By: CHEAH FOO SEONG                                                                                                                                   
                                                                                                                                                      
The Registrar of Companies Corporate Directors' Training                                                                                              
Programme (ROC CDTP) was launched in May 2001 by the Minister of                                                                                      
Domestic Trade and Consumer Affairs with nominee directors of                                                                                         
Permodalan Nasional Berhad (PNB) in Kuala Lumpur.  Since then,                                                                                        
the reception by directors of private companies has been rather                                                                                       
mixed.                                                                                                                                                
                                                                                                                                                      
According to ROC's record, there are more than 880,000 corporate                                                                                      
directors in more than 560,000 companies incorporated under the                                                                                       
Companies Act 1965. These private companies' directors will have                                                                                      
to go through a one-and-a-half-day training programme consisting                                                                                      
of six modules designed by the ROC.  The language to be used may                                                                                      
be Malay, English, Chinese or Tamil so that directors from all                                                                                        
backgrounds would not be handicapped to access the training                                                                                           
programme.                                                                                                                                            
                                                                                                                                                      
The training is expected to enhance directors' knowledge and                                                                                          
understanding of corporate governance, law and practice of                                                                                            
company meetings, duties and responsibilities as directors, and                                                                                       
the awareness of economic crimes and corrupt practices.                                                                                               
                                                                                                                                                      
It is estimated that to date, at least 12,000 private company                                                                                         
directors have gone through the programme and received their                                                                                          
certificate of achievement, but it is a drop in the ocean, as                                                                                         
there are still thousands of directors who have yet to undergo                                                                                        
the training waiting for some form of legal enforcement to be                                                                                         
instituted by a change in law.                                                                                                                        
                                                                                                                                                      
Presently, there is no law enforcing directors to take up the                                                                                         
training programme.  But it means something for the Ministry of                                                                                       
Domestic Trade and Consumer Affairs and the current Commission                                                                                        
of Companies of Malaysia (CCM) to take an active role in                                                                                              
encouraging all directors to go for training. There should be                                                                                         
some sort of amendment to the Companies Act 1965 or even a                                                                                            
legally enforceable guideline to make directors go for training                                                                                       
in the near future, if the CDTP is going to be successful in                                                                                          
ensuring all private company directors attend training.                                                                                               
Presently, it could be the perception of directors that training                                                                                      
is a waste of time from the directors' busy schedule, but from                                                                                        
the experience and feedback of directors who have gone through                                                                                        
the CDTP, most have expressed a positive response and found the                                                                                       
CDTP very interesting and enlightening.                                                                                                               
                                                                                                                                                      
Probable mechanism of enforcing directors' training With the                                                                                          
establishment of the Companies Commission of Malaysia (CCM)                                                                                           
under the Companies Commission Act 2001, it will take over the                                                                                        
functions and powers of the Registry of Companies and the                                                                                             
Registry of Businesses under a single authority.  Under the new                                                                                       
Act, the Commission has been given functions including having                                                                                         
"to encourage and promote proper conduct among directors,                                                                                             
secretaries, managers and other officers of a corporation, and                                                                                        
self-regulation by corporations, companies, businesses, industry                                                                                      
groups and professional bodies in the corporate sector in order                                                                                       
to ensure that all corporate and business activities are                                                                                              
conducted in accordance with established norms of good corporate                                                                                      
governance."                                                                                                                                          
                                                                                                                                                      
This clause seems adequate to provide the CCM with the powers to                                                                                      
regulate directors and company secretaries. This would mean that                                                                                      
the CCM may draft such regulations and guidelines to enforce the                                                                                      
training of directors and even company secretaries.  Training                                                                                         
should be understood as acquiring new skills and competency in                                                                                        
the work place. It is different in many ways from acquiring                                                                                           
academic knowledge and theory on a subject matter. Directors                                                                                          
should look at the CCM Directors' Training Programme as a                                                                                             
management development scheme to enhance their practices and                                                                                          
appreciation of their duties and liabilities as directors                                                                                             
besides knowing the expectation of their performances in                                                                                              
corporate governance.                                                                                                                                 
                                                                                                                                                      
Drucker (1955) wrote in Practice of Management that "development                                                                                      
must embrace all managers in the enterprise. It must aim at                                                                                           
challenging all managers to growth and self-development. It must                                                                                      
focus on performance rather than on promise, and on tomorrow's                                                                                        
requirements rather than of today."                                                                                                                   
                                                                                                                                                      
Drucker's statement indicates the importance and the necessity                                                                                        
of preparing managers (directors included) for change in                                                                                              
organisations adapting to the ever- changing business                                                                                                 
environment and legal framework.                                                                                                                      
                                                                                                                                                      
In today's business world, the possession of relevant knowledge                                                                                       
(information) and using it in the most advantageous way for the                                                                                       
organisation will give it a competitive edge over others. A                                                                                           
business strategy developed by knowledge (information) will help                                                                                      
a company achieve what Drucker calls "purposefully                                                                                                    
opportunistic." Therefore, a trained director will have better                                                                                        
knowledge (information) of good corporate governance principles                                                                                       
than one who is not trained. It should make him a better person                                                                                       
to direct the affairs of the company in relation to his                                                                                               
responsibilities and duties, handling of company meetings,                                                                                            
knowledge of what economic and commercial crimes are, and so on.                                                                                      
                                                                                                                                                      
As Malaysia moves into the globalised world, the challenges of                                                                                        
the board and managers are many. Many new concepts, strategic                                                                                         
insights, tools of management and strategic issues must be                                                                                            
adequately understood. With a larger store of knowledge                                                                                               
available in all aspects of businesses, enhancing value in an                                                                                         
organisation and building trust and confidence seem to be                                                                                             
important ingredients.  Directors who are in the fore-front                                                                                           
should keep abreast of these developments and their supporting                                                                                        
structure. Training and development will become more and more                                                                                         
important if firms want to succeed in creating wealth and                                                                                             
prosperity in the long run whilst addressing issues of                                                                                                
compliance and stakeholders' needs.                                                                                                                   
                                                                                                                                                      
The Malaysian Institute of Management is a training provider                                                                                          
appointed by the ROC to conduct the CDTP. For more details on                                                                                         
upcoming CDTP in MIM, please contact 03-21645255 (KL),                                                                                                
04-2290307 (Penang), 07-3349934 (Johor Bahru) or e- mail                                                                                              
enquiries@mim.edu.  Views expressed in the article are solely                                                                                         
the writer's.