Embrace Business Sustainability, M'sian Corporates Urged

By Mikhail Raj Abdullah and Farhana Poniman KUALA LUMPUR, May 24 (Bernama) -- Malaysian companies must make responsible business decisions that not only fulfill profitability objectives, but also benefit shareholders, stakeholders and more importantly, society at large. "We need to recognise that any business is part of society and must contribute towards its sustainability," Professor Dr David Crowther, a professor of Corporate Social Responsibility, said Wednesday. Cultural and historical background are no excuses, be it in Malaysia or any part of the world, as rules of business sustainability and corporate governance are applied universally. "Business sense is business sense everywhere," he said. Investors like companies which are transparent in their business operations, while clients and customers can make or break a company, said Crowther, who is also Head of the Centre for Research into Organisational Governance at De Monfort University, United Kingdom. It was often considered incompatible for businesses to be profitable for shareholders, while at the same time, being good citizens within society for stakeholders and protecting the environment. "People think you can't do all of these. This is completely wrong. A good and sustainable business is profitable and an integral part of society as it cares about the environment and does not solely concern profitability," he told Bernama in an interview. He said this ahead of the "Malaysian Forum on Business Sustainability", where he will present viewpoints on, "Governing Performance & Profits: Stakeholders vs Shareholder Perspectives." Organised by the Minority Shareholder Watchdog Group (MSWG) in strategic partnership with Perception Management International, the one-day forum on Wednesday will see industry players sharing best practices while addressing issues on governance and its link with sustainable enterprise. Crowther, who has published many works, including 40 books and almost 400 articles, said sustainable business involves making decisions tied to creating continuous profits in the long term. However, he lamented that when a business is doing well, everybody forgets about the application of corporate governance. "Everybody takes their eyes of the ball when times are good (and) when you look at what has been evident with banks over the last four years, that is exactly what happened." "There is the assumption that risky businesses are good bets because they are going to be profitable, (but) common sense tells you, that can't be the case," he said. He also said in corporate governance, there should be procedures in place and effective enforcement, so that you don't get people like (rogue trader) Nick Leeson, destroying the bank with gambling activities. Citing the United States, he said 30 per cent of share option rewards was given to business managers for their good, bad and indifferent performance...this is theft, as they have no incentive to give good advice," he added. Obstacles in the way of good corporate governance and business sustainability includes the lack of enforcement by regulatory authorities, political interference, detached board of directors, and management not providing enough information so that malpractices can be detected. Crowther said companies think it would cost them money in being responsible. "But what it actually does is create a different long-term profit and revenue stream for future benefits, he added. -- BERNAMA