Say No To Hudud

Friday, December 3, 2010

The Sad State of Corporate Governance in Malaysia

In A Board Culture of Corporate Governance, business author Gabrielle O'Donovan defines corporate governance as 'an internal system encompassing policies, processes and people, which serves the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity, accountability and integrity. Sound corporate governance is reliant on external marketplace commitment and legislation, plus a healthy board culture which safeguards policies and processes.

This "oversight" has got dire implications for the annual audit off CIMB, Genting Group, Sime Darby etc

Datuk Johan Raslan is the Executive Chairman of PwC Malaysia, and among other things a member of the Securities Commission of Malaysia's Corporate Governance Consultative Committee.

The following are the Questions Raslan has to answer to the Malaysian public.

Q1 : Did you not know that the registration of PwC as an Auditing firm of public interest entities on the 1st of April 2010 under Section 31s (1) SCA was a physical and legal impossibility?

Q2 : Did you not know that the Securities Commission was only empowered to collect fees on the 15th of April 2010 for registration?

Q3 : If your answer to the first two questions are no, then why on earth are you championing Corporate Governance (and/or issuing press statements to that effect)?

In 1997, the East Asian Financial Crisis saw the economies of ThailandIndonesiaSouth KoreaMalaysia and The Philippines severely affected by the exit of foreign capital after property assets collapsed. The lack of corporate governance mechanisms in these countries highlighted the weaknesses of the institutions in their economies. (Wikipedia)

Fast forward thirteen years, and we once again see uncertainties in the global market. How much stronger can we honestly say our Corporate Governance framework is today, in light of the questions that are raised here?

Falsus in unum, falsus in omnibus. False in one thing, false in everything. Should we not expect the absolute highest standards, in safeguarding policies and processes, in one of the most important parties in Corporate Governance i.e. the Auditors themselves, and by extension the body that oversees them, the Audit Oversight Board? If we apply the Roman legal principle that a witness who willfully falsifies one matter is not credible on any matter, what will happen? One shudders to think of the implications.

1 comment:

  1. BOD of SC and director of PWC at same time ?

    Huge MF conflict of interest !