Malaysians are complacent in business practices
Akhbar Satar 

THE corporate world is undergoing such rapid changes that businesses are hard pressed to adapt to a continually changing social, political, economic and technological environment.

One of the most pressing issues being faced is business integrity. It is a subject that attracts a lot of attention as a result of the heightened public awareness that bad governance, whether in the corporate or public sector, contributes directly to bribery and corruption.

There are ample evidence and studies that corruption distorts development, undermines and compromises a society’s integrity, and disrupts market operations.

In the process, it deprives ordinary citizens of those benefits that should properly accrue to them. What can we do to confront the issue?

We need to begin by closing windows of opportunity for corruption, and this can be done by examining and reviewing the existing legal framework, systems and practices with a view to rendering them more effective and transparent.

The corporate sector, too, has an important contribution to make to this process. It is, after all, the engine that provides the primary thrust for economic growth.

No effective governance reform programme can be introduced, let alone sustained, against the rear-guard action of the corporate community.

The business community must take the lead to promote best practices and ensure that transactions are regulated domestically and internationally.

More to the point, it is about what the corporate world can do as a group to bring about change for the better and raise the level of awareness concerning the insidious nature of doing business corruptly.

It is also about making Malaysia a country of choice for international trade, where policy predictability and ethical business transactions are expected and guaranteed.

Towards this end, the Business Integrity Country Agenda (BICA) is a very important research and reference point for fighting corruption in business practices around the globe, including Malaysia.

The BICA has already been announced in Cambodia, Italy, Mozambique and Turkey. The BICA project adopts a multi-stakeholder approach, where a national advisory group is formed at the outset of this assessment.

Transparency International Malaysia has launched its very first BICA assessment report on March 13. It is the fifth country to do so.

Aimed at enhancing national level business integrity, the BICA assessment report is a baseline assessment of the public, private and civil society sectors’ efforts to promote integrity in business practices and create a body of evidence on this in various countries.

BICA is a widely shared agenda for reform and acts as a collective momentum for enhanced business among key stakeholders.

Malaysians generally have a complacent attitude towards having the right business practices.

If a certain practice for good business governance and management is not made mandatory by law and the authorities, Malaysian companies would not usually adopt the suggested practices. Only when it becomes a compulsory rule or law that they strive to comply.

The BICA report seeks to further understand the factors and actions that can increase business integrity in the country in order to facilitate public, private, and civil society efforts to reduce corruption.

Fifteen thematic areas were assessed for the purpose of the report. Each was given a score of between 0 and 100.

A full score of 100 indicates that all requirements under the United Nations Convention Against Corruption (UNCAC) were met.

Malaysia has scored well in the BICA report in that part of the indicator that deals with public sector legislation.

Laws prohibiting bribery of public officials, commercial bribery, laundering of criminal proceeds and collusion received a full score of 100.

Although the scores indicate that there are comprehensive laws to address these areas, the enforcement of these laws scored just 50.

The overall findings of the BICA report indicate that reform is needed in many key areas in order to raise the level of integrity among businesses and improve the overall context in which they operate.

Expediting the inclusion of corporate liability provisions in the MACC Act 2009 and addressing the weaknesses in the Whistleblower Protection Act 2010 are among key concerns that the government needs to address.

Regulators having oversight over companies need to encourage businesses to adopt and practice policies and systems that mitigate corruption risks.

Also, regulators have to foster a culture of “clean business” based on self-driven efforts taken by all corporations, including SMEs and Non-PLCs.

It is noted that Malaysians generally have a very complacent attitude towards implementing the right business practices.

If a certain practice for good business governance and management is not made mandatory by the law and authorities, Malaysian companies do not usually adopt the suggested practices.

It is only when the practice is made compulsory by laws and regulations that companies will feel compelled to comply.

Malaysian businesses need to move beyond compliance to sustain themselves and attract investors.

Media and chief security officers also need to monitor and engage with the private business sector.

Following the release of the BICA report, TI-M hopes to collaborate with relevant enforcement agencies, regulators, business associations and other stakeholders to see how the recommendations can be implemented.

The proposal to include corporate liability provisions in the Malaysian Anti-Corruption Commission (Amendment) Bill 2018 tabled in Parliament on March 26 was a good move.

No change or improvement in the way we manage our business operations can be sustained if our attitude to good governance is out of step.

This applies to government and corporate leadership. Good governance, like integrity itself, has today become a global business necessity.

Negative perceptions must be reversed if Malaysia expects to remain in the mainstream of the global economy.

Our standing in the world community is determined largely by how we stack up against universally accepted best practices in governance.

Datuk Akhbar Satar is the director of Institute of Crime & Criminology, HELP University, a criminologist and certified fraud examiner. Comments:

This article first appeared in Focus Malaysia Issue 279.