So, you think you can become a Managing Director? ( A Perspective by Nik Zafri)

This flow is as a result from interviews conducted with several Managing Directors across various industries, ranging from Small and Medium Enterprises, MNC to Public Listed Companies. Please also note that work delegation is also involved in this flow.

It's important to note that in the Malaysian context, the hierarchy and structure may vary, with the C-Suite potentially including the Board of Directors or Shareholders themselves or appointed by the Board, provided their roles, responsibilities and authorities are clearly delineated in resolutions to uphold effective governance practices.

I would like to extend my gratitude to the Managing Directors who generously participated in this survey. May their experiences serve as a valuable reference for other Managing Directors as well.

TATAKELOLA YANG SALAH - RENUNGAN HARI INI

Bila berbicara mengenai tatakelola, ketelusan adalah salah satu asas yang penting. Tidak guna berbicara mengenai tatakelola dengan niat yang tidak jujur.

Ada pihak-pihak tertentu apabila diminta laporan, mereka menyediakan 2 laporan yang berbeza. Satu laporan sebenar yang disimpan untuk dilihat oleh orang-orang tertentu, satu lagi laporan "berhias" untuk diserahkan kepada pihak atasan.

Laporan "cantik" hanyalah untuk "feel good factor" dan tidak menggambarkan suasana yang sebenar.

Ini menyebabkan ketidaktepatan maklumat mungkin juga membuka peluang kepada unsur korupsi berlaku.

Kisah sebenar hanyalah diketahui apabila melihat hasil/keputusan akhir atau berlaku sesuatu peristiwa yang kurang menyenangkan atau apabila pihak atasan turun sendiri untuk memeriksa ketepatan laporan berkenaan atau apabila pihak ketiga yang dilantik pihak atasan untuk memeriksa rekod/dokumentasi.

Perkara ini; pada saya; tidak patut berlaku dan sepatutnya dibendung oleh pihak pengurusan kerana ketidaktepatan maklumat laporan adalah juga unsur korupsi.

Jika mana-mana ahli pengurusan merasakan adanya unsur negatif seperti ini, tidak perlu takut untuk melaporkan hal yang sebenar kepada pihak atasan dengan bukti-bukti yang jelas supaya tindakan susulan boleh dilaksanakan.

Hal ini menjadi satu kesalahan dari segi agama dan perundangan terhadap mereka yang tidak melaporkannya atau memberikan laporan yang tidak benar dan juga ke atas mereka yang tahu akan kebenaran tetapi memilih untuk menyembunyikannya kerana ketakutan hilangnya sesuatu kepentingan.

TYPICAL CORRUPTION PRACTICES IN PROCUREMENT (ANTI-BRIBERY MANAGEMENT SYSTEM SERIES)

Photo source : Dreamtime

Based on my experience in assessment, one of the most critical department that I would focus on would be Procurement (or Purchasing) This is because the department are involved in various transactions with Supplier/Sub-Contractor/Materials where if not properly controlled or without proper procedure, potential and risk of corruption practices may occur.

Disclaimer - Without naming such organization (s) due to Oath of Confidentiality and the author may change some details/sequence of events - corruption in the Procurement Department can occur through various means and practices. Here are some common ways in which corruption can happen in procurement:

(1) Bribery

Suppliers/Subcontractors may offer bribes to procurement officials in exchange for favorable treatment, such as winning a contract or receiving preferential pricing. This can involve cash payments, gifts, vacations, or other forms of illicit benefits.

(2) Collusion

Procurement officials may collude with specific suppliers/subcontractors to manipulate the bidding process. They might provide confidential information about competitors' bids, set biased selection criteria, or create artificial barriers to exclude certain suppliers, all with the aim of awarding contracts to predetermined vendors.

(3) Kickbacks

Procurement officials may receive kickbacks from suppliers/subcontractors after awarding them contracts. In this scenario, the suppliers/subcontractors inflate their prices and then kick back a portion of the excess payment to the corrupt officials.

(4) Fraudulent Invoicing

Suppliers/Subcontractors can submit fraudulent invoices to procurement departments for goods or services that were never delivered or were delivered at inflated prices (even I've seen cases of wrong (intentional) delivery to a further location "blaming" the location given by Procurement (intentional) - in order for the subcontractor/supplier to claim additional cost) Corrupt officials may approve these invoices in exchange for kickbacks or other personal benefits.

(5) Conflict of Interest

Procurement officials with undisclosed personal interests or relationships may manipulate the bidding process to favour companies they are associated with, such as family members or close friends (cronyism) . This undermines fair competition and can result in biased contract awards. (anti-trust)

(depending of the case where "impartiality" can be proven)

(6) Nontransparent Procurement Processes

Lack of transparency in procurement procedures can create opportunities for corruption. For instance, if the Procurement Department operates without clear guidelines or proper oversight, officials can exploit loopholes to engage in corrupt practices.

(7) Weak internal controls

Inadequate internal controls and poor governance structures within the procurement department can facilitate corruption. Lack of segregation of duties, limited oversight, and ineffective auditing mechanisms create an environment conducive to fraudulent activities.

(8) Influence peddling

Powerful individuals or organizations may exert undue influence on the procurement process to benefit certain suppliers/subcontractors. This could involve political pressure, nepotism, or other forms of manipulation, thereby compromising the integrity of procurement decisions.

Preventing corruption in the procurement department requires robust anti-corruption measures, such as :

a) implementing transparent processes,

b) promoting accountability and ethics,

c) conducting regular audits, and

d) providing training on anti-corruption practices.

It's crucial to establish a strong ethical culture and foster an environment where reporting corruption is encouraged and protected.

PART 5 - ANTI BRIBERY MANAGEMENT SYSTEM (ISO 37001:2016) - by Nik Zafri

 (Anti Bribery Management System = ISO 37001:2016)

3.0 PLANNING

This element links back to identified (bribery) risks and types of mitigation (risks and opportunities of improvement) as mentioned in the previous article. In planning, there should be a sense of assurance that the objectives will work. 

Risks require a plan which entails prevention and "what if" situations e.g. if they fail. (Back up plan is required)

No planning requires no improvement. It's not perfect. You'll learn through experience.

Thus, especially your manual and your procedures addressing risks of briberies, level of risks and possible mitigations should be part of the core process of the organization.

Mitigation is something to be based on experience. You may need brainstorming session(s) to see and test the viability of mitigation especially to possibility of "new bribery risks" that is unexpected.

Evaluate the planning process and execute the plan.

Objectives

The (measureable) objectives as mentioned earlier should be at the departmental and functional level. In making the objectives, it should adopt a cascading concept to the policy. (sort of the Drucker's MBO concept)

(A word of caution : Never treat the policy, objectives or other documented information as merely to comply with the standard and/or law requirements, the organization must feel that "This is the company policy, this is the company's objectives etc" or better "ABMS is part of the company's culture" - to have the sense of ownership towards the system)

Objectives must be practical not something that is "plucked from the sky". Sometimes achievement is not necessarily a measure of success as past achievements are also subject to further review. (as the law or standard changes or poor achievement is witnessed in the past)

Like policy, the objectives must be communicated (usually every department, unit and functions should have it documented or pasted or spread through the respective network throughout the department/unit/function)

Planning should involve the next course of action (including legal where necessary), resources, responsibilities and authorities, a time frame for achievement/reviewed or improvement.

ISU-ISU SEMASA PASCA PEMBENTUKAN KABINET 2022 - BAHAGIAN 1 - OLEH NIK ZAFRI

ISU TELUR

Sebagai pelan jangka pendek, Kementerian Pertanian dan Keterjaminan Makanan mengenal pasti beberapa sumber dari luar untuk menampung keperluan bekalan dalam negara dengan kadar segera bagi memastikan keterjaminan telur ayam di pasaran. 

Masalah sekarang seperti yang disentuh oleh YAB PM baru-baru ini ialah menangani masalah kartel terlebih dahulu - yang telah lama menguasai pasaran dan "supply chain" - termasuk pasaraya, pembekal malah penternakan ayam itu sendiri. 

Kartel ini sangat berpengaruh - mampu "mengugut" kerajaan - bagaikan gengster, mampu menjadikan kes sorok besar-besaran malah mampu memindahkan bekalan telur (Gred C) dari stor pasaraya supaya rak-rak telur hanya meletakkan telur yang gred tinggi termasuk Omega. Ini semua berlaku kerana kurangnya ketegasan penguatkuasaan KPDNHEP.

Jika sumber luar seperti yang disebut itu berjaya dimasukkan ke pasaraya, tidak mustahil akan berlaku banyak sabotaj, contohnya kes kekurangan bekalan gula dulu, saya lihat banyak gula telah ditebuk supaya bocor di pasaraya-pasaraya yang saya lawati. 

Tidak mustahil kalau ada pihak yang memecahkan telur-telur ini atau menukarnya dengan telur yang sudah rosak kerana kawalan keselamatan di pasaraya kadang-kadang amat longgar.

Kita kena berfikir di luar kotak, jika kartel berjaya dimusnahkan monopoli mereka, saya sebagai rakyat akan rasa lebih aman kerana saya tahu kos/harga telur akan dapat dikurangkan. 

Seperkara lagi kes bekalan ayam, ini perlu diberikan perhatian serius. Kos makanan/dedak sangatlah mahal kerana kita mengimpot sesetengah bahan dari negara luar, sekurang-kurangnya ladang-ladang jagung perlu diperbanyakkan kerana jagung juga boleh menjadi sebahagian dari makanan ayam.

https://nikzafri.blogspot.com/2022/07/krisis-ayam-bila-akan-berakhir-nota.html

ISU MONOPOLI

Saya bersetuju dengan pandangan beberapa rakan di Facebook bahawa penguasaan beras oleh Tan Sri Syed Mokhtar Al-Bukhary bukan satu isu kerana harga beras masih terkawal (RM13.00 atau RM12.95) untuk beras 5kg gred rendah dan ramai lagi yang mampu membeli beras.

(walaupun atas sebab-sebab yang agak tidak munasabah, kita masih mengimpot beras dari negara jiran walaupun pesawah padi di beberapa negeri telah mampu menanam padi grednya sama. Ada yang menyebut harga beras impot negara jiran lebih murah dan kualiti tinggi tetapi masalahnya duit kita mengalir keluar. Saya lebih rela membeli dengan syarikat tempatan kerana saya tahu duit yang saya belanjakan akan menjadi pendapatan negara dan bukan milik negara jiran dan harga beras juga dapat dikurangkan) Sekiranya "monopoli" beras dipecahkan, saya bimbang kalau harga beras akan melambung tinggi sehingga harga siling contohnya RM14.50 - RM15.00 utk 5kg beras gred rendah. Sememangnya monopoli perlu ditangani, tetapi ada lagi isu-isu yang lebih penting iaitu a) Pada zaman salah seorang PM dulu, ada syarikat (kroni) yang mendapat "Central Contract" (kontrak berpusat) untuk pelbagai perkakasan ODM/OEM jentera/komputer - yang TIDAK sepatutnya berlaku. Walaupun syarikat berkenaan cuba mengadakan VDP, namun, ianya gagal kerana sistem itu menjadi terlalu mahal untuk dilaksanakan. Walau apapun konsep "Central Contract" ini MESTILAH DIHAPUSKAN. (Isu yang sama pernah saya sebut pada pasca PRU-14) (tidak mahulah saya menyebut beberapa syarikat lagi dalam industri seperti makanan yang ada hubungan kekeluargaan dengan PM berkenaan b) Pada zaman seorang lagi PM, ada syarikat yang menguasai bahan-bahan penting dalam binaan (contohnya konkrit, besi dsb) dan semua kontraktor (kroni) yang dipilih WAJIB membeli bahan-bahan berkenaan dengan mereka untuk satu projek yang bernilai puluhan billion ringgit. Ini juga satu bentuk MONOPOLI yang wajib Kerajaan hapuskan. (Isu ini juga pernah saya sebut pada pasca PRU-14) (tidak mahulah saya menyebut siapa pemonopoli dan juga kontraktor-kontraktor berkenaan kerana kami dalam sektor pembinaan mengenali siapa kontraktor berwibawa/berpengalaman atau kontraktor "bidang terjun" yang "membeli syarikat yang mempunyai lesen G7 serta bertaraf bumiputera dengan pengetahuan sesetengah pegawai 2 agensi tanpa melalui proses yang betul") Remember, Good Governance is extremely important and Good Governance involve TRANSPARENCY!

ISU SEMASA PASCA PEMBENTUKAN KABINET 2022

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2 HARI KEMUDIAN - 08/12/2022

SYABAS #UtusanMalaysia #UtusanOnline

TACO BUENO TAKES VIEWS FROM THE FIELD SERIOUSLY - Nik Zafri

#MikeRoper #TacoBueno #EpicBoss #NikZafri #MuscleMaker

"Bottom-Up" approach in management still works. Taco Bueno prioritizes its' people working on the field to provide inputs to the top management.

A true example of transparency and governance in action.