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MGM 4136 CURRENT ISSUES IN MANAGEMENT

MGM 4136 CURRENT ISSUES IN MANAGEMENT. PREPARED BY. LECTURER:. MADAM HAMIMAH HASSAN. P rocesses. Policies. People. Internal system. What is CORPORATE GOVERNANCE ?. Rules A nd Regulation. Good Business Practices. N eeds of Shareholders and S takeholders. Creating and

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MGM 4136 CURRENT ISSUES IN MANAGEMENT

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  1. MGM 4136 CURRENT ISSUES IN MANAGEMENT PREPARED BY LECTURER: MADAM HAMIMAH HASSAN

  2. Processes Policies People Internal system What is CORPORATE GOVERNANCE ? Rules And Regulation Good Business Practices Needs of Shareholders and Stakeholders

  3. Creating and Delegating Authority Access to Capital Why ? CORPORATE GOVERNANCE Is Important Developing clear policies and procedures Reputation Management Reduce Risks, Mismanagement and Corruption

  4. Good Corporate Governance • eliminate principal-agent problem • ensure investors receive adequate return • guideline on how company is managed

  5. 7 characteristic of good governance Participation • By both men and women is a basis of good governance • Participation could be either direct or indirectly Rule of law • laws, regulations and codes of conduct should be fair and enforced impartially, particularly the laws on human rights

  6. Transparency • decisions taken and their enforcement are done in a way that follows rules and regulations. • that information is freely available and directly open to those who will be affected by such decisions and their enforcement Responsiveness • Institutions and processes try to serve all stakeholders quickly or within a reasonable timeframe. Consensus oriented • should take into consideration each stakeholder members’ opinions and benefits to reach a broad consensus on what is the best interest of the group, on policies and procedures.

  7. 6. Effective and efficient • that the processes and institutions produce desirable results that meet the needs of the society, while putting the resources at their best use. 7. Accountability • key requirement of good governance • Not only governmental institutions but also the private sector and civil society organizations must be accountable to the stakeholders and public

  8. Advantage of Corporate Governance Practices leads to a better system of internal control Practices can pave the way for possible future growth Provide shareholders with greater security on their investment Ensures that shareholders are sufficiently informed on decisions concerning fundamental issues

  9. Disadvantage of Corporate Governance • Costs of Monitoring • Requires individuals that have a collective vision for the • company to pour more money into that company to gain a • controlling share • This process can be highly political, since controlling • shareholders that sense a hostile takeover may attempt • to buy up more

  10. ISSUES RELATED WITH CORPORATE GOVERNANCE IN MALAYSIA 1) Malaysia Airline Systems(MAS) MAS had already suffered huge debts caused by TajudinRamli. Destinations were not popular or less concentrated areas. Sold nine of aircrafts costing RM10 billion at a price of RM14 billion.

  11. 2) Sime Darby Improper management of projects in the sector of Sime Darby up to RM 1.6 billion total loss. Most of the losses are down to ill-advised investments in the energy and utilities sector in Qatar and Bakun Dam in Sarawak. Sime Darby management tried to hide the losses incurred in Qatar and Bakun Dam.

  12. Malaysian Code on Corporate Governance The introduction of the new MCCG in 2012 by the Malaysian Securities Commission marks the first major deliverable following the implementation of the Malaysian Corporate Governance Blueprint in 2011, a 5-year plan which seeks to further improve corporate governance standards in Malaysia.

  13. Principle in MCCG 1.Code of Ethical Conduct and Board Charter 2.Independent Directorship 3.Poll Voting 4.Strategies on Promoting Sustainability 5.Continuing Education Programs 6.Commitment of Board of Directors 7.Corporate Disclosure Policies and Procedures 8.Use of information technology

  14. THANK YOU. Q & A

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