VOL. 55 NO. 1 • 2020

DIGITAL Redesigning for the Digital Economy: A Study of SMEs in Southeast Asia

FEATURE The Future of Asia

LEADERSHIP SERIES Leadership that Matters Today The Coronavirus Crisis: Are Leaders Ready?

OPINIONS Managing Conflict of Interest in a Business Enterprise

DIGITAL BUDGET 2020 GETS IT (MOSTLY) ABOUT THE DIGITAL ECONOMY

West Malaysia RM15.00 East Malaysia RM17.00 www.mim.org.my PP 938/10/2012(031402) Contents

LEADERSHIP

PUBLISHED BY 06 The Coronavirus Crisis: Are Leaders Ready? MALAYSIAN INSTITUTE OF MANAGEMENT (MIM) Institut Pengurusan Malaysia 08 Leadership that Matters Today Unit T1-L16-1, Level 16, Tower 1, PJ 33, No. 3 Jalan Professor Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, , Malaysia. THE DECADE IN REVIEW

PUBLICATION COMMITTEE 15 The Decade in Review Dato' Ng Tieh Chuan, EFMIM (Advisor) Sivanganam Rajaretnan Poovanaswari Kasinathan DIGITAL

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HONORARY FELLOWS YM Royal Professor Ungku Abdul Aziz Ungku Abdul Hamid YAB Tun Dr. YB Dato’ Seri YABhg. Tun Sivanganam Rajaretnan YB Dato’ Sri Mohd Najib Tun Abdul Razak

Chief Executive Officer COURT OF EMERITUS FELLOWS President Malaysian Institute of Management YABhg. Tun Haji Vice President YBhg. Dato’ Ng Tieh Chuan

YBhg. Datuk Dr. Paddy Bowie t’s 2020! Let’s start the new decade with enthusiasm and renewed YM Tunku Tan Sri Dato’ Seri Ahmad Tunku Yahaya YBhg. Tan Sri Dato’ Azman Hashim vigour. We ended 2019 momentously with the 29th Tunku Abdul Ir. George Lee Yau Lung Dr. Tarcisius Chin Nyet Leong Rahman Lecture Series which saw the honourable YABhg Tun Dr. Daim Mr. Robert Kuok Hock Nien IZainuddin speak on the future of Malaysia. T.Y.T. Tun Pehin Sri (Dr) Haji Prof. Liew Shou Kong This year promises to be another exciting year for the Institution, YBM Tan Sri Tengku Razaleigh Tengku Mohamad Hamzah with a wide range of events and programmes in the pipeline. On the YBhg. Prof. Tan Sri Dato’ Dr. Mohd Rashdan Haji Baba YBhg. Tan Sri Kamarul Ariffin Mohamed Yassin professional development front, we have introduced new programmes in YBhg. Tan Sri Osman S. Cassim YBhg. Tan Sri Dato’ Sri (Dr) Sallehuddin Mohamed line with the top 10 skills relevant to achieve the requirements of Industry YBhg. Tan Sri Wan Azmi Wan Hamzah 4.0. From leadership development programmes to Masterclasses and YBhg. Tan Sri Kishu Tirathrai YBhg. Tan Sri Dato’ (Dr) R V Navaratnam C-Suite Series, MIM works to curate our offerings to address current Mr. Niels John Madsen R, R1 YBhg. Datuk Haji Mohd Saufi Haji Abdullah and emerging market needs. We kicked off the year with the 1st of our YABhg. Tun Dr. Emotional Intelligence programme series, ‘Leaders as Coach’, conducted YABhg. Tun YBhg. Tan Sri Dato’ Sri Dr. Teh Hong Piow by our partner, Genos International, Australia, which further accentuates YBhg. Tan Sri Dato’ Dr. Lin See Yan our efforts in providing world-class executive education programmes. YBhg. Gen (Rtd.) Tan Sri Dato’ Seri Mohd Zahidi Haji Zainuddin YAM Tunku Tan Sri Imran Almarhum Tuanku Ja’afar March will see our signature Ready-To-Fly Youth Leadership YBhg. Tan Sri Dato’ Dr. Mohamed Munir Abdul Majid YBhg. Tan Sri Dato’ Sri Mohd Programme which is open to MIM Member’s children and Student YBhg. Tan Sri Dato’ Sri Tay Ah Lek Affiliates. Its sixth year running, the all-expense-paid experiential YBhg. Datuk Seri Haji Mohamed Iqbal Rawther YBhg. Tan Sri Datuk Yong Poh Kon learning programme is designed to help youth develop a greater breadth YBhg. Prof Datuk Seri Dr Haji Khairil Annas Jusoh YBhg. Tan Sri Dr. Ali Hamsa of skills to meet the new demands of the workforce of tomorrow. Then, YBhg. Tan Sri Dato’ Seri Siti Norma Yaakob join us in April as we discuss governance and accountability at the MIM YBhg. Tan Sri Lim Kok Thay YBhg. Tan Sri Dr. Jeffrey Cheah Fook Ling Crucial Conversations: Corporate Liability 2020. YBhg. Tan Sri Dato’ Seri Megat Najmuddin Megat Khas On a solemn note, MIM also mourns the loss of two illustrious figures, YBhg. Tan Sri Dato’ Lim Wee Chai YBhg. Datuk Prakash Chandran the Late Chief Justice (Rtd.) and Allahyarham Tan Sri GENERAL COUNCIL Abdul Aziz Abdul Rahman, who were both our Court of Emeritus Fellows. Chairman They embodied the admirable qualities of a leader and led lives governed YBhg. Tan Sri Dato’ Seri Megat Najmuddin Megat Khas Vice Chairman by honour and principles. A tribute to these icons is in the article Puan Rahima Beevi binti Mohamed Ibrahim ‘Remembering Icons’ on page 57. Representing Court of Emeritus Fellows YBhg. Dato’ Ng Tieh Chuan As 2020 speeds full steam ahead, I would like to take the opportunity YBhg. Tan Sri Dato’ (Dr.) R. V. Navaratnam to thank you for your support in the past year. Our success is a reflection YBhg. Tan Sri Dato’ Seri Megat Najmuddin Megat Khas Representing Corporate Members of your continued belief in our efforts as we strive to achieve greater Puan Rahima Beevi binti Mohamed Ibrahim accomplishments in the new year. YBhg. Datin Dr. Hasnorliza Abu Hassan Mr. Thiagarajan a/l S. Rengasamy Representing Fellows Mr. Ong Weng Leong Representing Associate Fellows Mr. Azlan bin Abdullah Representing Ordinary Members Mr. Rama Krishnan a/l Thiruyangadam Mr. Selvaraja Muthaya Mr. Sugumaran a/l Vairavappillai Mr. Lim Eng Weng Representing Associate Members Puan Rosmawati binti Mohd Ali LEADERSHIP The Coronavirus Crisis: Are Leaders Ready?

By Korn Ferry 2020 VOL. 55 NO. 1 • • MANAGEMENT

Do leaders have enough supply-chain contingencies for a global epidemic?

06 LEADERSHIP

s trade talks between the United States and China dragged on last year, organisations spent much of that time analysing their supply Achains and making contingency plans to avoid any long-term disruption and mitigate business risk. That's why, in times of But with the coronavirus outbreak, firms across the sudden disruption, risk globe face a whole different level of challenges. Experts say the critical difference is time—or management becomes very lack of it. It’s been about three months since important. – Kent Brown Chinese researchers first identified the deadly respiratory illness that has so far infected more than 75,500 people and claimed the lives of more than 2,000 people in 29 countries. “When something like this happens, it’s all about how quickly you can react,” says Kent Brown, North American practice cargo. “The full affect of the virus won’t be known leader for Korn Ferry’s Supply Chain Center of for months, but it is going to test the adaptability Expertise. and nimbleness of supply chains for multiple global The speed and agility with which organisations industries,” says Deboo. react can be the difference between losing millions That's why, says Brown, in times of sudden and tens of millions of dollars—particularly in a disruption, risk management becomes very 2020 country like China, where every global company important. “What kind of exposure does a company has some operations. Already, Apple, Starbucks, have, how close to the source is it located, when and Ikea have temporarily closed stores, while might the ban be lifted?” says Brown. “You have to automakers have delayed production and airlines figure out these logistical questions and manage have canceled flights to the country. The closer VOL. 55 NO. 1 • from there.” From an inventory standpoint, • operations are to the Wuhan/Hubei region where identifying factories and warehouses that can the virus originated, the deeper and more costly take on additional capacity, accelerate production, the impact, of course. "Most companies were not or source components is critical. But that’s a

prepared for such a nationwide shutdown for this luxury for some organisations—others are too MANAGEMENT long," says Diana Chan, leader of Korn Ferry's small to have multiple warehouses or suppliers Global Industrial Markets practice in Greater China. they can switch to in an emergency. As US-China Brad Marion, global leader of Korn Ferry’s trade issues flared up in 2018, many companies Automotive practice, notes that automakers and started expanding their manufacturing footprints suppliers strive to have a footprint and revenue mix to Vietnam, , and Malaysia, which helps that matches regional market share. With China mitigate certain risks, Chan says. now representing 30% of the world’s automotive While some have drawn comparisons between market, that would mean most automakers would the coronavirus outbreak and the SARS epidemic hope to have approximately 30% of their corporate of 2002, there is one big difference for business revenues based in China, says Marion. “The impact operations: a lot more data analytics are available the coronavirus will have on the Chinese economy now. Leaders can track the coronavirus’s impact is of great concern to many in the automotive across a range of data points to better forecast risk industry,” he says. and response for the next outbreak. In the absence The sudden halting of travel into and out of China of clairvoyance to predict the next major epidemic, also means leaders have limited opportunities “leaders can look at the numbers and put in to source alternative partners, says Mehrab algorithms to mitigate the effect,” says Brown. Deboo, a senior client partner with Korn Ferry’s Global Supply Chain Center of Expertise. He says shipments will be delayed as organisations For Article Submission-Advertisements-Subscriptions, please scramble to reroute or find alternate routes for email us: [email protected]

07 THE DECADE IN REVIEW The Decade in Review

The year 2020 has arrived, and with it the beginning of a new decade.

Here’s a look at stories that made headlines and scientific discoveries in the past 10 years in Malaysia and around the globe.

2010 1 Malaysia Day Celebrated 2 World’s First iPad Unveiled 3 Google Leaves China Throughout Malaysia for A device between a smartphone Google set up shop in China the First Time and a laptop, the iPad was in 2006, offering a version of Malaysia Day falls on 16th of Apple’s first tablet computer. its services that conformed to September. Malaysia Day was It was launched by Steve Jobs the government’s oppressive initially only celebrated in at an Apple press conference censorship policies. It shut and , whereas it was a in San Francisco. It's included down its Chinese search engine 2020 usual working day in Peninsular applications were redesigned in 2010, after it discovered a Malaysia. The then Prime to take advantage of the larger cyberattack from within the Minister made screen with added functionality country that targeted it and similar to their Mac OS X dozens of other companies. Malaysia Day a nationwide VOL. 55 NO. 1 • public holiday in 2010 during a counterparts. • Q&A session at the Parliament 4 Instagram was Launched on 19th October 2009. The app itself only took 8 weeks to build but was a result of over MANAGEMENT a years work behind it. It was a success right from the beginning with over a million users only two months after it was launched. It went on to be bought by Facebook for USD1billion in 2012 and now has over 600 million active users.

5 BP Oil Spill Known as the Deepwater Horizon Spill, more than 200 million gallons of crude oil was pumped into the Gulf of Mexico for a total of 87 days making it the largest maritime oil spill in history. It

Deepwater Horizon offshore drilling unit on fire. was caused by an explosion Photo Credit: on the Deepwater Horizon oil

15 THE DECADE IN REVIEW

rig which caused the rig to a 7.0 magnitude earthquake a man-made set of genetic subsequently sink. struck the West Indian island of code-originating on a computer Hispaniola. Followed by dozens and placed on a synthetic 6 BrahMos Missile Created of powerful aftershocks, the chromosome inside an empty quake hit hardest in Haiti, the cell. Using its new “software”, India's BrahMos missile, jointly poorest country in the western the cell can generate proteins developed with Russia, set hemisphere, killing an estimated and produce new cells. the world record for becoming 250,000 people and affecting the world's first and fastest some 3 million. supersonic cruise missile. The 9 Copiapó Mining Accident name BrahMos is a portmanteau The Chielan mining accident formed from the names of two 8 Creation of Synthetic Lifeform saw 33 men become trapped for rivers, the Brahmaputra of India In a giant leap for biotechnology, a staggering 69 days after the and the Moskva of Russia. a team of scientists led by copper and gold mine in which DNA pioneer Dr Craig Venter they worked collapsed. The mine, 7 Haiti Struck by Devastating successfully created the first opened in 1889, spiralled into the Earthquake artificial lifeform. Mycoplasma depths of a mountain and was laboratorium is an entirely approximately 2,625 feet deep. The deadliest natural disaster new species of bacterium, with

2020 of the decade happened when

2011

VOL. 55 NO. 1 • region around a star where liquid • 1 Malaysia’s New Currency 2 Osama bin Laden killed water, a requirement for life on Series launched On May 2nd 2011, U.S. Special Earth, could persist. The latest series of Forces raided an al-Qaeda Malaysian banknotes compound in Abbottabad, 4 Fukushima Nuclear Disaster MANAGEMENT drew its inspiration from , and killed the Following a massive earthquake, the distinctive features of world’s most wanted terrorist: a 15-meter tsunami disabled Malaysia, incorporating Osama bin Laden. The entire the power supply and cooling elements of the country's operation, which lasted only 40 of three Fukushima Daiichi natural treasures, culture minutes from start to finish, reactors, leading to a nuclear and heritage. Themed was the culmination of years of disaster in the country. The 'Distinctively Malaysia', calculated planning and training. tremor of the 9.0-magnitude the banknotes features Tohoku earthquake and traditional expressions in 3 Scientists discover Kepler-22b subsequent tsunami killed over the art and craft, natural An extrasolar planet orbiting 15,000 people and displaced wonders, flora and fauna within the Goldilocks zone or hundreds of thousands of people. and the economy. The habitable zone of the Sun-like banknotes issued were in star Kepler-22. The planet is 5 Steve Jobs Dies the denominations of RM1, nearly 2.5 times the size of Earth Steven Paul Jobs was an RM5, RM10, RM20, RM50 and has a 290-day year. It is the American inventor, designer and RM100. first planet that NASA's Kepler and entrepreneur who was the mission has confirmed to orbit co-founder, chief executive and in a star's habitable zone - the

16 THE DECADE IN REVIEW

2012 chairman of Apple Computer. 36-year-old cancer patient at the Under Jobs' guidance, the Karolinska University Hospital in 1 First Female Malaysian to company pioneered a series Stockholm, Sweden. Win Medal at the Olympics of revolutionary technologies, Malaysian diver, Pandelela including the iPhone and iPad. 8 Completion of the International Rinong was the first female Jobs died following a long battle Space Station Malaysian athlete to win a with pancreatic cancer. This was by far the largest medal at the Olympics, as man-made structure ever put well as the first to win an 6 Greek Debt Crisis into orbit – measuring 110m Olympic medal in any sport The Greek debt crisis was the wide, with a mass of 345,000 other than badminton. She dangerous amount of sovereign kg and a living volume of 1000 won the bronze medal in the debt Greece owed the European cubic metres. The primary 10-metre diving platform at Union between 2008 and 2018. fields of research on board the the 2012 Summer Olympics In 2010, Greece said it might station include human research, in London, United Kingdom. default on its debt, threatening space medicine, life sciences, the viability of the eurozone itself. physical sciences, astronomy 2 Gangnam Style’ Breaks To avoid default, the EU loaned and meteorology. It will remain in YouTube Greece enough to continue operation until the early 2020s. Gangnam Style takes the making payments. It was the 2020 world by storm and became biggest financial rescue of a 9 22 Nanometer Chips are in the first video ever to reach a bankrupt country in history. Mass Production billion views on YouTube. The The successor to 32nm, this music video for South Korean

7 VOL. 55 NO. 1 • World’s First Synthetic Organ latest generation of chips singer Psy's Gangnam Style • Transplant continued the trend of Moore’s exceeded YouTube's view Surgeons carried out the world's Law, each containing more than limit, prompting the site to first transplant of a fully synthetic 2.9 billion transistors. They will, upgrade its counter. organ, a windpipe created using in turn, were succeeded by 16nm MANAGEMENT the patient's own stem cells and chips – close to the limits of 3 Neil Armstrong Dies a fully artificial scaffold. The miniaturisation for integrated US Astronaut, who made the operation was performed on a circuits. “giant leap for mankind” as the first person to walk on the Moon, died at 82, due to complications resulting from cardiovascular procedures. A quiet, private man, at heart an engineer and crack test pilot, Mr. Armstrong made history on July 20th 1969, as the commander of the Apollo 11 spacecraft on the mission that culminated the Soviet- American space race in the 1960s. UCL professor Alex Seifalian holds the trachea that was used in the first synthetic organ transplant. Photo Credit: Rex Shutterstock/ The Guardian

17 THE DECADE IN REVIEW

2014 1 MH370 Disappears to-air missile over Ukraine in the Western Hemisphere, pro-Russian separatists. and the seventh-tallest in the MH370 disappeared with The passenger flight was world. It sits on the World Trade 239 passengers and crews, en route from Amsterdam Centre site, which is being built becoming one of the biggest to Kuala Lumpur. A Dutch- to replace the original seven aviation mysteries until today. led international team of buildings that were destroyed The Malaysia Airlines jet had investigators has charged four in the September 11th terrorist taken off from Kuala Lumpur on suspects, three Russians and a attacks. a routine flight to Beijing. After Ukrainian, with the murder of some fictitious reports that all 298 people aboard. They will 5 Tigers are Going Extinct the Boeing 777 had landed in go on trial in absentia in a Dutch The 20th century saw tiger southern China with technical court in March 2020. problems, MH370 was declared numbers plunge by over 95% worldwide. By the 1970s, they missing and presumed to have 3 Facebook Buys WhatsApp crashed in the South China had disappeared from Central Sea. Despite many clues and In a play to dominate messaging Asia, by the 1980s from Java and theories regarding MH370’s on phones and the Web, by the 1990s from South China. disappearance, the truth behind Facebook acquired WhatsApp Three of the nine subspecies – for $19 billion. WhatsApp has Bali, Javan and Caspian tigers its disappearance is still yet to 2020 be discovered. upwards of 450 million users, – were extinct by the 1980s. and it is adding an additional Poaching remains a serious 2 MH17 Shot Down Over Ukraine million users every day. It has problem, with tiger skins fetching been able to hold its weight up to USD20,000 in China.

Malaysia Airlines Flight 17 against messaging heavyweights VOL. 55 NO. 1 • (MH17) shot down by a surface- like Twitter, Google and • Microsoft's Skype.

4 One World Trade Center MANAGEMENT Completed One World Trade Center (also known as One WTC or Freedom Tower) is the main building of the rebuilt World Trade Center complex in Lower Manhattan, A woman writes a message on a banner New York City. One WTC is the for missing Malaysian Airline Flight 370 Most tigers are now found in captivity, such at Kuala Lumpur International Airport tallest building in the United as this majestic beast at the Korkeasaari in 2014. States, the tallest building Zoo in Helsinki, Finland. Photo by: Charles Pertwee/Bloomberg Photo by: Max van den Oetelaar on Unsplash

2015 1 Sabah Earthquake Sabah earthquake struck Ranau, Sabah, Malaysia with a moment magnitude of 6.0 on 5th June, which lasted for 30 seconds. The earthquake was the strongest to affect Malaysia since the 1976 Sabah earthquake. Malaysian authorities believed there was as many as 19 people killed, most caught in the landslide triggered by the quake.

19 THE DECADE IN REVIEW

2 IMDB Scandal 1Malaysia Development Berhad (1MDB) is an insolvent Malaysian strategic development company, wholly owned by the Minister of Finance (Incorporated). In 2015, The Wall Street Journal released a report alleging Malaysia's then- Prime Minister Najib Razak of Rescue workers take part in the rescue operation where several houses have collapsed at channelling over RM 2.67 billion Vhaktapur district in Nepal 27 April 2015. Photo by: The New York Avenue Presbyterian Church (≈ US$ 700 million) from 1MDB to his personal bank accounts, making it the world’s biggest reform labour laws, among other expansion, could raise the level financial scandal. measures. of Earth’s oceans nearly 2m by 2100 – potentially displacing 3 Nepal Earthquake 5 Zika Virus Epidemic hundreds of millions of people. Nepal was devastated by a Zika virus is a mosquito-borne

2020 massive 7.8 earthquake, killing flavivirus that was first identified 7 Dies nearly 9,000 people, injuring in Uganda in 1947 in monkeys. Founding Prime Minister of 22,000 and leaving 3.5 million In early 2015, a widespread , Lee Kuan Yew people homeless. It was the epidemic of Zika fever, caused by died ages 91. His death was worst natural disaster to the Zika virus in Brazil, spread four months shy of the 50th VOL. 55 NO. 1 •

• strike Nepal since the 1934 to other parts of South and anniversary of Singapore’s Nepal–Bihar earthquake. North America. It also affected independence. Mr Lee was The earthquake triggered an several islands in the Pacific, and widely regarded as the man avalanche on Mount Everest, Southeast Asia. The virus can most instrumental in shaping

MANAGEMENT killing 21 making 25th April be transmitted from an infected Singapore, from the time he 2015 the deadliest day on the pregnant woman to her foetus, and his People's Action Party mountain in history. then can cause microcephaly and colleagues pushed for self- other severe brain anomalies in government in the 1950s, to their 4 Greece Bailout Expires the infant. quest for merger with Malaysia in the early 1960s, and their efforts The Greek government missed to secure the country's survival its 1.6 billion euro ($1.7 billion) 6 The First Climate Change after independence was thrust payment to the IMF when its Refugees on it on Aug 9th 1965. bailout expired on June 30th As a direct result of sea level making it the first developed rises, the inhabitants of the country to effectively default to Carteret Islands in Papua the Fund. However, a third bailout New Guinea had been forced was approved from the EU. In to abandon their homelands. exchange for the 86 billion euro Crops, trees and wells had been bailout, which is to be distributed contaminated by seawater, through 2018, EU creditors while most of the buildings on required Greece to implement the islands were destroyed. The tax reforms, cut public spending, melting of polar ice sheets and Lee Kuan Yew Dies. privatize state assets, and glaciers, together with thermal Photo by: The New Republic

20 DIGITAL Budget 2020: Malaysia Gets It (Mostly) About the Digital Economy

By Digtal News Asia 2020 VOL. 55 NO. 1 • • MANAGEMENT

he Malaysian government clearly gets it that With the Digital Economy being all about workers the nation needs to prepare well, and prepare upskilling themselves to be ready for future jobs, fast, in order to be a winner in the digital the second pillar of investing in talent is especially Teconomy, that is already upon us. It has made crucial. Here I really like the TVET focus carved out. “boosting economic growth in the New Economy For example, the strengthening of Technical and and Digital Era” as the first pillar of its 2020 Budget Vocational Education and Training (TVET) with an that was introduced by Lim Guan Eng, Malaysia’s allocation of RM5.9 billion to ensure the pipeline of Minister of Finance. skilled and semi-skilled workers will remain robust.

26 DIGITAL

At the same time, there is public funds for maximum the global innovation centre they an allocation of RM11 million, impact, the RM50 million should would have established in KL (a relatively small amount) to be matched by the same amount would have become the fertile the Ministry of Energy, Science, from the telco hardware and ground from which possible Technology, Environment and software players chipping in Malaysian tech innovators in 5G Climate Change (MESTECC) to together. I am talking about the could have arisen. encourage the uptake of STEM likes of Nokia, Ericsson, ZTE, By the way, this standalone education. Huawei, even Samsung, some of RM50 million grant is the Japanese network players, surprising when considering [RM1 = US$0.24] the Softbank owned British chip the RM25 million matching Still, if you were to look at designer ARM Holdings and grant announced to spur pilot some of the specific incentives of course the American chip projects around applications introduced to support the Digital makers like Intel, Broadcom, such as drones, autonomous Economy for 2020, your jaw may Texas Instruments etc. Whoever driving, blockchain and based drop at the small amounts given has an interest in wanting to on fibre and 5G. Why the to support this acceleration to do business in Malaysia’s 5G different approach for much becoming a digital powerhouse market. tougher technology development nation and some of the A RM100 million a year grant challenge? incentives may induce bouts of for at least four years? Now Now for the head scratching, 2020 head scratching as well as to we’re talking and giving our tech logic defying example, we have questioning the logic behind entrepreneurs and companies the RM70 million allocated them. a chance to think bigger than to build 14 one-stop Digital To the jaw dropping just fighting over a small RM50 Enhancement Centres in all example, we have the 5G million sum. states to facilitate access to VOL. 55 NO. 1 • • Ecosystem Development And if the government grant financing and capacity-building Grant worth RM50 million that is not coming from the MCMC, for businesses, especially small the government hopes will and I would be surprised if it is and medium-sized enterprises “significantly enhance Malaysia’s not, then our telco operators (SMEs). MANAGEMENT economic competitiveness” must contribute as well to the The funding will be allocated through seeding technological matching amount. to Malaysia Digital Economy developments by Malaysian Of course, if the Axiata Group- Corporation (MDEC) to set up companies to ride the global 5G Telenor merger had gone ahead, these centres. Here come the wave. Lim’s specific remark here head scratching moment. Lim was, “The government wants says that the initiative is an Malaysians to be prepared for the extension of the 100 Go Digital coming 5G era.” programme. I’m sorry but RM50 million Now if you know what this won’t move the needle to achieve programme is, then you need the great things hoped for here. The government to take over running DNA from Although it is not mentioned wants me. Because in my seven years where the money will come from, of running DNA, we have not I suspect it will be contributed by Malaysians to be carried a single article on this the Malaysian Communications prepared for the programme. Neither can I find and Multimedia Commission or anything about it online as well, MCMC. coming 5G era. though Singapore has something With Finance Minister Lim called SME Go Digital. always talking about stretching

27 DIGITAL

[Ed note: MDEC has since in the e-Games, animation and enough for an SME owner to pointed out to me that this is a digital arts space. This support take advantage of it, Effon Khoo, very new program]. no doubt serves as validation to who runs SaaS payroll and HR That mystery aside, and the impressive work being done services for SMEs, contends taking the word “build”, literally, by the outstanding Hasnul Hadi that it is enough for a full year of it defies logic that we need to Shamsudin who leads MDEC’s service for any SME that has 20 actually build 14 centres, one in creative content efforts. staff and below. each state, likely in the capital “RM10,000 in general, is good as that is where the majority of Digitalisation Boost for SMEs enough for a 20 pax size SME SMEs are located. to get HR, accounting, POS, Moving away from MDEC to It would be a total waste of webstore cloud subscription our SMEs, the 50% matching money to do so. I say just use an sorted out. And it improves the grant amounting to RM5,000 existing government facility and business operations a lot,” he each should give some incentive channel the full RM70 million to says. for SMEs to digitise their the purpose of capacity building As someone who deals with operations. In this case the grant for our SMEs. Actually, I wouldn’t traditional SMEs, daily, Khoo is specifically for ERP, e-POS be surprised if the government has noticed how a slow adoption and e-payroll services. A subtle came out to clarify that this will of productivity tools has hurt criteria of this grant is that it not entail actually building 14 businesses. “Sometime it's just

2020 actually refers to cloud based facilities. a needle to move the company services as it uses the term Lim also spoke of to improve operations. You will “subscription services” which is establishing, not building – be surprised that there are so the standard business model for though it could mean the same many companies still running cloud computing based services.

VOL. 55 NO. 1 • thing – three new digital libraries operations the old way, for What I especially like here is • in , and example using paper to apply for the generous support and the to spur “knowledge-sharing leave. Many still struggle to pay cut-off point in helping SMEs. and education through digital- payroll online,” he notes. The matching grant is to be enabled content." Nonetheless he sees his

MANAGEMENT made available over a five-year Again, I am sure, Minister of clients being more receptive period but will be limited to Communication and Multimedia, now with this incentive. Joel the first 100,000 SMEs owners Gobind Singh Deo, will have Neoh, cofounder of Fave is also quick enough to apply to take enough resources on the ground excited about this incentive, advantage of the benefit. in each of these states, to offer adding, “we want to see how we And while the RM5,000 one of his ministry’s facilities for can potentially work with the amount may not seem incentive this purpose. Waste not a cent on any pointless construction here as that will not help the government achieve its goal of pushing the nation towards digital transformation. These two particular grants Moving away from MDEC to our SMEs, aside, there is a lot I like about the 50% matching grant amounting to the various digital initiatives announced. RM5,000 each should give some incentive For example the RM20 for SMEs to digitise their operations. million for MDEC to further grow digital content champions

28 DIGITAL

Continuation from MANAGEMENT VOL.54 NO.3 (Feature) Redesigning for the Digital Economy: A Study of SMEs in Southeast Asia

By EY 2020 VOL. 55 NO. 1 • • MANAGEMENT

30 DIGITAL

Internet of Things (IoT) on Governments’ Digital Agenda oT is the connection of devices to the Internet using embedded software and The core idea is not to utilise sensors to communicate, collect and new technology to merely Iexchange data (such as their identity, condition and environment) with one another. Country- replicate an existing product, level analysis indicate that IoT also ranks high service or solution in a on the digital agenda, particularly so for the SMEs in Indonesia, Malaysia and Singapore. digital form, but ideally, to This could be attributed to governments in these countries demonstrating the potential enhance these offerings to of IoT with public projects, fostering the support superior customer awareness of its benefits to businesses, and supporting funding and expertise to accelerate engagements and potentially the progression of IoT in the digital economy. new sources of income. 2020

Figure 11: Government-led IoT projects

Indonesia: Malaysia: Singapore: VOL. 55 NO. 1 • • Multiple initiatives are underway as part The “National Policy on Industry Singapore seeks to position itself as of Indonesia’s economic masterplan 4.0” launched in October 2018 the epicenter for IoT technology in to become Southeast Asia’s largest encourages the adoption of Southeast Asia, with infrastructures digital economy (through its “2020 Go Industry 4.0 technologies including being laid out as part of its “Smart Nation

Digital Vision” program) and have the IoT. Sectors in focus include the initiative” to support IoT deployments in MANAGEMENT digital economy contribute US$130b digitization of manufacturing the public and private sectors. to its economy in 2020. These include processes in the electrical and This includes rollout of its Narrowband IoT the Ministry of Communication and electronics, machinery and (NB-IoT) network in 2017, the first of its Information Technology (MCIT) launching equipment, chemical, medical kind in Southeast Asia. Interconnectivity “Industry 4.0: Making Indonesia 4.0” devices and aerospace industries. among physical objects from this in April 2018. Industry 4.0 refers to five Since the introduction of “Smart nationwide NB-IoT network supports industrial digital technologies: IoT, AI, Cities Initiatives” as part of its 11th applications such as flood monitoring, fleet human-machine interface, robot and Malaysia Plan (2016-2020), the management, and waste management, sensor technology, and 3D printing. country is deploying an intelligent and enables businesses and consumers to The initial prime beneficiaries are IoT network in populated cities track their energy consumption. expected to be from food and beverage, to test out urban management By 2020, at least two 5G networks would automotive, electronics, chemicals, solutions in optimising cities also be rolled out to enable the next- textile and garment industries. infrastructure and connectivity frontier commercial applications such as The government is aggressively pushing and enhancing the livability for driverless cars and virtual reality content its smart city initiatives as part of citizens. It is also set to adopt 5G streaming services. Industry 4.0. Under its “Movement to 100 technology in the near future — Various other plans to catalyse Singapore’s Smart City” plan, Indonesia is using IoT plans are afoot to develop a holistic progress toward a digital society include to develop smart cities in Jakarta, and strategy for 5G deployment in equipping the workforce with data science has installed about 400m sensor devices areas such as health care, media and future skills, helping SMEs build across the country as part of the pilot and entertainment, automotive, stronger digital capabilities, and facilitating phase to achieve “smart connectivity, manufacturing, public safety, the development of a cashless society.13, 14, 15 smart solutions and smart user.”9, 10 agriculture and education.11, 12

31 DIGITAL

Challenges with Transformation Figure 12: Issues impacting digital successes Digital transformation creates Lack of access to digital talent significant opportunities for the 64.7% SMEs but is a difficult proposition to deliver on, with organisational Pressure to focus on immediate, instead of longer-term benefits commitment not necessarily 64.7%64.9% translating to successful application. The core idea is Need to balance innovation with digital security not to utilise new technology 64.4% to merely replicate an existing product, service or solution Difficulty in measuring digital successes in a digital form, but ideally, 64.4% to enhance these offerings to support superior customer Challenges in up- or reskilling existing staff engagements and potentially 62.5% new sources of income. Respondents face these core IT limitations from legacy architectures challenges in implementing an 60.9%

2020 effective digital strategy. Not knowing which new technology to implement Procuring or upskilling talent 60.9%

It appears that digital Regulatory restrictions or scrutiny

VOL. 55 NO. 1 • transformation is as much a

• 59.5% cultural as a technological endeavor. Among the top five Uncertainty around how to align digital with the hindrances are the lack of access broader strategy to digital experts (64.7%) and 58.2% MANAGEMENT difficulties for existing staff to reskill and transition toward a Stalled transformation after an initial period of progress digital-first culture (62.5%). 56.8% One of the toughest challenges is securing qualified Limited benefits as these technologies are not digital talent like data scientists adopted industry-wide or across borders and social marketers. Individuals 55.2% with the relevant skillsets are scarce, particularly more so On a scale of 1 (not challenging) to 5 (very challenging), percentage of in the emerging markets in respondents ranking the impact of these issues on digital strategy as a 4 or 5. Southeast Asia as digitalisation outpaces the supply of human resources that can deliver on constant experimentation and suggesting that about 43% it. This issue extends beyond learning. of IT executives across the just needing to invest to procure Correspondingly, the need to ASEAN markets do not have the digital talent but to appropriately reskill and transition existing necessary talent to build digital align resources with digital staff toward a digital-first solutions.16 strategies, and to foster a mindset is important. This is a This lack of new digital talent corporate culture that embraces pressing concern with research can be seen in markets such as

32 FEATURE The Future of Asia

By McKinsey Global Institute 2020 VOL. 55 NO. 1 • • MANAGEMENT

Asian flows and networks are defining the next phase of globalisation

sia is the world’s largest regional economy, Asia is increasingly becoming the world’s center. and its power is expected to grow as its Between 2000 and 2017, its share of global real constituent economies integrate more deeply GDP in purchasing-power-parity terms rose from Awith one another in trade, innovation, and culture 32 to 42 percent; its share of global consumption and people flows. Asia will fuel and shape the next from 23 to 28 percent; and its share of the world’s phase of globalisation in what can justifiably be middle classes from 23 to 40 percent. By 2040, called the Asian Century. those three measures of scale are expected to

38 FEATURE

increase further to 52, 39, and 54 (2) China, large and distinct in global trade leading to the percent, respectively. Although enough to stand on its own, formation of Asia-for-Asia Asia faces challenges such acts as a regional anchor and supply chains. Second, Asian as growing risks in financial a connectivity and innovation networks of capital, ideas, systems, inequality, and pressure platform; (3) Emerging Asia and technologies are forming on the environment, Asia’s provides labor and long-term powerful “innovation” hubs, medium-to long-term growth market growth potential, and enabling the leapfrogging of outlook appears robust. is culturally diverse; and (4) Asian countries through a Global flows are shifting Frontier Asia and India accesses multilocal innovation network. toward Asia on seven of eight a broad base of trade partners Third, “culture and mobility” dimensions—trade, capital, and investors, and provides networks are developing as people, knowledge, transport, growth opportunities. The Asian scale and people flows culture, resources, and the complementary nature of these can create the next global environment. The only flow groups can make Asia more entertainment blockbuster and that has declined is waste prosperous and resilient. stimulate large value creation (environment). From 2007 to The integration and opportunities in adjacent 2017, Asia’s share of global intraregional flows across areas such as tourism. These goods trade rose from 27 to different Asias are creating Asian networks can turn 33 percent, of global capital powerful networks, with “unknown” cities into new hubs flows from 13 to 23 percent, of new urban hubs and spokes that companies can consider 2020 worldwide patents from 52 to 65 emerging rapidly. We highlight as destinations for future percent (although its share of IP three major networks. First, investment. charges has remained constant an “industrialisation” network Although Asia still faces

at around 25 percent), and of is developing with rising risks and challenges, decision VOL. 55 NO. 1 • global container-shipping traffic consumption, maturing domestic makers need to be prepared • from 59 to 62 percent. value chains, and uncertainties to win in the Asian Century. Asia is becoming more Asian They need to be relevant to as intraregional flows expand— Asia by joining Asian flows moving within the region are 60 and networks and offer what MANAGEMENT percent of goods traded by Asian Asia needs; protect from and economies, 59 percent of foreign prepare for risks by responding direct investment, 74 percent Asia will fuel to environmental challenges, of Asian air travelers, and 71 and shape the filling skills gaps, and enhancing percent of Asian investment in institutional capabilities; rethink startups. next phase of the Asian operating model Asia is diverse but globalisation to unlock opportunities from complementary. Based on complementary characteristics scale, economic development, in what can of the multiple Asias; and interaction within Asia, and justifiably be forge a stronger framework connectedness with the world, for intraregional collaboration, we distinguished four Asias called the Asian including, for instance, an among many: (1) Advanced Asia effective mechanism for provides significant capital and Century. resolving disputes and facilitating technology to its neighbors; more flows beyond trade.

39 FEATURE

Asian Flows and Networks: Redefining Globalisation Asia is becoming bigger and more integrated

Trade Capital People Knowledge Transport Bigger (goods) (FDI) (travelers) (patents) (cargo) Share of global flows 65 64 58 52 40 33 33 27 26 12 More integrated Intraregional share of total flows, % 60 59 74 71 55

Asia is diverse, but also complementary

Concentration Advance Emerging Frontier Asia Category Metric Asia China Asia and India

2020 569 1,395 33 50 Patents, 2017 Innovation Thousand

1.1 4.4 4.7 5.7 VOL. 55 NO. 1 •

• GDP growth, Market 2017–40 CAGR, %

-20 -132 80 332

MANAGEMENT Growth in working- Labor age population, 2017–40 Million

378 73 -153 -218 Net FDI outflow, Capital 2013–17 $ million

Advanced Asia China 7 2 13 14 Number of Emerging Asia Culture different official Frontier Asia and India diversity languages

Asia’s integration is producing three powerful regional networks

Industrialisation Innovation Culture and mobility Asia-for-Asia supply chains Asian capital, ideas, and technologies Asia is a growing hub are emerging due to rising are enabling leapfrogging to multi- for people flows and a consumption and maturing local innovation across the region rising cultural force domestic value chains

40 ABOUT LYNAS MALAYSIA SDN. BHD.

Lynas Malaysia is the largest and most modern Rare Earths we encourage reuse and recycling and engage in activities plant in the world, designed on best practice sustainability and develop technologies that help conserve the natural principles, supporting Malaysia’s Industry 4.0 vision and environment. In these ways, Lynas strives to reduce our economic development and is a centre for rare earths excellence. environmental burden at every level of our business activities.

As the world’s second largest producer of Rare Earths and In addition to these areas of focus, Lynas engages with the only significant outside China supplier, Lynas is uniquely stakeholders in many ways on an ongoing basis – ranging from positioned Rare Earth materials are essential for today’s an annual customer satisfaction survey to regular dialogue automotive, electronics & appliances, automation, wind turbines with our local communities through information and education and oil & gas industries as well as eco-friendly technologies like programs, as well as community partnerships. electric vehicles. As active and engaged members of our local communities, In 2019 Lynas Corporation Ltd became a signatory to the United Lynas and our employees actively participate in community Nations Global Compact (UNGC), released its first Sustainability activities, and members of our local communities actively Report and was awarded a Gold medal CSR rating for Lynas participate in Lynas activities. Community investments across Malaysia’s performance across the environment, labour and our operations included funding for projects in the areas of human rights, ethics and sustainable procurement. Ranking economic diversificatin, local employment and training, culture Lynas Malaysia among the top 5% of organisations evaluated. and heritage, education, environmental stewardship, sports and recreation, community wellness, health services, and supporting As part of its Sustainability Report, key areas were identified women and girls and disabled members of our communities. as ongoing areas of focus for the Lynas to continue to drive sustainable value creation. These include health and safety, Lynas employs local people, source from local businesses, communities and human rights, employment, environment and and make an active contribution to our local communities. emissions, waste and effluents. Our approach includes information and consultation with local communities as well as partnerships with government and • Health and safety: The health and safety of our workforce non-governmental organisations. In Malaysia, local employees and our communities is the first priority for Lynas. We represent 97% of Lynas Malaysia’s 650 strong workforce. Indirect focus on eliminating fatalities, life-changing injuries and employee numbers, including contractors and those employed occupational illnesses from our business, while reducing all at firms for whom Lynas Malaysia is the sole or major customer, workplace injuries and health impacts. At the same time, our are estimated at more than 1200 people. high standards of safety and environmental management are focused on ensuring our operations are safe for our Lynas Malaysia was proud to receive a Malaysia Best Employer communities and the environment. Brand Award Certification from the World Federation of HR Professionals in April 2019 and Asia Best Employer Brand • Communites and Human Rights: We recognize the importance Award Certification in August 2019. The most recent is Best in of supporting the communities in which we work and live Corporate Social Responsibility by Lang International (November and make it a priority to take an active role in making these 2019). These awards takes into consideration how a company communities better. We aim to make a positive contribution is combining vision with action in its people strategy, building to local employment, skills, education, health and the internal competencies, providing equal opportunities for women environment. We also support disadvantaged groups including leaders and demonstrating social responsibility. Mining and the elderly, disabled and women and girls. Chemicals have traditionally been male-dominated industries and Lynas has been proactively promoting equal opportunities for • Employment: The integrity, creativity, dedication, diversity women. In line with this, Lynas has had a key focus on increasing and drive of our employees allows us to excel. We empower participation in operating areas, including requirements that our people to achieve their personal best and we respect our qualified female applicants are included in open positions. Lynas people and their individuality. Lynas is commited to promoting continues to work diligently towards increasing employment a workplace culture that embraces diversity of thought as well opportunities for women across our organisation and promoting as diversity of ethnicity, culture, background, gender and age. women into leadership roles. • Environment and Emissions, Wastes and Effluents: Lynas The safety of our people, our communities and the environment proactively works to reduce our greenhouse gas emissions, will always be our first priority and Lynas demonstrates this conserve resources and energy, prevent contamination of the through our ISO certifications, and by ensuring compliance with air, water and soil, and limit waste generation. We develop licence conditions and international standards at our world-class and produce environmentally responsible products and chemical processing plant. OUR PRODUCTS ARE ESSENTIAL FOR MANUFACTURERS ALL OVER THE WORLD... NOW AND IN THE FUTURE

www.lynascorp.com Advancing Hand In Hand With You

KUANTAN:  KUALA LUMPUR: PT17212 Jalan Gebeng 3, Kawasan Perindustrian Gebeng, Level 23, NU Tower 2, KL Sentral, Jalan Tun Sambanthan, 26080 Kuantan, Darul Makmur, Malaysia. 50470 Kuala Lumpur, Malaysia. T: +609 582 5200/5800 | F: +609 582 5291/5292 T: +603 2727 1862 | F: +603 2727 1818 OFF THE BOOK SHELF 2020 Must Reads THIS ISSUE MIM LOVES Limitless Mind: Learn, Lead and Live Without Barriers

Author : Jo Boaler RP: RM79.90 Special Member Price: RM56.00RM 56.00

When we learn, we change what we believe and how we interact with the world. This changes who we are as people and what we can achieve. Many people grow up being told they are 'not a maths person' or perhaps 'not smart'. They come to believe their potential is limited. Now, however, the latest science has revealed that our identities are constantly in flux; when we learn new things, we can change our identities, increase our potential and broaden our capacity to receive new information.

2020 Drawing from the latest research, Professor Boaler followed thousands of school students, studied their learning practices and examined the most effective ways to transform pupils from low to high achievers. Throughout her study, Boaler has collaborated with Stanford University neuroscience experts, harnessing their expertise to reinforce her advanced understanding of learning and educational development.

VOL. 55 NO. 1 • In Limitless Mind, Boaler presents original ground-breaking research that proves that limiting beliefs really do hold us back

• from fulfilling our potential and that with a few careful life hacks we can transform our potential for good.

MANAGEMENT MORE GOOD READS 7 Secrets to Investing Like Warren Buffet

Author: Mary Buffet & Sean Seah RP: RM69.90 Special Member Price: RM49.00RM 49.00

A complete guide for beginning investors who want to understand how to invest like Warren Buffett. This is one of the first books to showcase both Warren Buffett's Value Investing technique and his life skills and habits for beginning investors. Sustainable results often come from changes in lifestyle and habits; hence, the first section of the book discusses habits that one needs to adopt to be able to invest like Warren Buffett, and prepares readers for a lifelong journey of wealth building. The second section examines specific stock-picking techniques. The authors look at timeless principles as well as latest ideas on where to find great investment ideas, and share specific financial indicators they look for in a good investment. The authors explain valuation principles and techniques that help investors decide when to buy a stock. The techniques are inspired by investor and economist, Benjamin Graham, the 'father of value investing', and are vastly different from the common Wall Street wisdom of trying to time the market. The final section of the book explains how the reader can build and track a portfolio of stocks.

46 OFF THE BOOK SHELF

Targeted: The Cambridge Analytica Whistle-blower’s Inside Story of How Big Data, Trump, and Facebook Broke Democracy and How It Can Happen Again

Author: Brittany Kaiser RP: 79.90 Special Member Price: RM56.00RM 56.00

In this explosive memoir, a political consultant and technology whistle-blower reveals the disturbing truth about the multi-billion-dollar data industry, revealing to the public how companies are getting richer using our personal information and exposing how Cambridge Analytica exploited weaknesses in privacy laws to help elect Donald Trump--and how this could easily happen again in the 2020 presidential election. When Brittany Kaiser joined Cambridge Analytica--the UK-based political consulting firm funded by conservative billionaire and Donald Trump patron Robert Mercer--she was an idealistic young professional working on her fourth degree in human rights law and international relations. A veteran of Barack Obama's 2008 campaign, Kaiser's goal was to utilize data for humanitarian purposes, most notably to prevent genocide and human rights abuses. But her experience inside Cambridge Analytica opened her eyes to the 2020 tremendous risks that this unregulated industry poses to privacy and democracy.

Ultralearning: Master Hard Skills, Outsmart the VOL. 55 NO. 1 • Competition, and Accelerate Your Career •

Author: Scott H. Young RP: 79.90 Special Member Price: RM56.00RM 56.00 MANAGEMENT

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For purchase of books, drop us an email at [email protected] or call 03-7711 2888 to place your orders. Offer is only valid for purchase through MIM and is not applicable to any bookstores.

47 OPINIONS Managing Confict of Interest in a Business Enterprise

By Vijaya Devan Nair, A member of MIM, OM 125677

orporations all over the globe share a common a conflict of interest as a situation where an dreadful feature and in the absence of this individual working for an entity is confronted with feature, businesses figuratively are said to choosing between the duties and demands of Cbe one that operates in the holy heaven. That their position and their own private interests. feature is known as risk! Risks created either by Below are five examples of how a conflict of 2020 forces of external events or those that we find interest may arise. hidden amongst strategic business units (SBU’s) internally in our organisations will always exist and threaten the line of sight set forth by the stewards VOL. 55 NO. 1 • of businesses as long as they remain running • businesses anywhere on this globe. Shareholders, by virtue of their capital investment, exercise their legal rights to assemble knowledgeable and skillful Risks created either by people to manoeuvre their interest and in doing MANAGEMENT so, delegate authorities to board of directors of the forces of external events or incorporated entity the shareholders had built. those that we find hidden Many enterprises’ board of directors strive to fulfill the strategic and oversight roles dictated by amongst strategic business good corporate practices indoctrinated in board units (SBU’s) internally charters. They meet regularly and make decisions within the scope of their responsibilities. Within in our organizations will the board, separate committees with appropriate always exist and threaten skills are often seen to arise to handle specialised operations. Nevertheless, the existence of the the line of sight set committees does not relinquish the board of their forth by the stewards of holistic accountability and responsibility mandated by shareholders. businesses as long as they The board of directors determines a company’s remain running businesses policy decisions, oversight and its management team and therefore exhibits overall control on anywhere on this globe. it. As much as the board exercises its control, shareholders also act in concert in controlling the company. This type of shareholders are referred to

53 OPINIONS 2020 VOL. 55 NO. 1 • • MANAGEMENT

as “controlling shareholders” collective board participation. and their controlling power Conflicts of interest are very What Defines a Confict of Interest? varies on the size of their much prevalent at the board In a corporate environment dispersed or concentrated level. This is because the context, a conflict of interest ownership. In addition, their boardroom is a dynamic place is defined as circumstances parameter of controlling power where struggles of ego, power, that are architectured through also pretty much depends on rules and authority continuously malicious decisions that paves their voting rights attached to surface, and it is not always clear the way to enrich decision each class of shares. what constitutes a conflict of makers or parties related to In the wake of overlapping interest as director duties tend them with promises of financial roles between board members to diverge from one company or non-financial gains. and the management team, to another and from country to Transparency International valuable decisions are made country. This adds even more which is a global movement and agreed by a few who hold complexity. setup with a vision to create a power without going through a world free of corruption defines

54 OPINIONS

chain management. The board their personal interests from chairman’s wife is the owner of their professional duties. It is the new vendor company. understood from some scientific Here, a conflict of interest brain experiments in the past, has already taken place when the human brain is divided into the chairman sits in the board limbic and cognitive areas in the meeting and participates in the prefrontal cortex. selection of the new vendor. The Biases arise from the decision made will bring personal exploited psychological status of gains to his family members. human brain. As mentioned, the Example 3: A CEO of an human brain is not wired strong organisation who is also the enough to hold and therefore board chairman of an enterprise is weakened by the intrusion used uses inside information to of self-servicing elements into make profitable investment to our brain’s cognitive system. enrich himself without getting Conflict of interests arise authorisation from the board. when the cognitive system is Example 4: An ex-board compromised. So how then do director with knowledge of we solve the threat of biases property, information and product human minds and subsequently 2020 of his previous company, opens reduce the risk of conflict of another new company with interest? similar business operation.

Here, although the director VOL. 55 NO. 1 • has left the company he is still • bound to the ‘conflict of interest’ clause. Example 5: When an employee Confict of of an organisation is promoted MANAGEMENT to a supervisory position by her interest can manager because of her close lead to biases allegiance with the manager, a conflict of interest occurs! that has a Example 1: An accountant who prepares a cheque and at tendency How Does a Confict Arise? the same time authorises the to smudge cheque by unilaterally signing As explained in the examples, on it. conflict of interest can lead to integrity and Here, a conflict of interest is biases that has a tendency to ethical virtues said to have taken place when smudge integrity and ethical the accountant cashes in the virtues of a person's ability in of a person's cheque for personal gain. making the right decisions. Example 2: A board chairman, Humans are most likely to exploit ability in chairs a board meeting in which their positions for personal gains making the important decisions are made in instead of obligation to others. the selection of new vendors as Human brains are not wired hard right decisions. part of the corporations supply enough to be able to distinguish

55 OPINIONS

compliance by stakeholders and its corresponding Managing and Mitigating Risk of and for assessment of percentage of completion. Confict of Interest the overall programme’s c. Tracking of acceptance There are 2 ways of managing and effectiveness. (monthly basis) mitigating a conflict of interest. i. After compiling the They are: 2. Monitoring and inspection disclosure reports in 2(b), a. Reports (weekly basis) it is then vital to compile 1. Establishing best practices i. A summary report on statistics on resolved and a. Culture “conflict of interest” unresolved issues. This i. Form a policy to create disclosure and the provides a clearer status a culture of ethical resolution by risk owners of accepted resolution, behaviour. This policy are distributed to each unaccepted resolution and must be communicated head of department. This its corresponding accepted to all stakeholders. The step will allow them to percentage. methodology to channel the monitor compliance at their d. Others best practices policy can be structural level. i. Occasionally meet vendors initiated through training or b. Tracking of completion and suppliers and question via newsletters. (monthly basis) them on matters pertaining ii. In addition, a reward 2020 i. The reports from the heads to conflict of interests. procedure for behaviours of department are recorded These stakeholders must which is in line with the and compiled, showing be obliged to notify the risk policy will have a meaningful number of disclosures that compliance officer of any outcome. Those found has been resolved, pending potential conflicts. VOL. 55 NO. 1 • breaching the policy should ii. Setting up of helpline/ • be reprimanded. hotline calls for reporting of b. Resolution conflict of interest. i. Employ qualified people to A conflict of interest if There are 2 ways of managing

MANAGEMENT develop processes to address perceived to arise, can generate and resolve conflicts of and mitigating a conflict of negative public opinion thus interest. They are: interest. board of directors along with c. Training executive managers should put i. Conduct training programmes the interest of the enterprise for risk owners on fraud first by curbing the appearance and risks due to conflict of of the dreadful risks from interest as well as exposure misaligned interests, a.k.a to good ethical culture in conflict of interest. the company. Best practices Establishing best practices applied in the industry can also be injected into the Interested to share your views? Send us your article via email to training programme. [email protected]. d. Review *The views and thoughts expressed in i. The policies, processes and the article are the author’s own and do the training programme not reflect the opinions of the Malaysian should be reviewed for Monitoring & inspection Institute of Management.

56 REMEMBERING ICONS MIM Court of Emeritus Fellows

The Late Honourable Chief Justice (Rtd.) Yong Pung How

The Late Honourable Chief Barrister-At-Law of London’s Following riots in Malaysia Justice (Rtd.) Yong Pung How Inner Temple. in 1969, Chief Justice Yong will always be remembered as He then practiced criminal migrated to Singapore with his the formidable chief justice who law as a partner at the law firm family. In 1971, he left the legal always looked out for those with Shook Lin & Bok, of which his world to join OCBC as a director less power and money, and made father was a founding partner. and eventually became the sure lawyers were on their toes He left in 1955 to serve as the Chairman and Chief Executive and thinking on their feet. He Chairman of the Malayan Public Officer of the organisation. shook the Singapore Bar out Services Arbitration Tribunal, and After nearly two decades of its lethargy and left behind moved to the Malaysian Industrial away from the law, Chief Justice 2020 a legacy that of a modernised Court. In 1964, Chief Justice Yong Yong returned to law and was judicial system. established the Singapore branch appointed Supreme Court judge He was not only an illustrious of Messrs Shook Lin & Bok. in 1989. Just over a year later, and outstanding public servant, That year, he also became the he was appointed as the Chief but an ardent champion of Chairman of Malayan Airways. Justice. His innovating ideas VOL. 55 NO. 1 • education and a generous He then assumed the role of and forward-thinking measures, • benefactor to the National the Vice- Chairman of Malayan transformed the Singapore legal University of Singapore. A Banking Berhad. system into one of the best in the humble man, Chief Justice Yong world. MANAGEMENT once said in an interview that Chief Justice Yong was his ‘finest hour’ was the day also actively involved with he married his wife, and that the Malaysian Institute of even after 5 decades, he still Management since its early considers her his best friend. years. The National Institute “To stay happily married with a of Management was officially good reputation and a close-knit formed on the 29th of January family must be one of anybody's 1966, in response to the growing happiest achievements in life, need for more managers whatever the work you do.”- to underwrite the nation’s Chief Justice (Rtd.) Yong Pung development. In October of 1966, How, 2004. the Institute organised a one-day Chief Justice Yong read law at seminar on the Companies Act at Downing College in Cambridge Chief Justice Yong Pung How's which Chief Justice Yong was a University. In 1949, after the transformation of the court system is speaker. well documented. He single-handedly war, he continued his studies conceived and drove its modernisation, Dr. Tarcicius Chin, Former and graduated with a Bachelor taking the courts from the practices MIM Chairman (1989-1991) and inherited from a 19th century colonial of Arts degree from Cambridge system to the 21st century. Court of Emeritus Fellows has University and qualified as a Photo Credit: The Star fond memories of Chief Justice

57 Yong and said, “During the early Mohar Raja Badiozaman. He days of MIM, many members of continued for another term with MIM contributed directly to the Y.M. Raja Tan Sri Ir. Zainal bin functioning of the Institute, and Raja Sulaiman and was elected Yong Pung How contributed by into the Court of Emeritus giving talks at tea meetings.” “He Fellows on the 28th of March and his fellow representative from 1975. the private sector contributed Former Chief Justice Yong Mr Yong Pung How (left) with Mr Lee Kuan much time and professional Pung How passed away on the Yew and Madam on the expertise to support the 9th of January 2020. He was 93. banks of the River Cam in Cambridge in the summer of 1949. Mr Yong and Mr Lee fledging national management His passion and contributions became friends at university. organisation,” he added. towards the Institute will never Photo Credit: The Straits Times In 1968, Chief Justice Yong be forgotten and will continue to became the Vice President of MIM be part of our history. alongside YABhg Mulia Raja Tun

Allahyarham Tan Sri Dato’ Dr. Abdul Aziz Abdul Rahman 2020

Allahyarham Tan Sri Dato’ Dr. “Civil aviation is close to my specialises in this. You may say Abdul Aziz Abdul Rahman left heart till this day. I reckon it is that I know it like the palm of my behind a legacy, one that will a God-given talent. I don’t think hand,” said Tan Sri Abdul Aziz

VOL. 55 NO. 1 • forever be etched in the history of there is anyone alive today who about his love for MAS. • our national carrier. As CEO and Tan Sri Abdul Aziz grew up the first managing director of during the Japanese occupation, Malaysian Airlines, his approach and attributes his success to was to serve, making him an the discipline and diligence MANAGEMENT integral icon of the corporate emphasised by the Japanese. world. Described as mild- Qualified with a Barrister-at- mannered and polite, he was Law from Lincoln’s Inn, London, well liked as he treated others he joined the civil service as around him with the utmost an administrative officer and respect and consideration. later became a magistrate and He was an active member of sessions court president. The civil society groups and amongst racial riots in 1969, saw Tan others worked towards the Sri Abdul Aziz appointed as the sustainable town planning of Legal Counsel and Legal Officer Kuala Lumpur as the chairman of the National Operations of the Save Kuala Lumpur Council, where he played a vital Coalition. In an interview in role in drafting laws to protect 2014, Tan Sri Aziz stated that the nation against incidences the proudest achievement of such as May 13th. He left the his life was helping turn MAS service after 15 years and moved Tan Sri Abdul Aziz Abdul Rahman, in district from something very small, officer’s uniform, with his wife Puan Sri Wan to a role to help in creating into a global, award-winning, Zakiah Ibrahim in 1960. Malaysia’s own airlines as international airline. Photo Credit: The Star (file pix) Malaysia and Singapore split.

58 Tan Sri Abdul Aziz became Emeritus Fellow, Dr. Tarcisius RMIT University in Australia. the company secretary for Chin, recalls how Tan Sri Abdul According to Dr. Tarcisius Chin, Malaysia Airlines in 1971, Aziz took his role as Fellow Tan Sri Abdul Aziz took keen having been appointed by the seriously and despite his busy interest in the progress of these then Prime Minister, Tun Abdul schedule, constantly made the programmes and assisted in the Razak Hussein himself. His hard effort to attend the quarterly continuing development of the work and dedication, made him Court of Fellows meetings held Institute. the legal affairs director and at the Management House in Tan Sri Dr. Abdul Aziz eventually the Chief Executive Jalan Ampang, Kuala Lumpur. Abdul Rahman passed away Officer and Managing Director of In the 1990s, MIM became the on the 22nd of January 2020 the airlines. apex centre for the training and from cancer complications. He took the national airlines to development of managers and The Malaysian Institute of great heights, helping it soar not executives, offering international Management mourns the only in profits, but international academic degrees in loss of a distinguished figure. accolades for its achievements collaboration with the University His contributions towards in its inflight service. During his of Bath, England; Maastricht the institution will always be tenure, the company saw the University, Netherlands and remembered. immense growth of passenger traffic, aircraft number and

routes. It wasn’t as easy feat, as 2020 the airline had suffered a RM39 million deficit and was in dire need of a RM70 million rolling fund. Tan Sri retired in 1991, leaving Malaysia Airlines with a VOL. 55 NO. 1 • • surplus of RM5 billion in cash. A lawyer by qualification, Tan Sri Abdul Aziz donned on his

robes and continued his passion MANAGEMENT in law after retirement. A highly respected corporate figure, Tan Sri Abdul Aziz became the Court of Emeritus Fellow of the Malaysian Institute of Management on the 10th of July Aziz with his 40-year-old replica of a Boeing 707. He holds his role in helping MAS grow from a 1987. Former MIM Chairman small domestic carrier into the international award-winning airline it was in the 1990s as one (1989-1991) and Court of of his proudest achievements. Photo Credit: SAM THAM/The Star

The legacy of heroes is the memory of a great name and the inheritance of a great example. -Benjamin Disraeli

59 MIM HIGHLIGHTS 2020 VOL. 55 NO. 1 • • MANAGEMENT YABhg Tun Daim Zainuddin Returns to the TAR Lecture Series

Grand Ballroom, Shangri-La Hotel, Kuala Lumpur. 18 December 2019

Six industry stalwarts inducted into MIM’s Court of Emeritus Fellows.

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ormer finance minister and chairman of the Council of Eminent Persons YABhg Tun Daim Zainuddin once again graced the TAR Lecture FSeries stage to present his keynote address. In 1996, YABhg Tun Daim Zainuddin had spoke about “Managing Technology for Growth and Development” at the 17th Lecture Series. Then being the economic advisor to the Malaysian government, his foresightedness was prevalent as he emphasised the need for our workforce to be technologically fluent to compete in the next century. This time, at the 29th TAR Lecture Series held on December 18th, 2019, YABhg Tun Daim Zainuddin openly shared his wisdom and insights on what the future holds for Malaysians and the nation. He has earned the distinction of being a hard- driving technocrat and reputed as one of Malaysia’s ablest economic architects. So, it was only apt that 2020 his address was titled “The Future of Malaysia: Building a Sustainable Ecosystem for All”. The TAR Lecture Series is a prestigious

event inaugurated by the Malaysian Institute of VOL. 55 NO. 1 • Management (MIM) in 1970 to commemorate the • premiership of Malaysia’s 1st Prime Minister, the late Tunku Abdul Rahman Putra Al-Haj. It is used as a platform to foster thought- leadership, encourage interaction and incubate MANAGEMENT strategies for future leadership skills. It aims to showcase some of the most sought-after and forward-thinking leaders from around the globe, sharing insights on challenges and issues of a dynamic and globalised economy and society. Since its inception, the series has showcased leaders and dignitaries, including Malaysian constitutional monarchs and Prime Ministers, as well as esteemed, local and international high- profile individuals. In his welcoming speech, MIM Chairman, YBhg Tan Sri Megat Najmuddin Megat Khas had this to say about YABhg Tun Daim Zainuddin. “Bending it to a new will, required a Council “More recently, it was a case of who do you turn of Eminent Persons to deliberate and make to when the going gets tough, which came with recommendations in a time frame of 100 days as the change in government and the daunting task the first order of business. of dealing with an entrenched administration of 61 “And, of course, our Prime Minister turns to years. YABhg Tun Daim Zainuddin.”

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Tun Daim’s Life Before Politics He was one of 13 children born to a clerk in the Kedah state service and a homemaker mother. He had his early education in a Malay school, before going to the Sultan Hamid College, where Prime Minister Tun Dr Mahathir Mohamad himself had attended. Since YABhg Tun Daim Zainuddin did not know about his selection into Brinsford Teacher College in England, he sought to become a lawyer. He went to Lincoln’s Inn, London before being called to the British Bar in 1959 at the age of 21. He kicked off his career with 2020 Pillai and Co and then Shearn and Delamore in Kuala Lumpur before moving to a legal firm in . VOL. 55 NO. 1 • • MANAGEMENT

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He added: “Automation and robotics mean that less labour is required, and VOL. 55 NO. 1 • fewer people forced into triple-D jobs–dirty, • dangerous and demeaning. “Farming then becomes a high quality occupation, one that generates a good steady income and one that does not require MANAGEMENT hours of hard labour in the fields.” His plan of focusing on smallholders and farmers would allow Malaysia to work towards poverty alleviation and eradication. “We must identify ways to improve their incomes whether through commercialisation of waste products, downstream activities, reduced production costs or diversification of crops. “Besides the farmers themselves, the modernised agriculture sector will create jobs along the supply chain,” he said, citing researchers, analysts, drone manufacturers and food technicians as examples. He said more is needed to be done such as the removal of roadblocks for farmers who lack access to land and financing.

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“It’s very difficult to get land because it’s a state “Leadership has become increasingly difficult, matter. Acres of idle land are just being wasted. complex and multi-faceted in today’s globalised “I’ve written to the state governments asking to world. We wish to recognise the strong and effective give land. Some were very encouraging and replied leadership these individuals have showcased ‘yes’ while some didn’t even reply.” not only in their organisations, but across their In his proposal was also the creation of a industry,” said MIM Chairman, YBhg Tan Sri Megat government agency to address these issues. Najmuddin Megat Khas. “I’m confident if the government does this, The recipients were: enough people will want to go into this sector and 1. Nestle Malaysia Chairman, YAM Tan Sri Syed we’ll be able to reduce our food costs and there will Zainol Anwar Syed Putera Jamalullail, be excess to export. 2. Penang Police Chief (Rtd), YBhg Dato’ Seri A. “We will be able to reduce our food bill by 30% in Thaiveegan Arumugam, three years.” 3. YTL Corporation Berhad Executive Director, YBhg Dato’ Yeoh Soo Min, Court of Emeritus Fellows 4. Bintulu Port Holdings Berhad Group Chief Executive Officer, YBhg Dato Mohammad On the same afternoon at Shangri-La Hotel Medan Abdullah, Kuala Lumpur, guests witnessed the conferment 5. Key Accounts Management, Asia Pacific for ceremony of MIM’s newest Court of Emeritus AECOM, YBhg Datuk Zainal Amanshah and

2020 Fellows. 6. Melaka Manipal Medical College’s Chairman of This is the highest category of MIM membership, the Board of Governors, YBrs Dr Arun Kumar. awarded to outstanding individuals who have The conferments were presented by MIM contributed significantly to the field of management President YABhg Tun Mohammed Hanif Omar and and leadership.

VOL. 55 NO. 1 • witnessed by YABhg Tun Daim Zainuddin. • MANAGEMENT

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