Oleh/By : DATO SERI DR MAHATHIR BIN MOHAMAD
Tempat/Venue : MANDARIN ORIENTAL HOTEL,
KUALA LUMPUR
Tarikh/Date : 05-03-2002
Tajuk/Title : KUALA LUMPUR STOCK EXCHANGE
CORPORATE AWARDS 2001
Versi : ENGLISH
Penyampai : PM
I would like to thank the host, Kuala Lumpur Stock
Exchange for inviting me to the KLSE Corporate Awards
2001. On this auspicious occasion, we gather to
celebrate the success and achievements in the effort to
promote excellent corporate conduct among public listed
companies.
2. I must commend the effort by KLSE and public
listed companies in enhancing the standard of corporate
conduct through the KLSE Corporate Awards.
3. The success of the corporate sector in Malaysia
has contributed not only to the economic development of
this country, but also to national development.
4. In setting the framework and policies for the on-
going progress and improvement in the Malaysian
corporate sector, the government also has in mind the
need for the corporate sector to continue to work hand
in hand with the government to achieve social, economic
and national objectives.
5. Thus, it is important for the corporate sector to
remain strong and responsible in order to provide the
impetus and contribute towards further growth of the
nation.
6. Although the corporate sector is primarily profit
oriented and seeks to serve shareholders' objectives,
participants in this sector must always remember that
it is society and its prosperity which make their
businesses possible and profitable. No good business
is possible in a poverty stricken unstable society.
7. Having said that, I hasten to reassure the
business community that we do not believe in a
socialistic welfare state where workers are favoured
and businesses are discriminated against.
8. Although the current thinking is that Governments
are superfluous and that the market should be left to
regulate itself, in Malaysia we still believe that
Government has a role to play. The market is not free
from the corruption of power if power is given to it
exclusively. We have seen what happened to LTCM which
nearly brought the financial state of a whole country
to the brink of disaster. The Government had to move
in to prevent this happening. Lately, we have the
Enron case where apparently there was massive fraud and
fixing of accounts. And there are other cases which
make nonsense of the belief that the markets can
regulate themselves and even disciplines governments.
The market needs the Government because the market is
all about making profits while the Government is
concerned about the well-being of the people and the
country as a whole.
9. Governments too can be corrupted. But in a
democratic system, Governments which are corrupted will
not stay in power for long. Obviously a corruption
free Government and a properly regulated and
transparent private sector will give the best results;
will ensure rapid growth of a country. But this is too
much to expect. The Government will have to be checked
by the private sector through refusal to invest and the
private sector will have to endure the regulations and
supervision of the Government.
10. This does not mean that the private sector should
not try to regulate itself; to establish high ethical
standards and to discipline the recalcitrants. The
establishment of guilds in the past was intended to do
this. Members were admitted only if they had a track
record and were willing to subject themselves to the
rules and regulations of the guilds. The granting of a
Royal Charter added dignity and authority to the
guilds.
11. The understanding was that the maintenance of
certain standards would contribute towards business.
Dealing with members of a guild would ensure reasonably
fair prices and good quality. There is a cost to this
of course. But in the end doing business with members
of a respected guild would ensure less risk of being
given a raw deal.
12. Today we do not have guilds of this nature
anymore. We have chambers of commerce which are not
overly concerned about ethics and high standards of
behaviour among the members. In any case, the number
of businesses and businessmen has grown so big that it
is impossible for chambers of commerce to set standards
and to oversee that good practices are maintained by
the members.
13. It has become the duty of the Government to set
standards and to regulate business practices. The
Government is aware of the need to avoid putting
corporations into straight jackets and would want to
minimise regulation as much as possible. With the
cooperation of the business community this can be done.
14. It is for this reason that the Government supports
efforts to encourage good conduct on the part of boards
of directors, corporate managers and management through
conferring awards and general recognition. If these
awards are judiciously given they would help the
business of the corporation concerned.
15. The last financial crisis has showed up the
weaknesses and the malpractices of many public
companies. Yet some companies have been so well
managed that the crisis had hardly affected them. The
crisis has therefore shown the importance of good
management.
16. Good management can be mastered by all. It
requires honesty and skills which can be easily learnt.
Provided that the rules, statutory or otherwise, are
religiously followed, good management should result.
Unfortunately, in the market competitiveness and
profitability require innovation and risk taking. The
rules and standard practices may then be ignored and
risks taken. Sometimes actual fraud may be committed
in the belief that the return will cover the departure
from acceptable practices. When there is a crisis the
expected results may fail to materialise and losses
would reveal the malpractices involved.
17. Supervision over management is therefore
important. The internal audit, the board of directors
and periodical audit by the professional accountants
play a very important role in ensuring ethical
management. Innovative action can still be taken but
it should be in a definable way and within the
regulations provided.
18. The failure of several big public listed companies
following the financial crisis and economic downturn of
1997 -98 has shown the importance of good corporate
governance. The tycoon mentality which has contributed
to the very rapid growth of some corporations and
conglomerates is not necessarily bad but the management
must always be in accord with good corporate
governance. It is important to remember that ownership
of a substantial share in a company does not mean the
interest of the minority shareholders can be ignored.
Together the minority share-holders may own a majority
of the shares and their rights must be protected. In
addition, there are workers whose welfare depends on
good corporate governance.
19. The Government had stepped in to rehabilitate
several major public corporations following their
difficulties mainly in overcoming their loans problems.
This move was castigated by the international press
which labelled this as bailing out apparently
mismanaged companies. If there is any bailout at all
it is the bailout of the workers, the minority
shareholders and the public in general. Of course now
there is not so much criticism of the Malaysian
Government's action. It is so easy to be critical when
something happens to others. But when the same thing
happens in countries associated with the foreign press,
the need for the Government to step in and rescue seems
less like a bailout.
20. In a crisis even the best managed of companies
will fail. Currency devaluation and the collapse of
share prices cannot but affect businesses adversely.
It is easy to say let the fittest survive. Let the
failed businesses be gobbled up by people from
countries not affected by the crisis at a fraction of
the value.
21. But the loss of wealth in a crisis is real and
affects the economy of the country and its future.
Rebuilding an economy is not a matter of adjusting
interest rate alone. A whole lot of measures has to be
taken by the Government and the business community
before the process of recovery can really begin.
22. But of course, good conduct on the part of the
business community is not confined to good corporate
governance alone. The companies and corporations must
also care for the community and the environment.
23. As I pointed out companies do not exist in a
vacuum. They have to operate within the society. A
poor society which is unstable, given to irresponsible
actions will not enable companies and corporations to
thrive, much less to make profits. On the other hand a
stable society which is orderly and law abiding will
enable business to be done at lower costs and therefore
with better profits.
24. A stable society can only be achieved if, among
other things, employers are fair to their workers, and
businesses do not profiteer. In addition, the stable
society needs to be rewarded by companies and
corporations through charitable work and support for
deserving public activities.
25. I am glad that in Malaysia companies and
corporations are by and large responsible and caring.
They do treat their employees well and they do support
deserving causes. There is never an occasion when a
charity dinner for example is not fully supported and
generous donations made by companies and corporations
in Malaysia. Of course some foreign companies are also
generous.
26. There are certain activities which need extra
support. The F1 race and the Tour de Langkawi are not
profitable shows and they cannot be held without
support by the business community. But they are
beneficial for Malaysia and for Malaysian businesses.
They help bring in tourists and sports enthusiasts and
obviously those in the hotel industry stand to gain
much. But more than that, these events help make
Malaysia better known to the world because the events
are fully covered by TV stations worldwide as well as
by sporting and other publications. A one-minute
advertisement on some foreign channels cost as much as
RM 1 million. But the F1 and Le Tour de Langkawi are
viewed by over 350 million people daily for up to 10
days. Le Tour de Langkawi really gives a tour of
Malaysia's beautiful countryside, towns and cities
which help dispel the negative publicity we normally
get.
27. There are other events which can actually help
increase Malaysia's GDP and Per Capita Income and by
extension increase the profitability of Malaysian
businessmen at all levels. Good companies and
corporations should therefore support these events in
one way or another. I am glad that in fact we have
seen much support on the part of Malaysian businessmen
for the numerous Malaysia-promoting events that have
been held in the country.
28. The environment is another area where good
companies can play a positive role in preserving and
promoting. Sometimes there is a conflict between
business and the care for the environment. The
construction industry seems plagued with this conflict
of interests.
29. In Malaysia there is a belief in the convenience
of constructing on absolutely flat land. And so
beautiful hills are levelled in order to fill valleys
and render the site completely flat. The result is
absolute monotony as rows and rows of houses are built
without any care for aesthetics. What good is it to
build in the highlands if you are going to chop down
all the trees and flatten the land. The whole beauty
of the tree-covered hilly lands would be lost. Yet we
are still doing this and making Malaysia a featureless
boring landscape.
30. Industries on the other hand are prone to pollute
the rivers and the atmosphere. Yet with a little
effort and expenditure all these can be avoided. Of
course solid wastes should be properly disposed of and
not dumped on empty land when no one is looking.
31. Malaysia wants to be beautiful. If it cannot
always be so naturally then it must be made beautiful
by deliberate effort. We want the whole of Malaysia to
be beautifully landscaped. The Government expressed
this wish a long time ago. I am glad that people are
responding. Malaysian towns are better looking now
with quite innovative landscaping. Houses in Malaysia
have landscaped gardens and they even landscaped the
road border in front of their houses.
32. Factories used to be built for utility only and so
are buildings. But now efforts are being made to
landscape the grounds and the fronts of the office
buildings in the cities. We think we can do more and
we think that buildings in the cities, Kuala Lumpur
especially, should have floodlighting included in the
building plan. This way on special occasions we can
light up and enhance the attractiveness of the cities.
I believe it is good for business to beautify the city
and companies and corporations will profit from it.
33. Clearly there are lots of things that can be done
by companies and corporations which will gain
recognition for them as good corporate citizens.
Corporate awards by the KLSE are meant to continuously
upgrade the quality of corporations in Malaysia.
34. With better quality of corporations the country
must become better and be more prosperous. And the
prosperity of the country itself will contribute
towards good business for the corporations.
35. Everyone stands to gain from the upgrading of the
business conduct of the corporations. I would like to
congratulate beforehand the recipients for the KLSE
Corporate Awards for 2001. I am sure the awards will
encourage the companies to improve the conduct of their
business and will result in a Malaysia where business
can be conducted with such confidence that it will
attract more businesses. Malaysia cannot but be a most
attractive place for business by both locals and
foreign investors with these awards being given yearly.
36. I would also like to commend all those companies
which had been nominated for the awards.
37. Thus, the KLSE Corporate Awards is a significant
event in the move not only to set excellent standards in
corporate conduct, but to provide models of excellent
corporate conduct for Malaysian companies to follow and
practise.
Sumber : Pejabat Perdana Menteri
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