Reuters photo
By
Firoz Abdul Hamid
“So I have just one wish for you – the good luck to be somewhere where you are free to maintain the kind of integrity I have described, and where you do not feel forced by a need to maintain your position in the organization, or financial support, or so on, to lose your integrity. May you have that freedom.”
Richard P. Feynman, a Nobel Prize winner for Physics in 1965
Trust. Integrity. Honour. Lexicons or Values? The month of November 2018 witnessed many boardroom dramas. Revelations of Facebook in the New York Times spoke of an unbecoming culture of ‘Delay, Deny and Deflect’allegedly practised by the most senior people in one of the largest corporations ruling this world today: People who we idolise, our children want to emulate, those who frequent talk shows and international business forums. These are people we trust as exemplars for our companies, yet in a public listed company that necessitates high levels of governance, we hear reports of culture that promotes the contrary.
And then we saw Carlos Ghosn, the chairman and CEO of Renault who allegedly used company funds for personal purposes. Another case of a public listed company that missed its mark on governance, it would seem. We had German police raiding Deutsche Bank’s headquarters in Frankfurt as part of an investigation into whether the lender helped criminals launder money through offshore tax havens when it was not long back HSBC was fined for money laundering offences in Mexico.
These cases and companies are by no stretch of the imagination small feat adventures. These companies are and have been emulative models of case studies for management schools, its leaders receive invites to Davos and we in the ‘developing world’ are made to believe that they are who we should model our market success on.
Now – zooming into my own country, Malaysia. It is heart breaking to read day in day out, of late, how the house of cards is crumbling in its own weight in some of our companies with long legacies and national agendas, like Felda Corporation where its entire former board has been sued for losses and bad investment decisions. As if this was not heart wrenching enough this week, we then read Malaysia’s 64 billion ringgit ($21 billion) Muslim pilgrimage saving fund, Tabung Haji (TH), is said to be short of four billion ringgit of deposits. The story which broke in the Singapore Sunday Times alleges that TH faked its 2016 accounts to justify its dividends. This in the same month we were told the movie-bound 1MDB Auditor General Report was tampered with. Having had several books written after it, made into documentaries and now waiting for its casts to be selected so they can film an all-Hollywood movie with all its trappings for more Malaysians to go watch how we were lied to and how our hard earned monies misused – these escapades are no longer amusing.
Added to this, we are witnessing politicians being hauled up for alleged corruption, the existing government (Pakatan Harapan) being questioned for their said promises in their election manifesto and their intent in honouring the promises. Yes in a glass half full scenario one can argue, we are witnessing transparency and rule of law taking its course. But the bigger question really is – how did we get here 61 years since our independence. Shouldn’t the systems, processes and institutions be solid enough to avert such malfeasances? Shouldn’t we have a civil service and/or leaders of government-linked companies who know that political campaigning is just wrong – yet we had very highly educated leaders, not least highly respected ones who ignored this basic ethics.
So my questions are: How did these people get to these positions? Who selected the company boards and its management teams for these companies? What were the criteria of these selection processes and what are their performance measures – or is it arbitrarily done by a few (in the corridors of power) peoples’ likes/dislikes as was suggested in a recent article in The Star?
Shouldn’t the criteria of selection be made public, for after all they are being paid by the public? Shouldn’t they (i.e. those who selected these leaders – CEOs and boards) too be hauled up for accountability when those they selected or appointed fail the country and its people?
We have CEOs in this country leading companies on behalf of the government who themselves are struggling with words like vision, mission and governance. They simply cannot understand the concept of business judgement and sustainability. Yet these candidates make the cut. I have sadly come face to face with one too many.
When I interviewed the current Prime Minister of Malaysia, Mahathir Mohamad, in July 2018, he spoke of his total frustration and exasperation in the breakdown of governance in our public sector and government-linked companies. He stressed on the rule of law being the way forward. This sentiment I am certain is shared by many in the country – from housewives to fishermen, from the jobless graduate to a janitor, from an underpaid and overworked teacher to a well-paid executive in a leather office.
Yet my gut keeps nagging the one question – the ones leading these companies and departments in government are no fools. They ARE well educated, they are sent to programmes (after programmes) and courses by their companies and the regulators regularly here and abroad (all paid for I might add) – yet we find these missteps, these blunders and these blood boiling news of blatant failure in public trust.
Who exactly is in charge one can’t help but wonder? Who is checking and monitoring these boards and CEOs and their management teams? In a 2014 debate at the Oxford Union, Christopher Hedges, a journalist and writer, argued that often we really do not know who is covering up for who. The committees know they are being lied to. The whole system is designed to cover up each other and this right to the door of parliamentary committees or its equivalent.
A friend of mine in his recent fit of frustration of this barrage of government-linked companies news argued that maybe they (the public sector and government-linked companies) have no sense of accountability because they know these funds are government-guaranteed. At the most they would be suspended or demoted within the public sector (unless clear proof of corruption). He also said that the infamous ‘passing of the buck’ rotates from the board to the CEO, to the audits (internal and external), back to the umpteen committees we have in an organisation as a feel-good factor, never mind our love for taskforces as soon as we hit a wall of problems yet no one is really in charge. No clear accountabilities. No clear indication where the buck stops.
The well-known historian Arnold J. Toynbee, who famously wrote the nine-volume book A Study of History said that civilizations start to decay when they lose their moral fibre and the cultural elite turns parasitic, exploiting the masses and creating an internal and external proletariat. He emphasized the importance of spiritual dimension in shaping civilisations. Toynbee studied the rise and fall of 21 civilisations and amongst others concluded civilisations fail when pride and hubris kicks in. Standard. We all know this. But he also speaks of the importance of the creative minority. This is the group of people who are able to challenge the status quo. Able to unfix and fix problems. Most of the time we have people who create a problem and then have no clue how to fix them. We also have those who give solutions to a problem but have no clue how it should then work.
The creative minority, Toynbee argue are those able to decipher what ails the society, and produce solutions that works in order that society/civilisation moves to its next echelon of dignity – or growth as we call it today. These people are beyond your standard technocrats. They understand human dimension, sociology, culture and, in essence, they build the very fundamentals and the fabric of a strong society. When a society loses this creative minority, and when hubris and arrogance kicks in, the all famous ‘yes man’ syndrome will be its default setting. That’s when you start witnessing the house of cards fall right before your eyes.
The Roman Empire rose because of its greatness in structure and discipline. Its ultimate demise happened when lawlessness crept in, similar to the Ottomans. Hubris ruled and a sense of conceit and arrogance became honourable to embrace. The entire Abrahamic depiction of Pharaoh (the master) and Moses (the slave) plays out in every aspect of society even now in the 21stcentury. Today we can safely say the story of Pharaoh and Moses is well and truly alive in many parts of our own society, waiting to be destroyed by the parting of the Red Sea. In his recent essay, Terence Fernandez, a Malaysian journalist, for instance wrote of the culture of sabotage in the public service and how it is affecting the new government operating and this after walking into a post-election (GE14) with such hope for change.
The entire governance system in Malaysian institutions needs to see a deep overhaul and the leadership at the very top has to own this problem and set it right. For if we do not, no amount of measures, programmes, talks, committees, task forces or retreats will save the day. It is a fundamental change of value system and culture necessary -one that takes time — one that isn’t always popular with politicians who by and large work towards the next election, and certainly not a top priority for three-to-five-years contract chief executives whose key performance measure is bottom line.
Malaysia needs to expand and grow its creative minority. We need many more who are able to stand up in the crowd and say: this is wrong and, no, this will not work. We need people who speak truth to power in our public sector and government-linked companies. We really are in desperate need of more people with moral courage in our boardrooms and the corridors of power, people who are able to rationally articulate wrong when it simply is wrong. This does not require an Ivy League degree. It does not require scores of titles. It requires a culture that incentivises moral courage. For this to happen throughout the entire value system, its incentives and remuneration system and culture must change. This has to be led by the CEO of the country (our Prime Minister), not a task force.
In the wake of the brutal Washington Post columnist, Jamal Khashoggi’s, murder in Istanbul on October 2, 2018, US President Donald Trump was faced with making a call on his stand on the case and he said (and I paraphrase) – the front and center is American interest and that is jobs and money. When interests are aligned to parameters that change with the next stock market cycle and speculative traits, a company really is doomed to fail. A country on its way to destruction. A civilisation on its journey to ruins.
If we do not exert values, by that, good values, on our core interests to growth, for fear of losing our jobs, titles and status, we are literally opening the doors for our children to bear the burden of our own self-interests. To put it simply if not bluntly, if we do not stand apart with moral courage and are willing to take the bullet for speaking the truth today in highlighting wrongs in our companies and institutions, what we are essentially doing is diverting that bullet for our kids and grandchildren to take, for our sins.
That really is the simple truth. This is why Feynman’s quote above is so poignant for our times.
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This article was originally published by the RIAC and is reproduced with their kind permission
Firoz Abdul Hamid
Firoz is a Fellow of the Royal Society of Arts in London. She obtained two degrees from Imperial College of Science and Technology in London. With over 20 years experience, she has been very involved in various sectors and industries in international public and private sectors and global academic institutions. Firoz started her career by managing multi-million dollar complex large-scale international construction, engineering and developmental projects.