CORPORATE GOVERNANCE AND HUMAN GOVERNANCE: ETHICS

It was reported in the Star today that the Malaysian Anti-Corruption Commission (MACC) encourages government-linked companies (GLCs) and private companies to sign the corporate integrity pledge in an effort to stamp out corruption. The move would create a business environment free of corruption. GLCs and private companies are encouraged to do so to reflect a consensus among corporation to combat corruption and enhance the confidence among foreign investors that there is healthy competition among businesses in Malaysia. Among the important elements of the pledge was the Corporate Integrity Pact, which would be signed by companies involved in the procurement of a project.
Through the pact, those offering and accepting a project would pledge not to engage in any corrupt practice throughout the process and to report to the MACC if there was any bribery attempt. In turn, the MACC would cooperate with the companies involved to ensure that their operations were free of corruption and help resolve possible incidences of corruption. It was pointed out that stiff competition among companies had caused some to resort to corrupt practices. Nonetheless, companies with high ethics would use their actual capabilities to obtain a contract. But there are also those who take the easy way out by offering bribes. This move is seen as an enhancement of corporate governance in Malaysia.

A couple of months ago, the Securities Commission unveil their 2 nd Capital Market Masterplan. It was anticipated that the by 2020, the capital market in Malaysia will be around RM 4.8 trillion from the current RM 1.2 trillion. In order to achieve that, corporations in Malaysia should adhere more to ethics, which is an important component of human governance. Hence, corporate governance must be complimented with human governance in order to eradicate corruptions. The authorities should also look at more stringent penalties imposed on corporate wrongdoers. It is irony to penalize a white collar crook with RM 100,000 or two months jail if he /she absconded RM 10 million. To curb corruptions more effectively, all assets of perpetrators should be frozen and all monies absconded should be returned to the rightful owner.