Toyota Under Fire From Malaysian Consumer Organisation
February 19, 2010 by admin
Filed under News Bites
While earlier news reported that UMW Toyota Motor will be initiating a special service campaign to address the brake issue of Toyota Prius., the Consumer Association of Penang (CAP) has taken the local distributor of the Japanese brand to task.
Malaysiakini has reported to that CAP has detected faulty steering rack ends in at least two Vios models. This defect apparently causes the front wheels to go badly out of alignment.
However, UMW Toyota Motor Sdn Bhd (UMW), the sole Malaysian distributor, claims that this is not a manufacturing defect. UMW was reported to have said that the alleged defects were caused by “an external impact to the front left tyre with sufficient force (which caused) the steering rack to bend backwards.”
Nevertheless, CAP President, SM Mohamed Idris, stated that, in the case of the first car, the steering rack end had bent upwards when the car started moving from a motionless position, while the second car’s steering rack broke into two as the car stopped at a T-junction.
UMW has been reported to have maintained silence on inspection reports by Automobile Association of Malaysia (AAM) and Goodyear Marketing and Sales submitted by CAP. Both reports are said to have found no sign of external impact or evidence that the vehicles were speeding.
The CAP President added that Toyota Japan has placed the onus on UMW. These allegations come in the wake of worldwide recalls of seven Toyota models last year, including the Vios, for defects found in the accelerator and brake systems and power steering hose.
However, UMW issued an official statement in January, reassuring customers that Toyota Japan had cleared all models distributed in Malaysia of similar problems. According to Malaysiakini, the distributor was unavailable for comment, being closed until 22 Feb 2010 for Chinese New Year.
Meanwhile, in the USA, it was reported that a US House panel yesterday subpoenaed confidential company documents that a former Toyota lawyer has said prove the automaker routinely concealed evidence from the courts and federal regulators.
Welcome on Board, Stateholder; Corporate Governance Reform Needs You!
By Robert Gogel and Professor Ludo Van der Heyden
Courtesy of INSEAD Knowledge
The world is still waking up to the vast amount of capital injected by its governments into the “private economy” over recent years. The US and UK led the way, but other countries were close behind – with varying degrees of transparency and motivation. Whether the companies concerned are now semi-private or semi-public depends on your point of view. One thing is certain: these organisations will remain in the public eye for some time. And their actions will largely contribute to restoring public trust in corporations and the financial markets. Or not, as the case may be.
To a diehard capitalist, nationalisation instantly conjures up nightmare visions of communism or military rule. It’s far more palatable to talk of governments “taking equity warrants or senior debt positions in financial institutions for as short a period as possible”. However, the reality is that average Americans are now collectively bailing out icons of US capitalism like Goldman Sachs and Bank of America. It’s an entirely new concept, which has been called – with a sad twist of irony – “trickle-up economics”.
In a more positive spirit, we too propose a new term: “stateholder” – to recognise the broader and more permanent public mandate of the government stakeholder. For we believe that fundamental reform is needed to restore and maintain public trust in financial markets and corporations. This reform will have to specify the role of the state as a key and distinct stakeholder in the financial system. Returning to the situation before the meltdown is simply not a desirable option, even if it were possible.
But what is the proper role of the stateholder in the new financial order? What is the best way to oversee this new organisational phenomenon, the stateholder-run enterprise? Should stateholders act differently from individual and institutional shareholders and, if so, what will be the impact on corporate performance?
While it is too early to give definitive answers to these questions, we can offer four simple recommendations to guide stateholders – in order that the world may again see corporations and financial markets as serving the public interest.
1) Governments must commit to active and fair governance of capital markets
The stateholder did not emerge as a result of any inherent failure of capitalism but because of massive failures in governance – by regulatory authorities, managers of financial corporations and their boards. This phenomenon is well documented, along with its origins in the US and subsequent spread throughout the world (think UBS, RBS and Fortis). We don’t apologise for mentioning it yet again. The extent of governments’ failure to supervise the financial sector (including its rating agencies and its regulators) cannot be stated enough.
Indeed, one fundamental truth should never have been forgotten: markets and their actors need to earn the public’s trust continuously. And to do so, they have to operate in the public interest and be seen and understood to do so. The market is not an end in itself, society is. Regulatory authorities should be able to call boards to account and demand an explanation of how they are contributing to public value and trust. An ultra-liberal ideological quest pursued over several decades obscured this truth. Now we have rediscovered it, regulation and governments are back – and here to stay – with renewed supervisory vigour, and hopefully greater enlightenment.
The first responsibility of stateholding governments is to help identify and deflate the speculative bubbles that markets are forever blowing. A simple argument for this is the following: any private actor in the financial markets aware of an emerging bubble would have no interest in popping it – quite the contrary in fact. Thus governments have to develop the necessary abilities to monitor the markets for real, as opposed to spurious or apparent, value creation. Responsibility for effective functioning of the system cannot be fully delegated to private actors any more than it can be wholly outsourced to individuals. It rests with the stateholder.
2) Corporate boards must be held responsible for effective governance in the public interest
Of course, increased supervision by the regulatory authorities is not sufficient. Boards themselves must truly embrace their fiduciary responsibility to the public and to the entire system with greater zeal. The time has come for the Chairman of the Board to take on an explicit role as CGO – or Chief Governance Officer – and commit to keeping the corporation on a socially responsible course. Society will not allow private agencies to go on unless they also serve some public interest.
Once and for all, the “Chairman-and-CEO” role must be separated in those countries where it is still permitted – and immediately in companies with stateholders. Board members must commit to being fiduciary agents of the stateholder as well as representing conventional shareholders and the company itself. And this is perfectly compatible with the imperative of long-term value creation.
3) Stateholders must themselves commit to exemplary corporate governance
Given their huge stakes in private companies, stateholders must exemplify the new standards of governance described above – especially when managing their own stakes in major financial organisations. Transparency is critical. The secrecy so dear to the banking industry (and also on occasion to governments) cannot be espoused by stateholders. Extensive honest communication, not spin, is what is now required by both customers and the public. We believe the public will return their appreciation with greater trust.
The responsibility of the stateholder is to ensure that the corporation is serving the public interest, whether in conventional corporate-social-responsibility activities, in a fair representation and management of stakeholders, and in fair business and employment practices. Most important and simple of all, the stateholder must insist that management is executing according to plan – with an explicit and thorough anticipation of risk. The public interest was violated in so many ways in the latest crisis, because massive failures in business and public governance.
This is a formidable task. The question is: do governments have the manpower to fulfil their stateholder responsibilities? And the answer is probably ‘no’, unless it does so in partnership with the private sector.
4) Representing the stateholder must be recognised as a public service by senior executives
How then are governments to be represented in the corporations they partly own? This time, the answer is surprisingly positive, especially if you’re a senior financial executive or similar. After all, the chance to represent the stateholder to the best of one’s ability is golden in a sector that seeks redemption. Without huge financial incentives or bonuses, but with the plentiful benefits and virtues of public service (and suitably reduced pay), this new role should become de rigueur for those seeking to retire after a successful executive career. The job of governance is simply too important and too difficult for under-experienced and overburdened government employees, however well-intentioned.
***
Our plea to governments is unambiguous: “Welcome, Stateholder. You represent our biggest hope for substantial reform in corporate governance practices, not simply as a regulator but also as an example to all in the board room. You are essential to rebuilding public trust in the financial industry and to reconnecting business with society, both economically and morally. To borrow an all too familiar expression, this reform opportunity is … too big to fail!”
Robert Gogel is a serial turnaround executive and co-founder of the European Executive Council (EEC), a think tank of senior multinational executives. Ludo Van der Heyden is Solvay Professor for Technological Innovation at INSEAD. EEC members and INSEAD Professor Jean Dermine are thanked for valuable input, though responsibility for the opinions expressed above remains the authors’. An earlier and longer version of this article was published in Strategy + Business Online (October 2009).
Corporate Fraud Investigation and Prevention
Occupational fraud poses a serious threat to organisations across Asia. Experts currently put the average cost of fraud at 7% of total company revenues.
Beacon’s “Corporate Fraud Investigation and Prevention 2010” summit, held from 6 – 18 March 2010 in Singapore, will provide you with an update on the latest methodologies and technologies for combating fraud, based on recent real life examples and case studies from international companies. Practical case studies of recent fraud cases like the Madoff scandal and the Satyam Computer fraud will be used to discuss best practices and approaches to fraud prevention.
Workshops, round tables and closed-door sessions will further stimulate intimate exchanges for an in-depth discussion of the most common types of fraud in Asia.
Conference highlights:
- Learn from recent high profile fraud cases: An analysis of the Satyam Computer and Madoff Investment Securities fraud cases, featuring original data and documents
- Join round table panel discussions to discuss the most common types of fraud in Asia
- Discuss best practices for tracking and investigating fraud
- Hear from experts on how to maximise the results of employee interviews
- Receive an update on new technologies to fight electronic fraud and data theft
- Understand how companies are affected by the legal implications of fraud
Plus
In-depth workshops on:
- Key elements for a corporate fraud investigation
- Data Management and digital forensics: mastering the new technologies
Website: www.CorporateFraudAsia.com
To register online, please click here
To download brochure, click here
Email: info@beaconevents.com
Phone: +852 2219 0111
Upcoming CSE Workshops
The following are upcoming workshops offered by the Centre For Sustainability and Excellence (CSE).
IEMA Approved “Become a Qualified CSR Practitioner”
- Place: Dubai, UAE
- Date: 20-21 January 2010
- Time: 8:30 – 5:30 pm
- Cost: €1260
RSVP contact: Ms. Irene Daskalakis, Business Development Manager, CSE research@cse-net.org
More information or registration here.
Description:
This challenging 2-day course enables participants to acquire the skills and competencies required to become qualified CSR practitioners, certified by IEMA. Through specialised, detailed and highly focused training, it provides them with the tools and necessary practical framework of every CSR aspect. Upon completion of the course, trainees are able to apply their knowledge in all levels of CSR from the development and implementation of effective CSR strategies, to CSR reporting and communication.
Key modules to be covered include:
- CSR & Sustainable Development concepts
- Future trends & Legislation for CSR worldwide
- The Stakeholder approach & CSR
- CSR & Responsible Communication
- Global Standards / Models / Guidelines & tools for practical CSR integration
- Sustainability Reporting
- CSR Action Plan for your organisation (prerequisite for CSR Certification)
At the end of the course participants have the opportunity to be assessed and become qualified CSR practitioners to act as CSR consultants and in-house CSR Managers.
IEMA Approved “Become a Qualified CSR Practitioner”
- Place: Chicago, USA
- Date: 9-10 February 2010
- Time: 8:30 – 5:30 pm
- Cost: Workshop Cost US$1795 (Early Registration Offer 15% Discount)
RSVP contact: Mr. Nick Andrews, Managing Director, CSE N. America, nick@cse-northamerica.org
More information or registration here.
Description:
This challenging 2-day course enables participants to acquire the skills and competencies required to become qualified CSR practitioners, certified by IEMA. Through specialised, detailed and highly focused training, it provides them with the tools and necessary practical framework of every CSR aspect. Upon completion of the course, trainees are able to apply their knowledge in all levels of CSR from the development and implementation of effective CSR strategies, to CSR reporting and communication.
Key modules to be covered include:
- CSR & Sustainable Development concepts
- Global Warming & Climate Change
- Future trends & legislation of CSR & Climate Change in the U.S. & worldwide
- The Stakeholder approach & CSR
- CSR and Responsible Communication
- Global Standards/Models/Guidelines & tools for practical CSR integration
- CSR/Sustainability Reporting
- CSR Action Plan for your organization (prerequisite for CSR practitioner Qualification)
At the end of the course participants have the opportunity to be assessed and become qualified CSR practitioners to act as CSR consultants and in-house CSR Managers.
IEMA Approved “Become a Qualified CSR Practitioner”
- Place: Athens, Greece
- Date: 11-12 March 2010
- Time: 8:30 – 5:30 pm
- Cost: €1260
RSVP contact: Ms. Irene Daskalakis, Business Development Manager, CSE research@cse-net.org
More information or registration here.
Description:
This challenging 2-day course enables participants to acquire the skills and competencies required to become qualified CSR practitioners, certified by IEMA. Through specialised, detailed and highly focused training, it provides them with the tools and necessary practical framework of every CSR aspect. Upon completion of the course, trainees are able to apply their knowledge in all levels of CSR from the development and implementation of effective CSR strategies, to CSR reporting and communication.
Key modules to be covered include:
- CSR & Sustainable Development concepts
- Future trends & Legislation for CSR worldwide
- The Stakeholder approach & CSR
- CSR & Responsible Communication
- Global Standards / Models / Guidelines & tools for practical CSR integration
- Sustainability Reporting
- CSR Action Plan for your organisation (prerequisite for CSR Certification)
At the end of the course participants have the opportunity to be assessed and become qualified CSR practitioners to act as CSR consultants and in-house CSR Managers.
GRI Releases New Human Rights Reporting Guidance
November 13, 2009 by admin
Filed under Initiatives
The Global Reporting Initiative (GRI) has published two new reports recently. They examine trends in corporate measurement, reporting on human rights performance, and practical guidance for companies engaging in this emerging area of corporate citizenship and accountability.
As part of a collaborative project “Human Rights: A Call to Action,” launched last year to mark the 60th anniversary of the Universal Declaration of Human Rights, the Global Reporting Initiative, the United Nations Global Compact and Realizing Rights: The Ethical Globalization Initiative commissioned two studies to advance efforts on human rights reporting.
The first, a survey of recent sustainability reports by over 50 leading companies, examines trends in current corporate disclosures on human rights and highlights good practice examples as well as chronic shortcomings in reporting in this area. The second report offers a practical guide for companies on steps they can take to improve their coverage of human rights as part of their sustainability reports. It was developed through extensive expert consultation over the past year.
President of Realizing Rights: The Ethical Globalization Initiative, Mary Robinson, said:
My colleagues and I at Realizing Rights have been pleased to collaborate with GRI and the Global Compact on improving guidance for corporate reporting on human rights issues. We believe our findings and recommendations will be of significant help to companies and other stakeholders working to improve sustainability reports as a key tool in enhancing transparency and accountability around the world.
Executive Director of the United Nations Global Compact, Georg Kell, said:
As companies everywhere are developing a better understanding of the relevance of human rights to their strategies and operations, these new reports will be of great value in improving corporate reporting and ultimately help companies on their path to continuous performance improvement.
A final output of this important initiative is a set of recommendations on updates to the human rights elements of the Global Reporting Initiative’s G3 Guidelines – the world’s most widely-used sustainability reporting framework. Published today, the recommendations will form the basis for stakeholder consultation in early 2010.
Chief Executive of the Global Reporting Initiative, Ernst Ligteringen, said:
The GRI Guidelines were designed to evolve alongside our collective knowledge of the field of sustainability. In recent years the work of UN Special Representative John Ruggie and greater understanding of business’ role in human rights have increased this collective knowledge. These developments informed the Human Rights Working Group who have proposed a particularly insightful set of recommendations on changes to the GRI Guidelines. I now look forward to that knowledge being shared with a wider public, to receive feedback from the many stakeholders for whom the measurement, management and reporting of human rights is a key business issue.
Download the reports from: http://www.globalreporting.org/HumanRights
Sunrise Gets Shareholders’ Approval on Directors’ Compensation
November 5, 2009 by admin
Filed under Initiatives
Executive directors of Sunrise Berhad received shareholder backing in support of getting the input from shareholders on directors’ compensation. Said to be an unprecedented initiative from a Bursa Malaysia-listed company, a “say-on-pay” proposal was discussed during a Sunrise AGM in late October. During the meeting, a non-binding advisory vote was taken to gauge sentiment on whether its directors’ salaries were justified. Read more
Malaysia: Asian-Oceanian Standard-Setters Group
Malaysian Accounting Standards Board (MASB) and 23 Standard-Setters in the Asian-Oceanian Region, in the presence of the International Accounting Standards Board (IASB) today officially launched the inaugural meeting of the Asian-Oceanian Standard-Setters Group (AOSSG) in Kuala Lumpur. Read more
