THE corporate world is undergoing rapid change, the sort of                                                                                           
change that forces managers to play a vital and crucial role                                                                                          
at the very centre, more often than not of totally unfamiliar                                                                                         
situations.                                                                                                                                           
                                                                                                                                                      
It does not require any profound perception to know that the                                                                                          
good old days of management-based paternalism, the arrogant                                                                                           
use of power, and public-be-damned attitude, are well and                                                                                             
truly over.                                                                                                                                           
                                                                                                                                                      
Today's managers perform in a continually changing social,                                                                                            
political, economic and technological environment, with all                                                                                           
the attendant implications and complications.                                                                                                         
                                                                                                                                                      
They are no longer manning little trading outposts along the                                                                                          
Rejang or the Perak river. They are, whether they know it or                                                                                          
not, managing change.                                                                                                                                 
                                                                                                                                                      
One of the most pressing current issues facing managers is                                                                                            
business ethics, a subject that is attracting a great deal of                                                                                         
world attention, largely as a result of heightened public                                                                                             
awareness that bad governance, whether in the corporate or                                                                                            
public sector, contributes directly to corruption.                                                                                                    
                                                                                                                                                      
All of us should be concerned about its impact on humanitarian                                                                                        
ethical and utilitarian values.                                                                                                                       
                                                                                                                                                      
There is ample evidence that corruption distorts development                                                                                          
undermines and compromises a society's integrity, and disrupts                                                                                        
market operations, and in the process deprives ordinary                                                                                               
citizens of those benefits that should properly accrue to                                                                                             
them.                                                                                                                                                 
                                                                                                                                                      
What can we do to confront the issue?                                                                                                                 
                                                                                                                                                      
We need to begin by closing windows of opportunity for                                                                                                
corruption, and this can best be done by examining and                                                                                                
reviewing the existing legal framework, systems, and practices                                                                                        
to make them more effective and transparent.                                                                                                          
                                                                                                                                                      
This is crucial not only from the point of view of improving                                                                                          
business confidence, but also that of ensuring the system is                                                                                          
not open to abuse.                                                                                                                                    
                                                                                                                                                      
The private sector, often portrayed as the aggrieved party in                                                                                         
dealings with government regulatory bodies, must play its part                                                                                        
in developing a sustainable business climate which makes it                                                                                           
possible to conduct business without bribery.                                                                                                         
                                                                                                                                                      
It must put its own house in order, for example, by adopting                                                                                          
voluntary codes of conduct and, better still, developing and                                                                                          
adopting a national code of business ethics specifically                                                                                              
prohibiting bribery.                                                                                                                                  
                                                                                                                                                      
In this connection, it should look seriously at. what                                                                                                 
transparency International, the global coalition against                                                                                              
corruption, calls an "Integrity Pact" which simply means that                                                                               
all parties bidding for contracts sign an undertaking not to                                                                                          
pay bribes.                                                                                                                                           
                                                                                                                                                      
Any breach of this pledge will render the offending party                                                                                             
ineligible for participation in any future bid.                                                                                                       
                                                                                                                                                      
I know this is an idea many businessmen shy away from. But a                                                                                          
commitment to such a pact as part of a national code of.                                                                                              
business ethics offers great benefits, in that the cost of                                                                                            
doing business, without bribery, is much less than it would                                                                                           
otherwise be.                                                                                                                                         
                                                                                                                                                      
The corporate sector should go a step further and pressure the                                                                                        
Government to become either a signatory to the OECD Convention                                                                                        
which criminalises both domestic and foreign bribery or adopt                                                                                         
similar national legislation.                                                                                                                         
                                                                                                                                                      
This will have the effect of sending a clear signal to our                                                                                            
foreign trading partners, in particular, that bribery in any                                                                                          
shape or form, is not permissible in our country.                                                                                                     
                                                                                                                                                      
While there is a need for voluntary codes of conduct for the                                                                                          
"regulation", if you like, of business transactions, they                                                                                   
should go beyond the mere mechanical regulation of corporate                                                                                          
business behaviour.                                                                                                                                   
                                                                                                                                                      
Let me highlight what I consider to be some of the Most                                                                                               
important components of an effective code of business ethics:                                                                                         
                                                                                                                                                      
1. A code of ethics or conduct involves a voluntary commitment                                                                                        
to "best practice" - a public declaration, no less, of what                                                                                 
you and your organization stand for.                                                                                                                  
                                                                                                                                                      
I should go so far as to suggest a code like the national                                                                                             
constitution; its integrity must never be neutralised.                                                                                                
                                                                                                                                                      
2. A code is as good as the people who operate it, allowing                                                                                           
for the fact that all too often, you have to rely on the                                                                                              
honour system to see you through.                                                                                                                     
                                                                                                                                                      
Although, in reality, a code, if left to its own devices, is                                                                                          
nothing more than an article of faith, it can, however, become                                                                                        
an important tool for securing compliance by putting in place,                                                                                        
where appropriate, monitoring mechanisms and other management                                                                                         
systems.                                                                                                                                              
                                                                                                                                                      
Last, but not least, there is the need to recognise the place                                                                                         
of transparency and accountability in the business equation.                                                                                          
                                                                                                                                                      
Needless to say, other equally important ingredients, such as                                                                                         
trusteeship and stewardship, form the cornerstone of personal                                                                                         
and corporate integrity systems. These are not bargaining                                                                                             
chips and are non-negotiable.                                                                                                                         
                                                                                                                                                      
A typical "best practice" code of conduct sets out to clarify                                                                               
a company's policies which aim, primarily, to protect the                                                                                             
company, its directors and employees from unethical or corrupt                                                                                        
business practices.                                                                                                                                   
                                                                                                                                                      
For example, directors and employees who have dealings with                                                                                           
customers, suppliers and others must act in the sole                                                                                                  
interests, and to the sole advantage, of the company, to the                                                                                          
exclusion of any consideration of personal advantage, bearing                                                                                         
in mind always the absolute importance of complying with the                                                                                          
laws of the country.                                                                                                                                  
                                                                                                                                                      
All concerned must realise that the code is there not only to                                                                                         
protect the interests of the company but theirs as well.                                                                                              
                                                                                                                                                      
The private sector, I am sad to say is by and large                                                                                                   
opportunistic and takes its cue from the social economic and                                                                                          
political environment in which it operates.                                                                                                           
                                                                                                                                                      
That having been said, it can make a significant contribution                                                                                         
to the general good.                                                                                                                                  
                                                                                                                                                      
Peter Eigen, President of Transparency International, speaking                                                                                        
at the 8th International Anti-Corruption Conference in 1997,                                                                                          
in Lima, Peru, argued that while it is governments that have a                                                                                        
formal responsibility to reform national and international                                                                                            
integrity systems, "the private sector has a unique input to                                                                                     
make."                                                                                                                                           
                                                                                                                                                      
"It is the dominant engine of the economy, and an effective                                                                                      
anti-corruption campaign can hardly be sustained against the                                                                                          
opposition of the corporate community."                                                                                                          
                                                                                                                                                      
Let no one, therefore, underestimate the power for good that                                                                                          
the private sector can wield.                                                                                                                         
                                                                                                                                                      
It is extremely encouraging that the private sector in our                                                                                            
country is beginning to be concerned about the colossal damage                                                                                        
done to our national economy and prestige by corruption, a                                                                                            
word defined by Transparency International as the "abuse of                                                                                      
entrusted power for private profit."                                                                                                             
                                                                                                                                                      
The corporate sector is not exempt from excesses bordering on                                                                                         
the criminal, and the Tun Hussein Onn Renewal Awards programme                                                                                        
reinforces, in a spectacularly unambiguous manner, our                                                                                                
collective concerns about declining standards of personal and                                                                                         
public behaviour.                                                                                                                                     
                                                                                                                                                      
Many of these anxieties come within the general scope of our                                                                                          
discussion on what constitutes good corporate governance.                                                                                             
                                                                                                                                                      
No discussion on Malaysian corporate governance is complete                                                                                           
without reference to the present economic turmoil, and role,                                                                                          
if that is the right word, of the corporate sector in bringing                                                                                        
about the collapse of our economic and financial base.                                                                                                
                                                                                                                                                      
There can be no argument that in the euphoria of the perceived                                                                                        
unstoppable growth, and driven by greed, the private sector                                                                                           
embraced the culture of the casino, with totally predictable                                                                                          
results.                                                                                                                                              
                                                                                                                                                      
Traditional prudence was thrown to the winds; banks competed                                                                                          
to lend, as if there was no tomorrow, on criteria that would                                                                                          
have made a Chettier of old blush.                                                                                                                    
                                                                                                                                                      
The current economic turmoil should be looked at in positive                                                                                          
terms. It provides a compelling need for introspection, for a                                                                                         
thorough self-examination of what has gone so badly wrong with                                                                                        
our economic management.                                                                                                                              
                                                                                                                                                      
This is a time to ask all the right questions, however                                                                                                
difficult it might be, and to try and find, at least, some of                                                                                         
the real answers to our problems and stop blaming Mr Soros and                                                                                        
others of his ilk.                                                                                                                                    
                                                                                                                                                      
We must accept that external forces, while influential, are                                                                                           
only as strong as our internal weaknesses.                                                                                                            
                                                                                                                                                      
This is also a time to challenge operating systems, policies                                                                                          
and procedures hitherto accepted at face value.                                                                                                       
                                                                                                                                                      
The globalisation of the economy, which demands greater                                                                                               
transparency and accountability in government and private                                                                                             
sector transactions, leaves us with no choice but to adopt                                                                                            
"best practices" in economic and financial management.                                                                                      
                                                                                                                                                      
What do we mean by "best practices"? Nothing more than putting                                                                              
in place measures that help strengthen the economy, such as                                                                                           
full disclosures by banking and other business institutions of                                                                                        
all relevant information so that the public can make informed                                                                                         
judgments, and decisions on matters that affect their ringgit,                                                                                        
and, for good measure, a clear understanding of what                                                                                                  
international institutional, as well as domestic investors,                                                                                           
expect and want from the companies in which they invest.                                                                                              
                                                                                                                                                      
Clearly, easy access to information that has public interest                                                                                          
implications, is a paramount prerequisite of good governance.                                                                                         
                                                                                                                                                      
Equally important from the investors' point of view is                                                                                                
adherence on our part to the twin pillars of an integrity                                                                                             
system, namely transparency and accountability.                                                                                                       
                                                                                                                                                      
The effects of a perceived neglect of transparency and                                                                                                
accountability in the way we have been managing our economic                                                                                          
and financial affairs in this region have been devastating, to                                                                                        
say the least.                                                                                                                                        
                                                                                                                                                      
What the investors have seen of our business culture has given                                                                                        
them neither the level of comfort nor the degree of confidence                                                                                        
they require for the protection of their investments in the                                                                                           
longer term.                                                                                                                                          
                                                                                                                                                      
The Secretary-General of the Malaysian Institute of Corporate                                                                                         
Governance, Khadijah Abdullah, said of Malaysian business                                                                                             
ethics in a recent press statement: "In Malaysia, corporate                                                                                      
governance is mixed but generally it is bad."                                                                                                    
                                                                                                                                                      
Just as it is no longer acceptable for the Government to award                                                                                        
privatisation projects on a negotiated basis behind closed                                                                                            
doors, it is equally no longer acceptable for the corporate                                                                                           
sector to disregard the needs and legitimate concerns of the                                                                                          
society in which it operates.                                                                                                                         
                                                                                                                                                      
For the overwhelming majority or us, we do not want more of                                                                                           
the same; we want a new business culture that is grounded in                                                                                          
moral and spiritual excellency that we have a right to, expect                                                                                        
in a civilised and caring democratic Malaysia.                                                                                                        
                                                                                                                                                      
We want to see ourselves as a nation that can scale the                                                                                               
Everest of integrity.                                                                                                                                 
                                                                                                                                                      
We want foreigners to see us as a nation that conducts our                                                                                            
national political, economic and social affairs with                                                                                                  
transparency and accountability. Only then will the slogan                                                                                            
Malaysia Boleh ring true.