INTEGRITY is the buzzword on everyone’s lips today. But how serious are we about it?
As Malaysian corporate organisations – be they government-linked companies (GLCs) or quasi-government entities – attempt to improve their image of being anti-graft, one of the measures taken is an integrity pledge and the implementation of a no-gift policy.
In many other countries, the rules on the no-gift policy are clear: they include basic lunches, chocolates, books, or fruits below a value of US$30-US$50. Certain pension funds and corporates abroad will only accept a book if it is stated that the book has no commercial value.
Other pension funds only accept invitations for lunch at venues where a lunch plate does not cost more than US$30 per person. Golfing is definitely not allowed in many of the North Asian countries.
In Malaysia, it boggles the mind that there are corporates which claim that they have a no-gift policy on the surface, but are in fact quite willing to accept very elaborate gifts. So perhaps they should change their signage to say, “No-small-gift policy, please”.
Of late, we have learnt of heads of GLCs requesting freebies, not only for themselves, but also for their wives, their children and the C-suite. The requests can be very detailed, and often include a list of what they require when they travel.
Let’s not be opaque at what is often asked for: flights, limo services, hotels, and the jewel in the crown, box seats at top-tier sporting tournaments such as the Olympics, World Cup rugby and soccer finals.
With the renewed enthusiasm for the “rule of law” (we can’t hear that phrase enough), we need to be more transparent regarding what kind of gifts are actually acceptable. What is the point of pretending that the corporate vision discourages gifts, when in reality, everyone knows that this only applies to “small gifts”.
Another classic version of the “no-small-gifts policy” is where vendors or service providers provide “lawatan sambil belajar” or “practical learning visits”, which often end up being in some luxurious location. We have spoken to various companies where even board members are taken to these luxurious locations to visit a vendor or to view their products. Again, the ability of corporates to stretch the interpretation of what is and isn’t allowed goes under the radar.
These issues are pervasive in the corporate environment. When you are on the receiving end of a Whatsapp message dictating the demands of an individual in power, what choice do you have but to acquiesce?
This practice needs to stop. So what are the options available?
First and foremost, we need to have better protection through whistle-blowing policies. All too often, the person who reports wrongdoings is vilified. Not all industries or organisations have a special department that handles whistle-blowing.
Some regulatory bodies are better than others, and there is some comfort in knowing that something will be done. Other regulators are not so transparent, and often will just bury the information or give a heads-up to those who have been implicated.
The second suggestion is to revamp the boards of GLCs and public-listed companies (PLCs). There is so much confirmation bias that exists within these boards, which means that there is very little effort made to widen the depth of discussion on issues.
The culture from the past government has seeped into corporate Malaysia. Many companies have government representatives or former civil servants on their boards. While some of these individuals may have the necessary skill sets, there are some who are completely out of their depth in these positions – they have no financial understanding or knowledge of basic governance standards.
Accountability and transparency are not principles that they are used to. So in order to bring credibility to their position on the board, they resort to name-dropping at their dinner conversations.
All these practices need to be changed. And until we stop that culture of putting former civil servants or politicians on boards as a “goodbye present” for them, corporate Malaysia will never change.
We have now made a difference to the political fabric of our country; let us also use this opportunity to do the same with corporate Malaysia.
© CORSTON-SMITH ASSET MANAGEMENT SDN BHD 2014