan Eng speaks at the International Directors Summit 2019
in Kuala Lumpur October 15, 2019. ― Picture by Shafwan Zaidon

KUALA LUMPUR, Oct 15 — Lim Guan Eng has called upon the nation’s corporate leaders and captains of industry to set a tone of anti-corruption and integrity at the top level to ensure good governance in their respective organisations.

In his keynote address at the International Directors Summit 2019 here today, the finance minister noted that it was encouraging that the 2019 Corporate Governance Monitor published by the Securities Commission show that 70 per cent or 841 of listed companies have adopted the 27 best practices listed in the Malaysia Code on Corporate Governance.

“While rules and regulations are important in improving integrity, they alone are not sufficient. The Board of Directors needs to set the right tone from the top,” Lim said.

“A culture of integrity and ethics is central to good governance and it must be put into practice in every aspect of the company’s operations.

“Being a director today is a challenging job. There is greater demand for scrutiny on performance and conduct, as well as accountability in discharging their roles and responsibilities.

“Rebuilding of trust lies within the drivers of the company, and how well they can demonstrate accountability and transparency,” he added.

However, he also reminded the crowd that audit firm PricewaterhouseCoopers had reported in its 2018 Global Economic Crime Survey that 41 per cent of Malaysian respondents had suffered from fraud or economic crime last year, which was a 28 per cent increase from in 2016.

The survey also found that 69 per cent of the most impactful frauds suffered by organisations were committed by the organisation’s own members with 32 per cent perpetrated by its senior management.

Later, during a discussion with the minister, Paul Moore, who is the whistleblower of the Halifax Bank of Scotland, advised human resource departments to adopt a policy or practice where promotion is not based purely on result oriented individuals.

“We can have the best corporate governance structure in the world but if we have a culture of greed it will fail.

“If we promote into senior executive or managerial positions people who don’t have the right ethics, people who have personality traits that are ruthless, charming with a lack of empathy…. we are at a huge disadvantage.

“We must make sure that human resources policy will not promote someone who is just good at what they do. Don’t put someone at the top who creates a culture of fear, blame and a lack of openness,” he said.