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Hello, welcome to Nightline. The headline is Malaysia Airline board of director restructuring. Good morning. Board of director is appointed on the behalf of the shareholder to run day to day affair of the business. Members of the board of director consists of chairman, directors, vice chairman, advisor, auditor and management. Now, I will pass the news to Jaja for further report. Hello Jaja. Thank you Syasya. Now, we are here to meet and interview the board of director that we have today. Hi madam. As a director in the company, what do you think about the role and responsibility of the board of director in an organization? Thank you Jaja. For your information, there is a lot of responsibilities of the board of director. But today I'm going to highlight only four of their roles. First, establish the vision, mission and values of company. Okay, the board of director need to determine the vision, mission and values, and review the company goals and policy. Secondly, the board of director need to set the strategy and structure of the company. Okay, as one of the board of director, we need to determine the company strategy and options and the business strategy. Also we need to ensure whether the goals and strategy can be implemented in the company. Thirdly, delegate to management. For your information, board of director can delegate the the authority to management and also monitor and evaluate the implementation of the policy, business plan and strategy. Okay Jaja, last but not least, the exercise of the accountability for the shareholder and relevant stakeholder. As one of the board of director, we need to understand know, and monitor the interest and relation between the shareholder and relevant stakeholder. Okay, that's all. Okay, thank you ma'am for the information. Okay lets discover more about board of director. With me, Puan Norasyikin. Hi ma'am. Have a seat. Thank you for inviting me. Okay, what is the issues that board of director usually faced? Okay, for me the first issue that I can figured out is the issue discuss in a meeting is still unresolved. This issue maybe arise because of the member of director do not really understand the issue that they discuss or maybe they have different understanding on the keyword or the language that they use for the discussion. So, another reason why the members of director do not understand about the issue is because of they don't want to compromise because of their stubbornness. Okay, another issue that I can figure out is the tension exist between the members and the board of director or between the chairman and the board of director. Usually tension exist because the member feels that the director does not allow him or her to fully exercise his authority. Okay, to avoid this issue we as a board of director would encourage the director to keep inform the board of directors about the issues, the problem as well as the failure of the issues that they discuss. It is a good point to ask the agent to make an agent report at every meeting. Okay, another issue that usually occurs during the meeting of board of director is that a talkative member usually will take over the meeting while the quiet member does not participate. Okay, it is important for the chairs to listen carefully when the members repeat themselves regularly or wandering a long way from the topic. the chairman could interrupt point out to the members that he or she has expressed themselves well. Then, he could ask someone else to speak to the topic. Usually, the quiet members are more likely to express their opinion if their are not the first to speak. So, the chairman can encourage them by asking the leading questions. Okay ma'am, do you think emotional meeting can affect board of director? For me, I think emotional meeting which are draining, occur and negative feelings carry over will affect the members of director. Sometime, emotional meeting occur because the chairman doesn't know when to stop and how to handle the meeting. It is the chairman responsibility to keep control the meeting. Sometimes it can be helps by ask each member to write out their point, then use this point to express their feeling and to discuss the issue. So, the chairman have to encourage each member to express their feeling openly rather than to complain and spread the negative feeling outside the meeting. Okay, thank you ma'am for coming. Next headline is on Malaysian SMEs sector. Small Medium Enterprise is a big threat to Malaysian economy. It is also a major contribution to Malaysia's GDP. Furthermore, SMEs also contribute the major employment sector of the country. However, Malaysian SMEs sector are also related to corporate governance failure. Okay, now we have Jaja at the scene to explain to us more about corporate governance failure. Hello Jaja. Corporate governance is the system of rules, practice and process by a company is directed and controlled. Okay. Hello ma'am. As a entrepreneur of SME, what do you think about the issues that raise in the SME corporation? O, the issues in SME. Actually, what I think, Malaysian SME is usually represent as the model of family concentrated. (**Interruption**) SME is a model of family concentrated ownership. They may have their relatives, and also their close friends as the board of directors. And also the top management maybe they kept within their family members. This kind of firm usually doesn't have a good corporate governance practice. And this is due to lack of competencies of business owner and also lack of skill and expertise within the member of the management. Okay, this will lead to failure which I've said before in the issues of SME. The failure happen based on certain factors. One of the factor is they maybe offer some illegal investment scheme. which will affect the investors and also make the investors suffered a large amount of money in loss. Then, another factor maybe the SME companies may have submit a misleading statement. What I meant about is SME that registered under CCM need to submit their annual report, annual return, tabbling accounts and also need to conduct the AGM. Okay, when they have a poor corporate governance practice, they maybe fake their financial and annual report. Other factor that I can figure out is like fraudulent case. It is maybe the directors or the managers have unauthorised used of their company's property and also they may misuse their power in order to gain benefit for themselves. As I can see in the Asian Financial Crisis in 1997 if I'm not mistaken, which has revealed that in Malaysia there is a very poor corporate governance practice. So the SMEs mostly suffered from leveraging, and also they have a very poor protection for the investors. And yes, for your information actually I also have read an article that is written by Ahmad & Seet which has been published in 2009. It's stated that there is about a huge percentage which about 60% of SMEs that have a failure in their corporate governance practice. And also 50% of the SMEs have been collapsed during their first five years of operations. Okay ma'am. Do you know any action that have been taken by the governement to reduce the failure rate in corporate governance? I have been aware about some actions that have been taken. One of it, in 2005, which the government has established the SME Bank to help the SMEs. And also they encourage the SMEs for their productivity and the quality through modernization and automation of machinery. And also the government has enhance the SME to start with the R&D project. Also the government encourage the SME entreprenuers to create more conducive business environment. So, as the conclusion on what I have seen about the issue of SME is that "good corporate governance practice will lead to a good corporate performance". This is because the Malaysian Code of Governance, has been implemented to the SMEs which have registered under the Bursa Malaysia so that they can monitor this firm's performance to meet the corporate government standard. Okay, thank you ma'am for the information. -You're welcome. -Okay back to studio. There's a lot of information that we have received about the board of directors and corporate governance issues. I'm Syasya Nabilah, thank you for watching Nightline. Good night.

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Posted by: fiqaa on Nov 25, 2017

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