Corporate Governance Blueprint
A step forward in Malaysia’s journey
in corporate governance
2012 | The
Corporate Governance Blueprint 2011 (CG Blueprint) is premised on
a paradigm that the Corporate Governance Ecosystem should collectively
strengthen corporate governance, reinforce investor trust and confidence
in the Malaysian capital market, and set the basis for a proper
system of accountabilities for sustainable growth.
The Corporate Governance Ecosystem comprises regulators, gatekeepers,
shareholders and board of directors, to strengthen self and market
discipline by internalising the culture of good governance in companies,
managing perception and reputation of stakeholders, and enhancing
the economic value of businesses through long term value creation.
Companies should create strategic boards with the right board balance
and composition. There should also be a sustainable and entrepreneurial
long term business plan, fair and transparent information disclosure
to stakeholders, effective management oversight coupled with a strong
operational leadership and employees.
Enterprise-wide risk and financial and non financial accountabilities
should also be a key consideration. Strategic boards should set
ethical corporate behaviours and accountabilities from top to bottom
– ensuring People, Planet and Profits are considered in managing
What do all of these mean to Human Resource (HR) management? Every
company should have a communication policy to inform employees regularly
on the strategic and operational direction, and performance of the
company. The Corporate Code of Conduct should reflect the corporate
values, ethical behaviours, and compliance culture embraced by the
company. Integrity management, a customer centric ethos and socially
responsible attributes should be engrained in the Code, and this
can be achieved by having occupational, safety and health rules,
whistle blowing and fraud risk reporting processes. The Code should
be disclosed so that outsourced business partners can inculcate
these values in dealing with the company and its stakeholders.
On governance processes, enterprise-wide risk, risk appetite and
allowable risks, how risks impact their daily work and corporate
dealings should be communicated to employees. Stakeholders, like
employee unions, should not be allowed to disrupt operations, and
cause disrepute to the company, therefore requiring harmonious industrial
Investor relations involve dealing with investors and other stakeholders
on an array of issues from products and services to shareholder
rights. Therefore, the corporate structure with the right people
to manage complaints, suggestions and feedback is an HR responsibility.
Two major areas on HR strategy require attention in the CG Blueprint.
Remuneration policies should be competitive for employees, and pegged
to long term corporate performance for the Chief Executive Officer
and senior management. A possible agenda item for discussion when
engaging with shareholders is the need to know who the real management
team is. I believe that the operational leadership provided by the
C-suite is critical for corporate performance and providing the
right level of information to Boards to facilitate informed decision-making.
HR as a leader has to provide feedback on HR issues to the Board
Diversity should necessarily be an HR strategy and Policy, ensuring
appropriate balance in gender, ethnicity and age to populate the
operational and management roles not only to meet succession planning
requirements, fulfil corporate expertise requirements internally
and also for growth. Women should be groomed to senior management
levels and to potentially assume Board positions, thereby fulfilling
a national call to increase women participation in Boards to 30%
The Corporate Governance Blueprint 2011 sets out the strategic direction
and specific action plans to be implemented over the next five years,
a deliverable under the Capital Market Masterplan 2.
Regulators have stepped up enforcement, and recently court judgments
have been less lenient with Chief Financial Officers and directors
who sway from their corporate accountabilities and fiduciary duties.
The oversight on gatekeepers - rating agencies, external auditors
and corporate analysts - to avoid risk of misleading disclosures
on company financials and long term sustainability to safeguard
investors and other stakeholders, is progressively increasing. The
media and financial journalists as influencers are working towards
active yet responsible reporting. The CG Blueprint reinforces corporate
citizenship, sustainability and value creation in tandem with globalisation
worked in insurance companies and banks for more than 18 years.
Her extensive experience in operations, internal audit, investigation
and risk coupled with leadership, drive and passion for good
governance, control and corporate behaviours has seen her through
a series of commendable achievements in the appointments that
she has held. One of these achievements is a 90 page Treasury
policy she wrote after three months in the job and the first
such policy for a Bank that had been in operation for more than
The President of the Institute of Internal Auditors Malaysia
(IIAM) in 1996/97, Vijayam was also instrumental in setting
up training courses for internal auditors in banks and finance,
stock broking and insurance companies. Currently, she runs
training programmes on risk-based topics, corporate governance,
corporate reporting and ethics.
A Fellow member of CPA Australia and IIAM, and a chartered
accountant of MIA, Vijayam holds an LLB as well.