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Risk Assessment: An essential tool for better decision-making

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By Tunku Alina and Anita Menon How familiar to you is the following scenario? It’s the start of the year, and the board has been booked for a strategy day. Slides decks have been shared but they were obviously rushed with many changes leading right up to the hour of the CEO’s briefing. Inevitably, an indepth description of the year ahead as part of a rolling 3-year midterm strategy, or a totally fresh 3-year plan is trotted out. The CEO gives an overview of the past year, high level aspirations for the coming year, and then the individual business heads would present their parts. There would be a passing comment on market and competitive landscape. Other than in the financial services sector, the Chief Risk Officer is rarely included. I have many times asked why the Risk Officer is not invited, or no formal risk assessment of the strategy or annual plan is given but it seems that this falls on deaf ears. I got my answer once, outside during an informal lunch with the board an...
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Decision Framework

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Every board is different, but each is driven by its own culture or savoir-faire. I have noticed two “tensions” at play: (1) management – board and (2) board – individual director.These two tensions affect where the board is in the governance spectrum: a micro-managing working board? Or at the other end of the spectrum, a ratifying board. Or does the board veer from one end, to the other depending on circumstances? In the first type of tension, the management’s views of the role of the board will set the stage. If management expects value-added contribution and support from the board, the shareholders will inevitably reap this benefit from the mutual respect engendered. The best of directors will be nominated, and the best stewardship will materialize. On the other hand, when owners of the company (such as a company that was founded by a group of entrepreneurs/managers or is family-controlled/run or is state-owned) view directors and governance as a necessary cost to accessing publi...
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Location: Kuala Lumpur, Federal Territory of Kuala Lumpur, Malaysia
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Doing Governance Better in 2024

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I caught up with an old friend recently, Dr Loh Leng Hua, who is a scholar in corporate governance. We talked about our favourite subject and the conversation led me to my own musings. Reflecting on the past seven years of my role as an independent board director, my approach to governance of companies has changed several times. I have learned a lot more through doing the work, being in the trenches , than by reading books and attending training sessions. No doubt, the academic learning is invaluable especially when I’m keeping up with the demands of the times and the vocation, but it is through the practice of governance that I have matured as a director. This next series of six mini articles reveals my current thoughts, and I invite you to be my partner in doing governance better. I look forward to hearing your views. Happy Year of the Dragon!
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Location: Malaysia
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Governance in the Year of the Tiger

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Gong Xi Fa Cai! In this Year of the Tiger, I would like to start off my thoughts on Governance. I was invited to moderate a panel in July last year, and I asked the panellists why they felt that good governance, at business, corporate and government level is important. At foundation, good governance practices can decrease fraud and scandals that affect stakeholders. There are virtues of being an sustainable company and that relates to returns. A business that has its eye on sustainability makes strategic planning considering impact on stakeholders, society and environment and takes steps to mitigate harm. In studies, countries that have done the same have outperformed countries that do not practice the same level of governance. All good. We know why sustainability is important, and that good governance is part and parcel of one's sustaining power. But how do you govern for such performance? What are the building blocks of governance, I asked? The answers were eye-opening....
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Location: Kuala Lumpur, Federal Territory of Kuala Lumpur, Malaysia
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The Value of Sustainability Initiatives

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I recently participated in a panel at the IVAS-IVSC conference on Valuation, the topic of discussion was how to value sustainability efforts. It was an interesting question that I had been mulling over since I first began my own sustainability journey. Value is subjective, much like beauty it is in the eyes of the beholder. So in valuing sustainability , one would have to determine who the valuation is for, and the scope thereof. One of the speakers also mentioned an added complexity, in that some companies have already incorporated sustainability into their strategy and thus teasing out the value of sustainability per se becomes tricky. In my work as a board director, over the past 18 months alone, I have come across at least 5 instances where sustainability has appeared as an intangible but powerful affect. Three would require valuation specialists, the other two, market forces. The first is in the acquisition of a listed company, and the allocation of price for the ...
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Location: Kuala Lumpur, Federal Territory of Kuala Lumpur, Malaysia
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Malaysia's SDG Ranking

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pic: Cekur grown on my aircon condenser ledge . I was asked recently, where Malaysia ranked in its sustainability journey. According to the SDG Index, in 2021 the top 3 ranked countries are Scandinavian countries with Finland at no 1/165 with a score of 85.9/100. Malaysia ranks 65/165 countries with a score of 70.88/100. You can check out other countries' rankings at the SDG Index website.
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Location: Kuala Lumpur, Federal Territory of Kuala Lumpur, Malaysia
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Corporate Sustainability aligned with the SDGs

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pic: The Lake Gardens, Kuala Lumpur. February 2021 The UN Global Compact feels that corporate sustainability aligned to the SDGs is an imperative. It is “essential to long-term corporate success and for ensuring that markets deliver value across society.” To be sustainable, UNGC member companies must act in 5 ways – 1. principled business: aligning with 10 principles on human rights, labour, environment and anti-corruption; 2. strengthening society: taking action and collaborating with others to advance global challenges; 3. leadership commitment: effecting long-term change begins with a company’s leadership; 4. reporting progress: transparency in business practice is crucial for sustainability; 5. local action: viewing sustainability through a local lens. The UNGC membership consists of over 8,000 companies and 4,000 non-business participants based in over 160 countries. The consensus is that business should engage with the SDGs because although an inv...
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Location: Kuala Lumpur, Federal Territory of Kuala Lumpur, Malaysia
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