Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
LECTURER:
PUAN RUHANA BT HAJI BUSU
Prepared by:
Wong Yoke Pui 147722
Seow Fun Yin 147836
Oh Shiek Ching 147839
Lee Inn Hui 147968
Ngor Siew En 150114
Definition
people, and makes sure the needs of shareholders and other stakeholders are met in
full. This will be accomplished by directing and controlling managing activities using
governance helps to prevent corporate scandals, fraud, and potential civil and criminal
liability of the organization. A good corporate governance image will enhances the
Good corporate governance will ensures the accountability of certain individuals such as
investors receive adequate return and guideline on how company is managed or governed
1. Participation
to public goods and services and also allocating resources that unfair by
stakeholders. It varies from one context to another and subject to different kind of
2. Rule of law
Good governance require laws, regulations and codes of conduct should be fair
and enforced impartially, particularly the laws on human rights. The helpful ways
3. Transparency
Transparency means that decisions taken and their enforcement are done in a way
that follows rules and regulations. It also means that information is freely
available and directly open to those who will be affected by such decisions and
their enforcement. It also means that enough information is provided and that it is
4. Responsiveness
reasonable timeframe.
5. Consensus oriented
and benefits to reach a broad consensus on what is the best interest of the group,
only seek agreement of the majority, but also to resolve the objections of the
minority with the ultimate goal to achieve the most agreeable decision. In other
words, grassroot democracy shall be achieved. A deep understanding of the
A society’s well being depends on ensuring that all its members feel that they
have a stake in it and do not feel excluded from the mainstream of the society.
This requires all groups to have opportunities to improve or maintain their well
being. It includes designing mechanisms, policies, or processes that are fair for all
stakeholder members where each and every one of them is given equal chance to
Good governance means that the processes and institutions produce desirable
results that meet the needs of the society, while putting the resources at their best
use. Being effective which means providing what the community needs, in which
8. Accountability
governmental institutions but also the private sector and civil society
efficient and effective organizations. So how accountability comes into the picture
politicians and public servants are given enormous power through the laws and
regulations they implement, resources they control, and they organizations they
accountability in organizations.
• Good corporate governance practices can pave the way for possible future growth,
nationally or abroad.
• Better corporate governance can also provide shareholders with greater security
on their investment.
shareholders.
• It was found out that more than 84% of the global institutional investors are
willing to pay a premium for the shares of a well-governed company over one
• Costs of Monitoring
with one voice and have enough votes to allow that voice to have any real weight.
This 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 shares to stay in power and keep the minority party silent.
Corporate governance at this level could grind to a halt, driving stock prices lower
Family-Owned Companies
are in the best interest of the company. For example, Ford and
Current issues
the police and the Malaysian Anti-Corruption Commission spent about three years to
charge several people including former Transport Minister Tun Dr Ling Liong Sik with
cheating the Malaysian government by misleading the Cabinet on the land acquisition for
Dr Ling is accused of dishonestly hiding the fact that the valuation by the
charge, the fraud was committed with the knowledge that he could cause a loss to the
Malaysian government, where he had an interest in the transaction pertaining to the fraud
Parliament is entitled to know what were the reasons which caused the PKFZ land
question, which has landed the country with a RM12.5 billion PKFZ scandal. It noted
that three months after the formation of the Super Task Force, several people were
charged for their alleged role in the PKFZ scandal. The Ministry of Transport also said
that they will make sure the PKFZ scandal will be clearly and hoping that corruption is
being checked and justice is being restored. The Port Klang Free Trade Zone (PKFZ)
fraud not only will bring bad effect to the country's economic growth, public trust, the
The RM12.5 billion Port Klang Free Zone (PKFZ) scandal as it represented a
major step backwards in public accountability and good governance. PKFZ’s
management should have known that the risk of misappropriation. PKFZ scandal caused
Malaysia’s has suffered the ignominy of the worst ranking and score in 15 years in
Transparency International (TI) Corruption Perception Index (CPI) .Therefore, good
corporate governance is very important helps to prevent corporate scandals, fraud, and
potential civil and criminal liability of the organization.
Case 2: Sime Darby suit against ex CEO and two others over Bakun
project
A recent news report states that there major projects in the sector of Sime Darby,
due to improper management of these projects led to repeated extension and cost
overruns, prompting the company to withstand up to RM 1.6 billion total loss last year.
For the coming six months, government is estimated need to allocate 900 million
provisions for the losses. Most of the losses are down to ill-advised investments in the
energy and utilities sector in Qatar as well as tardy business practices in the development
The Bakun Dam project at Sungai Balui, Sungai Rejang, Sarawak, is the largest
hydropower project in Malaysia. Sime Darby is in the midst of preparing for a civil suit
against those responsible for the company losses. Thus, Sime Darby Bhd and its three
subsidiaries have filed another civil suit against its former group chief executive Datuk
Seri Ahmad Zubir Murshid and two others for restitution of RM90.5mil relating to the
Bakun Dam project. The other two defendants are former head of the group’s energy and
utilities (E&U) division, Datuk Mohamad Shukri Baharom, and former E&U division
chief financial officer Abdul Rahim Ismail. This case reflects very badly on the
management and corporate governance of Sime Darby that lead to the losses.
In our opinion toward this case, Sime darby failed to comply the principles
of corporate governance that caused to the losses. Sime Darby management tried to hide
the losses incurred in Qatar and Bakun. The amount for cost over-runs of the projects was
much higher.
We think that Sime Darby not only against the principles of good governance but
also breached the various laws. We are also questioned how plantation-based Sime Darby
could post such huge losses when it enjoyed financial and political support from the
government. It also need to highlight that faulty corporate governance and risky
investments as factors behind Sime Darby’s historic losses.
The first rule of Corporate Governance is to have capable people who are also
competent and with integrity to manage a company. Malaysia need to take serious in the
selection of candidates to take the responsible. Besides that, awareness towards
importance of corporate governance will improve economy performance in Malaysia.
References
http://en.wikipedia.org/wiki/Corporate_governance#Principles
http://www.corporategovernancedefinition.net/
Topics/Corporate_governance/An_overview_of_corporate_governance
http://www.gdrc.org/u-gov/doc-oecd_ggov.html#Accountability
http://siteresources.worldbank.org/PUBLICSECTORANDGOVERNANCE/Resourc
es/AccountabilityGovernance.pdf
http://www.unescap.org/pdd/prs/ProjectActivities/Ongoing/gg/governance.asp
http://www.metagora.org/training/encyclopedia/governance.html
http://www.reform.gov.bb/page/GOOD_GOVERNANCE.pdf
http://www.swview.org/blog/seven-characteristics-corporate-governance
http://www.malaysia-today.net/mtcolumns/letterssurat/33654-who-is-at-the-root-of-the-
pkfz-scandal-tun-dr-ling-liong-sik-or-tun-dr-mahathir-mohamed
http://www.unescap.org/pdd/prs/ProjectActivities/Ongoing/gg/governance.asp
http://www.reform.gov.bb/page/GOOD_GOVERNANCE.pdf
http://mba.zainbooks.com/terms/hrm/eight-major-characteristics-of-good-
governance.shtml
http://www.metagora.org/training/encyclopedia/governance.html
http://www.gdrc.org/heritage/tugi-culturalheritage.pdf
reference:
http://www.ehow.com/list_6523092_disadvantages-corporate-governance.html
http://www.ehow.com/list_6058186_benefits-corporate-governance_.html
http://www.bsse.sk/Content/EN/Issuers/Corporate_Governance.lst/mervyn_aj.htm?
LANG=EN
http://www.mysinchew.com/node/49174
http://pkfz-scandal.org/2009/12/11/pkfz-details-of-charges/
http://www.mysinchew.com/node/37925
http://www.mysinchew.com/taxonomy/term/87?page=2
http://www.sinchew-i.com/sciWWW/taxonomy/term/426?page=11
http://www.csrdigest.com/2010/05/sime-darby-probes-bakun-dam-losses/
http://www.themalaysianinsider.com/malaysia/article/pakatan-questions-sime-darbys-
corporate-governance/