BOARDROOM CONDUCT

AND BEHAVIOUR
OUTLINE OF THE ISSUES
 Why Corporate Governance and Ethics
Building an Effective Board. Matter (Part III): Building an Effective Board.

Building an effective board is a difficult task for any company. It need a  PM Najib Outlines Three Principles To Resolve
variety of skill sets and this vary from one board to the next.For boards to be FGV Crisis.
effective, it is important to remember the significance of dissent in the  A crime that takes two to Tango
boardroom. Historically, the dissenter in the boardroom has not always been
 Dealing with Dispute in the Boardroom
a welcome presence. However, in today’s environment, there is a special
need for a dissenter to make sure that the board has considered the various  Boardroom tussle intensifies at Stone Master
points of view on the significant issues. As a general policy, directors are not
 Carillion: 6 key issues that will keep rolling in
liable for making wrong decisions, but they can be liable for not giving
boardroom
enough thought or consideration to all aspects of a matter. In Ghana, the law
of willful causing financial loss to the state can be applied (Boards of public  Chris Corrigan issues a defence of capitalism
entities) if there is no serious and robust debate looking at all angles of a during brief return
decision. A dissenter within the boardroom helps to ensure that all angles
 Former Prostaco Berhad director claim trials
are considered, obviously within the context of confidentiality and cordiality to cheating, involving nearly RM85 million.
necessary for a well-functioning board.
 Integrity in the Boardroom: What Does It
Appiah, O. (2018, April 22). Why Corporate Governance and Ethics Matter Really Mean?
(Part III): Building an Effective Board. Retrieved on May 22, 2018, from
 AMP, CBA scandals threaten 'cosy' boardroom
https://www.modernghana.com/news/850329/why-corporate-governance-
and-ethics-matter-part-iii-build.html
”As according to Malaysian Code on Corporate Governance 2017 in principle A, The board is collectively responsible
for the long term success of a company and the delivery of sustainable value to its stakeholders. In discharging its
fiduciary duties and leadership functions, it is imperative for the board to govern and set the strategic direction of
the company while exercising oversight on management. The board plays a critical role in setting the appropriate
tone at the top, providing thought leadership and championing good governance and ethical practiced throughout
the company.”

Integrity in the Boardroom: What Does It Really Mean?

An effective board is concerned about integrity inside and outside the
boardroom. In the Deloitte Governance Framework, integrity is identified as one
of the five critical governance elements within which the board has a heightened
level of responsibility. The board's role in maintaining integrity includes working
with the CEO to establish the right tone at the top, understanding compliance
requirements and establishing expectations for senior management, which then
cascade to the entire organization. Board governance structures and practices
should promote a corporate culture of integrity and ethics, coupled with
corporate, environmental and social responsibility. Integrity in the boardroom is
based on factors such as organizational values, the need to uphold the board’s
fiduciary responsibilities and a willingness to be accountable
Deloitte, (2013, May 17). Integrity In The Boardroom: What Does It Really
Mean? The Wall Street Journal. Retrieved on May 22, 2018, from
http://deloitte.wsj.com/riskandcompliance/2013/05/17/integrity-in-the-
boardroom-what- does-it-really-mean/
 BOARD CONDUCT ISSUES
Former Prostaco Berhad director claim trials to cheating,
involving nearly RM85 million.

Prostaco Berhad is a public company that listed in Bursa

Dato’ Sri Najib Outlines Three Principles To Resolve
Malaysia. The issues that had arises in this company is when
FGV Crisis, Wants Issue To Be Settled During This
Datuk Ooi Kock Aun, director of Protasco Bhd. was charged in
Ramadan.
the Ampang Session Courts for cheating perjury and criminal
breach of trust involving nearly RM85 million. He was alleged
FGV or Felda Global Venture Holding Berhad is one of
to have cheated the board of directors and officers of Protasco
the company listed in Bursa Malaysia. The FGV
Bhd. by purposely hiding the information that he had interest
in an Indonesian-based company, PT Anglo Slavic. The boardroom tussle began when its group president and
acquisition of the shares would not be entered into the CEO Datuk Zakaria Arshad and three other officers
agreement by Protasco Bhd. if it had not been deceived by the were asked to take an indefinite leave of absence
accused. (Nazlina, 2016). pending an internal probe into alleged wrongdoings
involving several million ringgit between FGV
Nazlina, M. (2016, February 03). Former company director claims
subsidiary Delima Oil and Safitex, an Afghan. Dato’ Sri
trial in cheating case involving RM80mil. Retrieved from
Najib Tun Razak had comment on the issues and outline
https://www.thestar.com.my/news/nation/2016/02/03/courts-
former-company-director-charged/ the three principles to solve this issues. He said that one
of the principles is the investigation need to comply
with company’s law which is Company Act 2016 to
resolve this issues. The second principle is to follow the
good governance principles and the third one is
ensuring the outcome of the investigation process must
have undergone fairly. (Bernama, 2017)
Datuk Ooi (left) and Datuk Tey speaking to the media during EGM
Sources: The Star Bernama. (2017, June 10). PM Najib Outlines Three
Principles To Resolve FGV Crisis, Wants Issue To Be
Boardroom tussle intensifies at Stone Master Settled During This Ramadan. Bernama.com.
Retrieved May 11, 2018, from
The boardroom tussle at PN17 Company which is Stone Master http://www.bernama.com/en/business/news.php?id=1
Corp Bhd is heating up with the current board of directors 363507
serving its two largest shareholders with a claim totalling
RM1.38bil for allegedly breaching their fiduciary duties. The
two largest shareholder are Datuk Karen Lee Fong Yin @ Lee
Vun Ya and Datuk Eii Ching Siew, who holds a 22.29% and
9.45% stake in the company respectively. According to Datuk
Koh Mui Tee who is managing director, he claimed that they
had rejected a business turnaround plan and it had allegedly
disrupted the revival of the loss-making marble and granite
product manufacturer. Datuk Karen Lee Fong Yin had called
for an Extraordinary General Meeting to remove Datuk Koh
Mui, Datuk Lee Hwa Cheng (executive director) and the
remaining eight directors from Stone Master’s board. During
the meeting, reporters could not gain access into the EGM but
loud arguments were audible from the meeting room.

Ali, S. M. (2017, May 31). Boardroom tussle intensifies at Stone

Master. The Star Online. Retrieved May 12, 2018, from
https://www.thestar.com.my/business/business- DS Najib comment on the issues of FGV
news/2017/05/31/boardroom-tussle-intensifies-at-stone-master/ Sources: Bernama
 BOARD CONDUCT ISSUES
Chris Corrigan issues a defence of capitalism during
brief return.
Curiously, the latest draft of the proposed ASX
governance rules includes this new idea: “A listed
entity should have a board of an appropriate size,
composition, skills, commitment and knowledge of the
entity and the industry in which it operates, to enable
it to discharge its duties effectively and to add value.”
The absence of this rule tells you that corporate fads
have dislodged the core purpose of a board, and pity
help the shareholders. Corrigan’s finely tuned
corporate antennae about mediocre boards are
reflected in research by Peter Swan from UNSW that
confirms more “independent” directors have
delivered poorer, not better, corporate governance.
Then, in October 2016, a letter from Ian Silk, chief
executive of Australian Super, a shareholder, reminded
Corrigan that Australian Super had a policy towards
companies without a commitment to gender diversity
to “vote ‘against’ one director seeking re-election
each year in the following priority: (i) board chair; (ii)
nomination committee chair; (iii) longest serving
member of the nomination committee up for re-
election; and (iv) longest serving member of the board
up for re-election”. (Janet albrechtsen)
Albrechtsen, J. (2018, May 19). Chris Corrigan Issues a
Defence of Capitalism During Brief Return. Retrieved
on May 22, 2018, from
https://www.theaustralian.com.au/news/inquirer/chris
-corrigan-issues-a-defence-of-capitalism-during-brief-
return/news-
story/4f9845c29927115567de341af5d237cf
Former Qube chairman Chris Corrigan.
Sources Picture: Hollie Adams.
AMP, CBA scandals threaten 'cosy' boardroom
The Australian Shareholders Association has "long been
concerned about directors having too many board
positions to have sufficient time to deal with company
matters, particularly in times of crisis", says ASA CEO Judith
Fox. The Australian Shareholders Association has "long
been concerned about directors having too many board
positions to have ... The Australian Shareholders
Association has "long been concerned about directors
having too many board positions to have sufficient time to
deal with company matters, particularly in times of crisis",
says ASA CEO Judith Fox. Michael Findlay "We are yet to
see any findings from the royal commission and I am sure
there will be a squillion recommendations but as we sit
today I think that APRA report is the new benchmark." Too
many roles, too little time and too few directors doing too
much? According to Ownership Matters of the 1721
directors that sit on ASX boards one, Robert Millner, has
seven positions, eight directors have five and 126 have
three seats.
Evans, S., Durkin, P. (2018, May 18). AMP, CBA scandals
threaten ‘cosy’ boardroom club. Retrieved on May 22,
2018, from http://www.afr.com/business/boardroom-
battles-farewell-cushy-directorships-hello-trouble-
20180517-h10668
A crime that takes two to Tango
Corrupt practices create an unfavourable business
environment that promotes anti-competitive practices,
give unfair advantages and enables organised crime to
flourish. Recently, MACC has hosted the “Corruption
Prevention in Private Sector”as it believes that member
countries had managed to share important strategies,
policies, best practices and experiences in dealing with the
issue of bribery and corruption in the private sector. The
MACC has, as part of its initiative in fighting corruption,
obtained more than 500 corporate entities in the private
and public sectors to sign the Corporate Integrity Pledge
(CIP).In this context, the MACC has the expectation for
the board of directors should, as part of their corporate
governance responsibility, prescribe that the compliance
of the CIP be audited annually.
Tan Sri Abu Kassim Mohamed. (2014, December 9). A Crime
That Takes Two Tango. New Straits Times. Retrieved on April
4, 2018, from https://www.nst.com.my/news/2015/09/crime-
takes-two-tango
 BOARDROOM CONDUCT
ISSUES
Carillion: 6 key issues that will keep rolling in boardroom
As the report argued: “The lack of meaningful competition
creates conflicts of interest at every turn.” Corporate culture
in the dock Carillion could “happen again, and soon” the
report warned, unless the government tackles wider
problems around corporate accountability but given
Interserve’s well-documented woes, will the government
face renewed pressure to act on this recommendation?
Fairer payment system? Carillion’s supply chain has borne
the brunt of its demise, and the firm’s alleged treatment of
many subcontractors prior to its collapse drew severe
condemnation. “A deeper engagement with the business at
all levels is required, to gain an understanding of the
company’s culture (for example, with regard to the
timeliness of payments) and to enable any concerns
affecting government contracts to be detected and
escalated early,” the report said. It added: “This review
should consider whether devoting more resources to liaison
with strategic suppliers would offer better value for
taxpayers.” Following Carillion’s collapse, the government
said it was “in regular discussions” with all its suppliers over
their financial health. How will the government and
regulators respond to this latest kicking? Big Four break-up?
Calls to break up the so-called Big Four accountants have
gathered pace this year – and the Carillion report adds to
those voices. (james wilmore)
Wilmore, J. (2018, May 16). Carillion: 6 Key Issues that
Will Keep Rolling In Boardroom. Retrieved on May 22,
2018, from
https://www.constructionnews.co.uk/companies/contracto
rs/carillion/carillion-6-key-issues-that-will-keep-
rolling/10031082.article
Dealing with Dispute in the Boardroom
An effective board seeks to stimulate the flow of ideas,
identify key issues, consider alternatives and make
informed decisions. Each director need to bring to the
boardroom their own particular skills, knowledge and
experience, and has a duty to apply that skills, knowledge
and experience. Such disputes must be dealt with as soon
as possible, since if left unresolved, they can undermine the
board’s effectiveness and the organization’s performance.
In further discussing boardroom disputes, it is necessary to
distinguish them from specific types of disputes that may
involve the board such as shareholder disputes or a clash
over related-party transactions – these require legal advice.
Instead, there are simple ways that can help the board to
resolve disagreements and in some cases prevent some
conflicts altogether by creating a productive board
environment. The simple ways are such as clarify the roles
of the board and management including the roles of the
chair, CEO and individual.
Beck, J. (2015, July 13). Dealing with Disputes in the Boardroom.
Retrieved on April 15, 2018, from
https://betterboards.net/relationships/dealing-disputes-
boardroom/
A crime that takes two to Tango
Corrupt practices create an unfavourable business
environment that promotes anti-competitive practices, give
unfair advantages and enables organised crime to flourish.
Recently, MACC has hosted the “Corruption Preevention
in Private Sector”as it believes that member countries had
managed to share important strategies, policies, best
practices and experiences in dealing with the issue of
bribery and corruption in the private sector. The MACC
has, as part of its initiative in fighting corruption, obtained
more than 500 corporate entities in the private and public
sectors to sign the Corporate Integrity Pledge (CIP).In this
context, the MACC has the expectation for the board of
directors should, as part of their corporate governance
responsibility, prescribe that the compliance of the CIP be
audited annually.
Tan Sri Abu Kassim Mohamed. (2014, December 9). A Crime
That Takes Two Tango. New Straits Times. Retrieved on April
4, 2018, from https://www.nst.com.my/news/2015/09/crime-
takes-two-tango